Champagne’s warning to Metro as prices set to increase: ‘you cannot ignore consumers’

A veiled threat from Canada’s industry minister to one of the country’s leading grocers: consumers may start going elsewhere.

Federal Industry Minister Francois-Philippe Champagne reacted Wednesday to the announcement from Metro Inc.’s CEO that higher prices will be seen in their stores beginning next week.

It coincides with the end of an industry-wide blackout period on supplier price increases.

Champagne says shoppers should speak with their wallets.

“One thing they should be listening is consumers, because one thing that we could do is that we can switch buying power to one or the other,” Champagne said.

“You cannot ignore consumers. I hope they get the message.”

Champagne is also insisting that he is reaching out to international grocers in the hopes they will open up shop in Canada and spur more competition, easing the burden on consumers.

“It’s true in Australia, in New Zealand, in the United Kingdom, if you bring more actors into the market, you stabilize prices, you provide more choices, and eventually that has a pressure on prices,” Champagne said. “That’s the best way. That’s why I’m so focused on competition because at the end of the day, that’s the way that you can have an impact on the market.”

Canada ‘not an interesting market’?

Sylvain Charlebois, the director of Agri-Food Analytics Lab at Dalhousie University, feels Canada is “not an interesting market to invest in” for a food distributor.

“For a variety of reasons,” he said. “One, it is a vast land with only 40 million people. And when you’re dealing with very low margins, it’s difficult to be successful. Two, interprovincial trade barriers are not helping. Each province is different.”

The focus on attracting international grocers comes after Champagne’s largely futile attempt to push Canadian grocers to help bring grocery prices under control. He met with Canadian grocers in the fall and demanded they create plans to stabilize grocery prices or face consequences including potential tax measures.

Metro’s CEO has said his company did not alter its prices in response to the meeting with Champagne.

Charlebois says prices need to be kept as stable as possible over time.

“The worst enemy for consumers is not necessarily just food inflation, it’s price volatility as well,” Charlebois said. “Because when you spook consumers, especially with fresh products, you will push consumers to make nutritional compromises and buy products that are not as good for them. And the quality also is not as high.”

Charlebois feels some solutions include stopping price fixing across the supply chain, and implementing a mandatory code of conduct to “suppress Loblaws’ power and Walmart’s power to level the playing field for all grocers and suppliers.”

His suggestions to consumers include taking advantage of discounts on expiring food and using apps that provide discounts on groceries.

–With files from Cormac Mac Sweeney, CityNews, and The Canadian Press