Instead of enticing a foreign grocer to come to Canada, some experts say Ottawa should look at ways to support smaller and regional grocery companies to boost competition.

Industry Minister Fran莽ois-Philippe Champagne said this week that he91裸聊视频檚 been reaching out to foreign grocery companies in the hopes they will come to Canada and help strengthen competition in the industry.

91裸聊视频淎m I going to succeed? I don91裸聊视频檛 know. But certainly it91裸聊视频檚 worth trying,91裸聊视频� Champagne told reporters Tuesday, adding that more players in the market will help put downward pressure on prices.

But while the arrival of a new discount retailer like Aldi or Lidl could create some price competition, it91裸聊视频檚 not that easy for a foreign chain to come to Canada and succeed, said Peter Chapman, founder of consulting firm SKUFood and a former Loblaw executive.

For one, the country91裸聊视频檚 relatively small population and spread-out geography make it a challenge for companies to build up a network of stores and distribution centres, especially for fresh food, he said.

91裸聊视频淟ogistics are a huge component of success in this industry, and can be a big part of your costs,91裸聊视频� said Chapman.

91裸聊视频淪o if you don91裸聊视频檛 figure out how to move product around properly 91裸聊视频� you can run into a lot of problems.91裸聊视频�

Other barriers include requirements and regulations, plus the difficulties of marketing to vastly different parts of the country, such as Quebec.

91裸聊视频淚t91裸聊视频檚 not a given that just because you open a store and open your door with some products in it that people are going to leave the existing retailer where they shop,91裸聊视频� said Chapman.

Canada already has a 91裸聊视频渞obust91裸聊视频� discount grocery segment, he added, between the discount banners of the major retailers, Walmart, and lower-priced stores such as Dollarama expanding their grocery offerings.

If a new discount competitor entered the market, 91裸聊视频渨hat prices would they have to go to to be able to carve out their niche in the market? And can they operate at that level?91裸聊视频� asked Chapman.

The government should be focused on helping the Canadian industry, not just the grocers but also companies along the entire supply chain, said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.

91裸聊视频淚91裸聊视频檓 disappointed because I don91裸聊视频檛 see how bringing another foreign chain into Canada is going to help competition or help consumers.91裸聊视频�

There are already two major U.S. grocery chains in Canada, noted Chapman: Walmart and Costco.

A new entrant would likely struggle if it tried to open up a lot of new stores at once, instead of building up a network slowly, said Chapman.

91裸聊视频淭arget did try to open a lot of stores on one day,91裸聊视频� he said, but that Canadian expansion famously didn91裸聊视频檛 last.

The popular retailer burst onto the scene in 2013 after acquiring most of Zellers91裸聊视频� real estate assets several years earlier. But less than two years after opening the first Canadian Target location, the chain announced it would close its 133 stores across the country, with 17,600 employees losing their jobs.

A more recent example is Nordstrom, a high-end department store from the U.S. that closed its Canadian stores in 2023, less than a decade after opening its first Canadian location in 2014.

Target and Nordstrom both struggled because they didn91裸聊视频檛 fully understand the Canadian market, said Liza Amlani, principal and co-founder of Retail Strategy Group.

Retailers entering Canada often fall into the trap of thinking it91裸聊视频檚 just 91裸聊视频渢he north of the U.S.,91裸聊视频� she said.

But despite the challenges of bringing foreign chains to Canada (and keeping them), a new entrant could fill some of the gaps Canadians face when it comes to choice and price, said Amlani, it just has to be done right.

91裸聊视频淪tart small, test the market before you91裸聊视频檙e going to go ahead and open up a hundred stores.91裸聊视频�

If Champagne is successful in bringing a foreign chain to Canada, it won91裸聊视频檛 be just because he asked, said Chapman.

91裸聊视频淚 think they would explore the opportunity if the government was offering some different things 91裸聊视频� some sort of enticements,91裸聊视频� he said.

But Chapman believes Canada would be better off to 91裸聊视频済row and strengthen from within91裸聊视频� in order to drive competition without having to entice a foreign player into our market.

He said there are already lots of smaller and regional grocery companies in Canada that the government could be boosting in the name of competition, instead of reaching out to bigger fish across the border.

91裸聊视频淟et91裸聊视频檚 look at the people who are already operating here and figure out how to find opportunities for them to grow and increase competition in the market,91裸聊视频� he said.

Sands and Chapman agree that the grocery code of conduct currently near completion could help level the playing field for small- and medium-sized grocery companies, in turn driving competition.

But after two years of work on the code, a voluntary agreement meant to apply to both retailers and suppliers, the group responsible for its development said in December that its launch is being held back because Loblaw and Walmart refuse to sign.

The two grocers have expressed concern that the code could raise costs for Canadian consumers.

Federal Agriculture Minister Lawrence MacAulay has said the government is looking at all available options to move the code forward, including legislation.

The government should prioritize getting the code over the finish line, said Sands.

91裸聊视频淭hat will do more to help the independent grocers in Canada, it will do more to help Canada91裸聊视频檚 smaller and medium-sized producers and processors 91裸聊视频� instead of getting on phone calls with foreign chains.91裸聊视频�

91裸聊视频� With files from David Friend

Rosa Saba, The Canadian Press