Toronto is one of the most diverse cities in the world, with almost 50 percent of its population born outside Canada, according to Canada Population.
It is also the largest city in the country, with more than 2.7 million residents in 2022. The Greater Toronto Area (GTA), which encompasses Toronto and its surrounding cities, had a population of 6.4 million, representing about 18.1 percent of all Canadians.
The top five Canadian grocery operators by retail sales are all present in this market.
Loblaw Companies Limited, whose market share across Canada is 28 percent according to a 2022 U.S. Department of Agriculture (USDA) report, counts Loblaws, No Frills, Fortinos, Freshmart, and T&T Supermarket among its banners in the GTA.
Empire Company Limited, with a 20-percent market share nationwide, operates Sobeys, Safeway, Sobeys Urban Fresh, Foodland, and FreshCo in the region.
Metro Inc., with an 11-percent market share, is in Ontario with its Metro and Food Basics banners.
Nationwide, these ‘Big Three’ companies, plus Costco and Walmart, account for close to 76 percent of grocery retail.
Beyond the biggest players
Toronto’s retail landscape is more diverse than many other parts of the country, with a range of smaller-format, independent, and specialty retailers complementing the dominant players.
Former key independents like Farm Boy and Longo’s have been acquired by the major players in recent years.
A record number of people moved away from the GTA and Toronto itself between July 2020 and July 2021—a 0.6-percent decline in Toronto in just one year—as people fled to other regions, marking the first population loss for the city in two decades.
While the move to the suburbs has slowed, thanks to the end of pandemic lockdowns as well as high mortgage rates, the population remains down, and the biggest players have shuttered some stores in recent years.
Nevertheless, the GTA remains relatively crowded with grocery options.
PRICING UPS AND DOWNS
The intense retail competition in the GTA typically keeps grocery prices lower than in other parts of the country, despite Toronto having one of the highest costs of living in Canada overall.
That said, prices have been on the rise and Toronto shoppers took notice.
Not only were examples of sky-high priced products widely circulated on social media, but the press picked up on shoppers’ dismay as well.
Statistics Canada pegged the country’s year-over-year inflation rate at 5.2 percent in March 2023, down from 6.3 percent in December, which in turn was lower than previous months.
But food prices, including grocery and foodservice, were still climbing earlier this year, continuing a trend of more than a year.
One example is fresh vegetable pricing. For produce vendors, inflation exacerbated supply issues, mostly caused by weather disruptions.
“The fall transition of leafy greens from Salinas to the desert was a challenge for our salad and lettuce categories due to a variety of challenges both areas faced,” says Hutch Morton, senior vice president at J.E. Russell Produce Limited in Toronto.
“With sky-high prices for less-than-perfect product, it creates distortions in the market,” he continues.
“These market conditions are even further strained by the inflation faced by the entire supply chain. These challenges created margin pressure, but also introduced opportunities for us to bring new shippers into our business, which has turned into a positive,” he says.
This is an excerpt from the May/June 2023 issue of Produce Blueprints Magazine’s Ontario Supplement. Click here to read the whole supplement.
