On September 28, the Canada Competition Bureau will launch a formal call for information regarding pricing policies within the retail grocery sector. This initiative follows a comprehensive 2023 market study aimed at assessing competition across the entire food supply chain.
Expanding on the 2023 retail grocery market study
The Competition Bureau's upcoming move is a direct response to findings from its 2023 retail grocery market study. That previous examination suggested that strengthening competition within the sector could lead to significant benefits for Canadian consumers, specifically through increased innovation and lower shelf prices.
As the bureau reported, this new inquiry will not be limited to the retail shelf. Instead, the agency intends to look at the broader food supply chain, including the stages of production, processing, transportation, and distribution. By examining the entire lifecycle of food products, the Bureau aims to identify where competition may be failing to protect the interests of Canadian businesses and households.
Targeting shrinkflation and skimpflation practices
A central component of the Bureau's investigation involves the scrutiny of "shrinkflation" and "skimpflation"—tactics that have become increasingly visible to Canadian shoppers. according to the source, shrinkflation refers to lowering a product's quality while maintaining or raising its price, whereas skimpflation occurs when a product's quality is reduced while the price remains unchanged.
The Bureau is specifically looking at how these practices affect the perceived value of goods and whether they undermine fair competition. By gathering data on these specific pricing behaviors, the agency hopes to understand if consumers are being misled by subtle changes in product composition or volume.
The influence of algorithmic pricing and loyalty programs
Beyond physical product changes, the Canada Competition Bureau is turning its attention to the digital and psychological drivers of retail costs . The agency has identified algorithmic pricing—the use of specialized software to adjust prices in real-time based on market data—as a key area of interest. This practice raises significant questions regarding market transparency and whether automated systems could inadvertently stifle competition.
Additionally, the Bureau is reviewing the role of loyalty programs in the grocery sector. According to the bureau's upcoming call for information, these programs can heavily influence consumer shopping behavior and impact the "effective price" a customer actually pays. the investigation will seek to determine if these programs create barriers or if they provide genuine value in a competitive landscape.
The missing deadline and scope of stakeholder feedback
While the Bureau has set a clear start date for its call for information on September 28, several details remain unconfirmed. Most notably, the agency has not yet announced a deadline for stakeholders to submit their input. This leaves retailers, suppliers, and consumer advocacy groups in a state of anticipation regarding the window for formal participation.
Furthermore,while the Bureau has invited input from a wide range of stakeholders, it remains unclear how much weight will be given to specific consumer complaints versus industry-led data. The agency's ultimate goal is to determine if current pricing policies are working effectively, but the specific metrics for "effective competition" in this new phase of the study have yet to be fully defined.
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