Canada’s grocers are in a race to open the most discount locations.
Driving the news: Last week, Empire — owner of Sobeys, Farm Boy, and other grocery chains — entered a deal to buy Mayrand, a discount grocery chain based in Quebec. The move is the latest play from a Canadian grocer looking to expand its discount footprint.
Zoom out: Last fiscal year, Loblaw, Metro, and Empire — Canada’s Big Three grocers — opened a combined 61 new discount grocery stores, according to data compiled by The Logic. They show no signs of slowing and are on track to open at least 49 more this year.
According to a report from research firm Kantar Retail, Canada now has ~1,200 discount grocery stores, excluding Dollaramas, compared to ~2,500 conventional grocery stores and supermarkets. Just seven years ago, it was a 1,000 to 2,700 split.
Why it matters: Years of punishing food inflation have sparked a fundamental reorientation of the grocery market, where shoppers are discarding previous preferences and focusing almost entirely on price.
Discount grocery stores are now popping up in more affluent neighbourhoods. Take Montreal’s posh Outremont borough getting a Maxi, or the firmly upper-middle-class Toronto enclave of Roncesvalles exchanging its Loblaws for a No Frills.
Our take: One positive takeaway is that society might finally be shedding its needless stigma around discount shopping. On the other hand, it’s not a great sign that a growing number of people can’t afford to shop at regular grocery stores. It could also mean a rise in dumpier stores, even ones that sell goods past their best-before date.—QH
