One in three Canadians believe grocery store price gouging is the main reason for food price increases: survey

One in three Canadians believe grocery stores engaging in price gouging is the main reason food prices have been rising in Canada recently, according to a new survey of nearly 10,000 Canadians.

The survey, released earlier this week by Dalhousie University’s Agri-Food Analytics Lab, found Canadian trust in grocers is shaky, and a recent parliamentary committee hearing on agriculture, in which leading grocers defended themselves against allegations of price gouging, didn’t convince most Canadians.

Rising food prices have been a huge concern in recent years. In 2022, food prices increased by around 10 per cent, much higher than had been anticipated.

Researchers performed a cross-national survey of 9,884 people at the end of March, asking Canadians how they felt about food prices and why they think costs are rising.

Most Canadians do not believe price gouging in grocery stores is the main cause of rising food prices, but this varies widely across provinces, the survey found.

Respondents from Nova Scotia overwhelmingly had the least trust in grocers, with around 52 per cent stating they believed price gouging was the main driver of rising food costs.

Two other Atlantic provinces made up the next highest percentage, with 38 per cent of Newfoundland and Labrador respondents and 36 per cent of Prince Edward Island respondents agreeing grocery stores drive up the price of food.

Between 30 to 33 per cent of respondents in British Columbia, Alberta, Ontario, New Brunswick and Manitoba answered price gouging was the main issue behind price hikes, according to the survey.

Saskatchewan and Quebec had the lowest percentage of respondents who believed price gouging was the main problem, coming in at 27 per cent and around 22 per cent respectively.

These two provinces were the only ones where “price gouging” wasn’t the top option selected by those surveyed. Respondents from Quebec and Saskatchewan selected “inflation/monetary/fiscal policies” as their top choice for what they believed was the main reason for rising prices, with 36 per cent of Quebec respondents and 32 per cent of Saskatchewan respondents selecting monetary policies as the problem.

Overall, around 29.9 per cent of Canadians said they believe inflation or monetary policies were the main contributing factor behind food prices rising, which is almost on par with the 30.3 per cent who stated they believe grocery store price gouging was the main cause.

The survey also asked Canadians about whether the recent parliamentary committee, in which grocers defended themselves against allegations of price gouging, had impacted their trust levels regarding grocery stores.

Only 35 per cent of those surveyed were aware of the committee, and of these Canadians, the vast majority said they were unconvinced by testimonies from the CEOs and leaders of companies behind big grocery stores such as Loblaws, Metro and Sobeys.

Around 33 per cent of respondents felt the grocers’ testimonies were convincing or very convincing, with around 25 per cent of respondents characterizing this testimony as “transparent and forthcoming.”

"Grocers may stock their shelves with the freshest produce and finest goods, but without the trust of their consumers, their offerings [will not sway consumers],” Janet Music, Research Associate at the Agri-Food Analytics Lab at Dalhousie University, said in the report. “Their business is largely misunderstood by the Canadian public. For grocers, transparency, ethics, and sustainability will be even more critical moving forward.”

In terms of how grocery stores could earn the trust of consumers, 46 per cent of survey respondents said they would like to see more price freezes.

The federal government has been discussing a potential Grocery Code of Conduct, which would try and balance supply between larger and smaller grocery stores to attract more suppliers to Canada. The government is set to provide an update on this idea sometime in April.

Around 68 per cent of the roughly 3,300 survey respondents who said they were aware of this plan supported it. Respondents in Nova Scotia showed the highest level of support, at 76.5 per cent, while people in Prince Edward Island showed the lowest support for the plan at 53.2 per cent.

Outside of the proposed Grocery Code of Conduct, 44 per cent of respondents said the government could intervene by creating regulations for the price of some foods at the grocery store. Only 19 per cent supported a windfall tax, which would see unexpected profits garnered by a grocery company subject to an additional tax.

Food inflation is a phenomenon affecting numerous regions across the globe, and Canada has the third lowest food inflation rate within G7 countries and the European Union, ranking after Japan and the U.S.