Grocery costs: Why are stores owned by the same companies charging different prices?

Same items, different prices Even when stores are owned by the same company, prices for the same items vary widely. Why is this? Does it pay to shop around?

The names on the outside are different, but most grocery stores are owned by the same companies  yet CTV News shopped around and found they charge significantly different prices for the same items.

First, we looked at two stores in North Vancouver – owned by industry giant Loblaw – located mere kilometres apart.

At the Superstore on Seymour Boulevard, a large tin of coffee is sold at for $14.99. In contrast, the same thing costs $17.99 at the City Market on Lonsdale Avenue.

We compared several products between these two locations, ensuring they were the same brand and size, and not on sale.

Loblaw’s in-house no-name brand stuffed chicken sells for $0.80 more at City Market than it does at Superstore. Similarly, a box of Raisin Bran is also more expensive.

“Companies are free to price in a way that they think the market will bear,” said Bradley Callaghan of the Competition Bureau, explaining the phenomenon.

“Prices are often important signals of how competition is working.”

In a statement, Loblaw public relations told CTV News its stores are designed to cater to different customer needs. For example, some may offer fewer, more basic goods at lower prices. Others, provide something different, which a spokesperson says may explain why the prices are not the same even if the items are.

“City Market, on the other hand, often has a bigger selection, more specialized products and a number of in-store amenities, which may be reflected in the prices there,” the statement read.

Next we turned to two stores owned by another major chain. Both Safeway and Thifty Foods in North Vancouver are owned by Sobeys Inc.

A large box of in-house brand orange pekoe tea is cheaper at Safeway than at Thrifty Foods $9.99 and $10.49, respectively.

Likewise a large tin of instant coffee sells for $17.99 at Safeway, but $19.79 at Thrifty Foods.

This week, the Competition Bureau released a report into grocery store prices in Canada, and found a lack of competition was leading to higher costs.

Most Canadians buy groceries in stores owned by a handful of grocery giants, with Canada's three largest grocers -- Loblaws, Sobeys, and Metro -- collectively reporting more than $100 billion in sales and $3.6 billion in profits last year, the study found.

Food prices have recorded a massive spike in Canada since November 2021 -- the last month for which grocery inflation was under five per cent.

Since then, grocery prices have consistently risen by close to double digits, peaking at an 11.4 per cent year-over-year price hike last September and again in November before easing somewhat in recent months. Statistics Canada said Tuesday grocery prices rose nine per cent year over year in May.

With files from The Canadian Press.