Nuanced. - 281. Sylvain Charlebois: Are Canadians Being Overcharged for Groceries?

Episode Date: October 5, 2026

Sylvain Charlebois, also known as the Food Professor, explores Canada’s grocery prices, food inflation, the Loblaw boycott, bread price-fixing, grocery competition and interprovincial trade barriers with host Chief Aaron Pete. Send us Fan MailSupport the shownuancedmedia.ca

Are Canadians being overcharged for groceries? It depends of your perspective, I guess, but if you actually look at the data, it's hard to see any evidence of that. What did the bread price fixing scandal teach you? It was a bit of a trust breaker for me, to be honest. You can actually run food cartels or you can conduct some price fixing schemes in Canada, but you can't do it without law. What did you think of the reaction from citizens boycotting law? Frankly, if you do boycott one chain in Canada, you may end up making things worse,

because let's say that the boycott would have worked, it would have actually increased prices elsewhere. Can we realistically bring those prices down, or are families being asked to accept this is the new normal? Thank you so much for being willing to join us. Would you mind briefly introducing your business? for people who might not be acquainted with your work. Sure. So my name is Sylvainzbois. I'm an academic. I'm director of the Agri-Food

Analytics Lab at Dalhousie University in Halifax. And our work is very much about the food supply chain from Farmgate to Plate. And I've been running the lab for about a decade now. and I used to be at Guelph, and before that I was at the University of Saskatchewa. Let's get right into it. Are Canadians being overcharged for groceries? It depends of your perspective, I guess, but if you actually look at the data,

it's hard to see any evidence of that. I mean, basically, I've always asked my students and people who do challenge the quadro of groceries that we have, like how do you measure greed really? And the answer to that question from my perspective is to look at financial statements. And there are two metrics that I look at very closely to measure whether or not in retail if there's abuse.

And that would be same store food sales compared to food inflation. So obviously if growth of food sales is higher than food inflation, that's a sign. The bigger sign to me is gross margins. Gross margins is basically revenues minus the cost of goods. If that goes up, that's a sign as well. But when you look at food retail, there's, I mean, for the three, the big three,

so-sobe's, La Blah, and Metro, gross margins have actually just haven't moved at all. And maybe there was probably one quarter by Loblaw three years ago that was a little above their threshold, their average. But that's basically it. So in other words, grocers tend to make their money selling clothing, cosmetics, precision drugs, especially prescription drugs. In fact, for the last quarter, the CEO of Loblaw is on record saying that the GLP, one phenomena is really bringing a lot more business to shoppers, which is really their bank. So up the food chain, it's a little more difficult to assess because you have many private companies, some public companies, but many private companies and the public companies are,

most of them are not based in Canada. So it's a little harder to assess. margins, when you look at, you know, Cargill, Tyson, Procter Gamble, Pepsi, margins have actually increased on average, but not that much. And so that's why it's always a little bit more difficult as soon as you leave distribution, going to processing, and even in production, it's harder to assess with another. There is greed going on. grocery prices are rising more slowly, but they're still substantially higher than five years ago.

Can we realistically bring those prices down or are families being asked to accept this is the new normal? Yeah, so actually in the last five years, food prices in Canada have gone up 28.9%. That's basically the G7 average, really. Some countries have actually seen worse, like the UK, for example. even Germany has seen worse, but we're basically average. But the unique thing about Canada is this. In the last five years, 17 times from one month another, food inflation, the food price index dropped 17 times in the last five years.

Still, still we're fourth at 28.9%, which tells you that food inflation is a problem, of course, but the worst problem that we have in Canada versus other countries is price volatility. We're very vulnerable to currency fluctuations, geopolitics, increase in input costs,

like what happened with Ukraine, for example. So you can see that our chain is way more vulnerable than other chains around the world. That's the biggest problem. And to answer your question about whether or not food prices will drop.

Food inflation doesn't necessarily work that way. Now, one year, in the last 20 years, there was one year where prices did drop in 12 months, but it was barely 1%, basically. It does happen from time to time, but it's very rare. I mean, the economics of food supply chains basically will make costs go up.

