Monday, June 9, 2014

Are U.S. groceries cheaper?

Kevin Grier and Al Mussel of the George Morris Centre have published an online report that compares grocery prices in Canada and the United States.

The conclusion: prices aren't all that much different when all relevant factors are taken into account.

Sorry, guys, but you can't persuade my wife who does the grocery shopping.

She always remarks every March, when we spent the month in the U.S., that grocery prices are lower there.

More important, she appreciates the greater selection of products that appeal to her.

My opinion is that the Canadian market is far too dominated by Loblaws, Sobey's and Metro. That keeps a lot of innovative products off the Canadian market.

As for constant reminders from these big three that they are facing stiff competition from Wal-Mart and Target and other major retailers beginning to offer a limited line of groceries (eg. Canadian Tire), I don't believe it. 

Their financial reports indicate that their margins have steadily widened over the last five years and, if they were really feeling the pinch from competition, you'd think they would find ways to narrow their margins.