—Ottawa is asking hard questions about rising food prices. And even if they want to blame others, Canada’s “Big Grocers” better come up with some answers, says Éric Blais.—
The monikers “Big Oil,” “Big Tech,” and “Big Six” conjure images not just of behemoth industries, but also of shadowy overlords pulling strings behind a meticulously arranged curtain.
They’re the puppet masters of modern life, controlling everything from the fuel that powers our cars to the algorithms that dictate our digital existence.
The five guys who were summoned to Ottawa on Sept. 18 weren’t from GAFAM (Google, Apple, Facebook, Amazon, Microsoft). They were the “Big Grocers” from CLEWM (Costco, Loblaws, Empire, Walmart, Metro). They were there for a difficult conversation about rising food prices with François-Philippe Champagne, Minister of Innovation, Science and Industry.
The meeting was not virtual, intentionally so. It was designed to be a public spectacle, providing visual evidence that these companies are being held to account.
These “Five Horsemen of Your Shopping Cart” left with an assignment, and it’s not scribbling “I will not raise prices” ad nauseam on a blackboard. By Thanksgiving, they need to present a playbook to “stabilize” food prices. The penalty for a failing grade isn’t detention; it’s the far more daunting threat of taxation.
The Retail Council of Canada has argued that a full discussion on food pricing would need to include all parts of the supply chain, as 70% to 80% of final grocery prices are determined before products reach the store.
Indeed, everyone involved—from farmers to food processors, truckers, and wholesalers—has experienced rising costs. Moreover, customers have noticed that pack sizes and quantities have shrunk, while prices have increased.
The issue for CLEWM is that much of this cost escalation happens out of public view.
Consumers remember well when these large grocery chains announced they would freeze prices to help Canadian families, only to quietly raise them later. This makes it a pressing social issue, one that politicians can easily capitalize on to gain voter support.
Perhaps grocery retailers can learn something from other industries about how to handle consumer scrutiny.
For instance, gasoline retailers have managed consumer dissatisfaction by providing a detailed breakdown of how a dollar’s worth of gas is distributed across the supply chain and various taxes. This move has not only educated the consumer, but also shifted some of the blame away from the retailers themselves.
Another example comes from France, where Carrefour has recently called out brands for shrinking product sizes while maintaining prices. They’re naming and shaming brands like Lipton and Lindt for indulging in “shrinkflation.” It’s a bold move, and if orchestrated carefully, can turn public sentiment in its favour by sharing some of the blame and positioning itself as a consumer advocate.
As Minister Champagne awaits Big Grocers’ proposals and keeps tabs on Carrefour’s gambit, CLEWM should remember that while they may successfully diffuse blame across the supply chain, the buck—both metaphorical and literal—ultimately stops at the checkout. They are the ones implementing the price tags that consumers see.
And when financial results and executive paychecks are revealed, public sympathy might be as scarce as toilet paper was in early 2020.
Éric Blais is president of Headspace Marketing, a consultancy that helps marketers build brands in Quebec. He can be reached at feedback@headspacemarketing.