And when costs go up, It's very hard to bring prices down. What information would you need before you could confidently say consumers are or aren't being overcharged? Well, you look at two things. You look at the cost of food, food prices versus affordability on the other side, meaning salaries and things like that. So salaries in Canada have actually gone up, although this year in 2026, it has slowed down. The difference between Canada and the U.S. is that you have more unionized positions,

which means that collective agreements are negotiated every three years. So every three years, you have this cycle of renegotiation that does have an impact on wage increases compared to the U.S. In the U.S., you tend to see wage increases happen way faster because they're not at the mercy of collective bargaining, essentially. And so we have caught up in 2025, really it was a, I think wages went up 4.3% in total, which is really good. But now things have slowed down. At the end of the day, you have to look at disposable income. And this is why Canadians are feeling the pain. About 10 years ago, the average household was spending about 18% of its disposable income on food, okay, 18%.

Now we're up to 22%. So we went from 10th place in the world to six, sorry, we went from sixth place in the world as having the lowest percentage dedicated to food to 10th in the world when you look at the disposable income dedicated to food. So that's why, I mean, that shift is pretty dramatic in just a few years. And that's why a lot more people are feeling the pain. The other issue that we have in Canada, which is unique to Canada, is the fact that over the last 18 months,

food inflation was above headline inflation. This month, like the month of August, it was the first time we saw the reverse for the first time. But when food inflation is higher than general inflation, that's when people notice higher prices of the grocery store. in a 2018 column you called the bread price fixing scandal inexcusable what did the bread price fixing scandal teach you uh it it uh i had an episode of of uh self doubt to be honest because i actually had confidence in the in the industry uh it was a bit of a trust breaker for me to be honest and uh of course on my show i've had to

CEO of Lobla on and the CEO of other grocers on my show. But since then, what I do now, when I look at prices and what I look at patterns, I do look for potential situations where collusion will occur. I mean, the reality is that there's been a lot of consolidation of the food chain. and as soon as you start having vertical integrated organization, which was the case between Loblaw and Western bakeries, then you increase your chances of seeing some collusion. And that's exactly what happened with the bread scandal.

But the other thing that I've learned from the bread scandal is that because we were asked by the Accombship Bureau to investigate into this, and they asked us whether or not it was possible that there was a bread cartel in Canada. And so we were doubtful, but then we actually did look at the data. And our conclusion was fairly simple. We saw the pricing pattern from 2001 to 2015, and it was clear that there was collusion going on. But from 2015 to 2017, when Loblaw disclosed to the Bureau without others knowing,

that's when you saw, again, a different pattern when it comes to prices, which means basically only one thing, is that you can actually run food cartels or you can conduct some price-fixing schemes in Canada, but you can't do it without Loblaw. That's really the key here. And that's why, in my view, that's why Loblaw threw everyone on the bus,

because, I mean, we did the calculations. it was just impossible to do what they did without Lobla and Western Bakeries. What did you think of the reaction from citizens boycotting La Blah? I mean, people have every right to boycott La Blah, but I knew that the impact was going to be limited. And so I was always doubtful of the impact. And frankly, if you do boycott one chain in Canada, you may end up making things worse because let's say that the boycott would have worked,

it would have actually increased prices elsewhere. And it would have disrupted the supply chain. What was really interesting is that people actually believe that the boycott was working while you saw sales, la blah sales go up and the stock price go up at the same time. So it kind of actually attracted more attention to Loblaw. It actually bettered this situation. So if you want to boycott, that is your decision. But at the end of the day, my view is that you may want to encourage people to buy somewhere else or to, like the bike and aim movement, for example.

The bike and aim movement to me is a good example of how things should be done. You encourage people to buy certain things and not buy certain things. Where would you have directed people during that period as an alternative? In terms of, like, basically... If they wanted to boycott loblas and go somewhere else... What was the reason... I mean, what was the reason why people were boycotting loblah in the first place? Because they thought that Loblaw was greedy,

because La Blah was profiteering. But when you actually look at the data, the most profitable grocery chain was Metro. So why didn't they boycott Metro? Was this not connected at all to the bread fixing scandal? Metro is accused. Metro is part of the investigation. So it's so based.

They're being investigated as well. It's not over. But of course, Loblaw declared its position and admitted that they were guilty. But I don't think that the boycott had not anything to do with the cartel, with the price fixing. People believe the reason why people decide to boycott Lob, is that they thought that they were greedy and overpowering.

Now, they are overpowering. But when you look at profiteering specifically, I mean, the evidence was pretty clear. Metro is by far. are the most profitable chain out there? There's a lot of discussion about what should be done in response. I'm sure you'll recall Jagmeet Singh, the former leader of the NDP, talking about trying to address this in some ways.

I think Avi Lewis has come out with some proposals around government-funded grocery stores. I imagine that the Conservatives position is more competition is better. What kind of pathway forward do you see to give Canadians more confidence? when they're shopping, that they're getting a fair deal. Yeah, two thoughts on that. So one, I don't think we should dismiss the concept of publicly run grocery chains. I think there's actually some merit to that concept. But you have to do it for the right reasons.

The reason I'm hearing from the NDP right now from Mr. Lewis is that we need to show the oligarch how it's done. We need to basically compete against the private sector, which is really the wrong reason, because it's impossible. The suggestion is to open 50 stores. There's 18,000 grocery stores in Canada. It's not going to make much of a difference at all. And so that's one thing. But we do have some issues.

I do believe that there is merit to the concept because grocers are not interested in doing business in some parts of the country. Like urban centers right now, there's lots of theft, there's lots of homelessness, drugs, things like that. Urban deserts are real. And I think that perhaps there's something to be done there with public chains in downtown cores. The other part of the country where there's utterly underserved Canadians is the North. For many years, Ottawa has failed to service the north. You still find cucumbers at $20 a piece, cabbage at $25.

It's just unbelievable. So I would say, yeah, absolutely. We should consider establishing government-run chains for those particular markets. But the other thing that I think the NDP is missing is the co-op movement. In Canada, there's over 500 co-op-run grocery stores already. And so if you want to socialize food distribution, why not actually push and promote the

co-op movement? I never understood why they didn't do that. They just go right after owning and operating something they don't understand, but why not actually run cooperatives where you can actually get more people involved? You can actually make it, you can run a very inclusive model for citizens wanting to get involved in food distribution. I think the quote movement is a powerful tool for not only the NEP, but for people who actually do care about food systems. You're now one of Canada's most recognizable voices on food, but I'm wondering where did that passion begin?

Was there an experience to me you want to understand and challenge the way our food system works? Well, I mean, every day I try to make sense of things. every single day. And so, and I make discoveries. My team will discover things. We do research on a variety of different things. We have five or six projects on a go right now.

It's great. I'm privileged. I have a lot of information. So my job, I feel that my job is to inform the public properly with data. And I find the situation we're currently in to be incredibly frustrating because most people are actually making up their minds based on pure emotions, which is really bizarre. Because, I mean, my job as a scientist is to provide evidence and provide data.

And so I'm looking at what's going on in U.S. I'm going on, I'm looking at what's going on in Europe. I look at the data. I look at reports. And trying to make sense of what's happening right now is incredibly difficult. And frankly, frustrating because I'm out. out there trying to communicate to the public, you know, this is probably a mistake. This is something that we may want to consider.

But at the end, and I do have an audience. Don't get me wrong. I have an audience. It's just I feel that we're not necessarily listening or paying attention to what is actually going on here. And we're just focusing on the noise. You spent part of your youth working on dairy farms. What did you see there that kind of shaped your understanding?

of pricing and families paying for food. Farming is hard work. It's hard work. In fact, on Friday, I was actually in Saskatchewan running a combine. And these people work very hard. But in dairy, you're dealing with livestock. It's even harder because every day something goes on.

These are living beings. And so they get sick and things happen. They get pregnant. And they're worth a lot of money. money, let's face it. I mean, some cows can be worth well over $100,000. And so it's really stressful and it's the work ethic, really, that affected me. And that's why today, now I'm up at four doing the reading. I'm getting, I get ready for my day. And by the time I get to eight, nine o'clock, I'm, I'm fully plugged into what is actually going to happen during that day.

So it's, that's right. I mean, so that's why I have a lot of respect for farmers. Farmers are misunderstood. But that's why today I do a lot of keynotes. I'd say, you know, I do about one keynote a week and probably two-thirds of them are in front of farmers, really. And so I'm not a farmer, but I have a lot of respect for them and they know that. And they know that my, that I try to understand them and I,

and I try to defend them really because sometimes like most businesses in the agri-food sector are voiceless. They don't really get the proper attention. And, and, and, uh, I'm hopeful that I can actually bring more attention to them, uh, through my work. I'm curious in BC right now, we're in a provincial election. And I'm wondering, the, What should we hold, I'm in B.C. What should we hold provincial governments accountable for? And what should we hold the federal government accountable for when it comes to food insecurity and the cost of groceries? What's within their purview?

Yeah. So specifically to B.C. I think the ALR is a big problem. I actually just wrote a report to the government. Now you're in an election. So I don't know what's going to happen to that. But the ALR is a big problem. BC needs to invest in processing, way more.

And the ALR, I would say, condition policy is really not helping at all. So you have to process a certain amount of food that is grown nearby the facility. That's just so restrictive. And it really pushes away investment. It's pushing people to invest in Alberta and Washington State. So valuing processing is key in order to stabilize the entire system. And BC is certainly one province that would need to do that. In fact, it's in BC that where farmland has actually dropped in value last year.

It's the only province where farm value have dropped in the entire country. Why? Because it's not interesting to invest. And the other thing I would say, for provinces is that you need to look at property controls. Now, I've defended grocers on margins, but I can't defend them on property controls. These people are quite territorial.

So when they lobby municipal councils, making sure that there's no more than one store in a particular town. Or one store is on one side of the river while another store is on the other side of the river. They actually do not like a lot. competition, they suppress competition, and that practice, the practice of property control needs to stop. And if there is one level of government that can actually address that, that would be a province. So I certainly would encourage the BC government to work with its municipalities

and restrict property controls as much as possible to increase competition so consumers have access to more choices and lower prices. And the federal government, what would you want to see them take action on? Well, at the federal level, actually, there's some interesting things going on, to be honest. I'd say, like, the food strategy wasn't really a strategy. It was a list of good ideas. And so food hubs, certainly I would say that in B.C. You would need some food hubs to be built to basically increase exchange between Farmgate and retail and service.

So that's a step in the right direction. There's more money a couple of weeks ago. There was a billion dollars dedicated to manufacturing. Great idea. There was also an announcement in the aftermath of the investment summit in Toronto to provide some tax credits when it comes to R&D equipment purchasing, all these things. Certainly, so that's a productivity.

I think they called it the productivity fund of some sort. Those are track tax credits given to companies if they want to invest and increase productivity. That was another step in the right direction as far as I'm concerned. And so there seems to be some movement there that is going to help the entire agri-food sector. But the one thing that is still missing that Mr. Cardia has advocated for, but nothing has been done really as interprovincial trade barriers, they're still there. I mean, they were supposed to be gone more than a year ago.

They're still there. And we believe that the average household could save anywhere between $500 to $750 a year on food should we actually liberalize the entire country, especially right now in light of what's going on with the U.S. Are we too dependent on the United States for food? Well, I mean... Under Trump, I think it's plainly obvious that we are dependent, but I'm a, I'm a North America fortress kind of person. So I actually do believe that we actually have a lot to offer to America.

America has a lot to offer to Canada. We happen to have a regime in the White House that doesn't necessarily believe in globalization. They believe that globalization is a failed policy. I don't agree with that. But that's a, but that's a, really what's going on right now. I do believe that we will continue to depend on the U.S., but the U.S. will also continue to depend on us for certain products. I mean, it's hard to overlook a market of 350 million affluent consumers. So we're just right next door. That's our competitive advantage. And so we should use that connection in order to develop new markets as well, not to block that opportunity and diversify. We need to nurture that relationship while

diversifying as well. I think, and we haven't done that enough. Last question. What is stopping new grocery competitors? I mean, the business case is weak. I mean, you follow the money. Lobla is investing in California and Washington State. And nobody's coming here. Why? There's no wealth. There's, I mean, our population is not growing. The GDP per capita is not growing. We're the worst amongst OCD countries. And so those are metrics that grocers would look at, right? If there's no wealth, how can you grow the market? And so within, you have some grocers that do control the market very well. And so with little and all the, D, come in. And so, would little and all come in to a country like Canada where distribution costs are very high?

Ask Target. They came in in 2014. They left nine months later. After opening 125 stores, it was a huge failure. So no other grocer would want to become the next target. Well, I know that we only have a moment left. So I just want to appreciate you for the work that you do. It's really fascinating being able to speak with individuals like yourself who have taken a

topic that we all interact with on a daily basis and dive into it and offer insights that help on more informed electorate make more informed decisions. And I find it so interesting that in your day, you go into so many different spaces, whether you're grocery shopping or your house shopping, and there's just such a complex world behind that. There's so many levers and tools and decisions being made at all levels of the supply chain that give you a humility of how complex our world is and how complicated it is to go pick up your $4 avocado. So thank you for the work you do and thank you for attending today. Well, thank you for the work you do as well. Thank you for having me.