Retail resilience: Building a competitive F&B sector

Most Canadians do a weekly grocery run and know the routine well: the same stores in nearly every community, the same products on the shelves, and prices that often move in step. But behind that familiarity lies a system where a handful of retailers hold most of the market. Their size and reach make it possible to stock stores across the country, but it also leaves limited room for smaller businesses to compete.

This concentration brings stability and scale, yet it comes with trade-offs. Producers often face fewer opportunities to get their products in front of consumers. Innovation tends to slow when there are only a few doors to knock on, and while choice may appear plentiful, the reality is far more limited.

Canada has the potential to build a more balanced system. By ensuring that businesses of all sizes have space to thrive, the retail sector can become more dynamic, more competitive, and better prepared for the challenges ahead.

Why concentration matters for Canada

A small group of companies, four to be exact, now accounts for 72 percent of the national grocery market according to the Global Agri-Food: Most Influential Nations Ranking. Canada scored a three on market share and influence of major agri-food retailers. A score considered a low performer, trailing behind peers such as France, Italy, and Japan. In fact, it’s a problem that has worsened since the last Global Agri-Food report findings which found 65 percent of Canada’s grocery market share consisted of three major retailers.

The report also reveals how other countries with a more diverse system can look. In China, supermarkets and hypermarkets make up just 32 percent of the market, while small grocers account for more than half. In India, the contrast is even sharper. Supermarkets represent only 2.5 percent of food retail, while more than 90 percent of the market is supported by small, family-run stores. Even in South Korea, where three hypermarkets account for only 18 percent of sales, independent grocers handle 77 percent of supermarket sales.

These systems demonstrate how diversity builds resilience. Multiple sales channels ensure producers have more ways to reach customers, consumers have more variety, and the sector adapts more quickly to change. By comparison, Canada’s high level of concentration limits competition and makes it harder for new ideas to gain traction.

The opportunity to rebalance

Consolidation does not need to define the future. Canada can encourage greater competition while preserving the efficiencies that scale provides.

Policy adjustments can also make a difference. The Grocery Code of Conduct, once fully adopted and applied, is expected to provide greater clarity and consistency in how suppliers and retailers work together. Reducing interprovincial trade barriers could further improve efficiency, creating smoother pathways for businesses of all sizes to expand across the country.

Technology is another lever. Globally, markets with strong digital adoption have created more resilient systems. South Korea shows the potential: e-commerce already accounts for 27 percent of grocery sales and continues to grow. By contrast, only 2.5 percent of Canadian retailers use advanced digital platforms. Supporting adoption at every level of the sector would help even the smallest businesses harness consumer insights, build loyalty, and expand their reach.

Collaboration also creates opportunity. Cooperative e-commerce platforms, regional branding campaigns, and shared logistics networks can help smaller retailers and producers gain scale while retaining independence. These approaches are common in places like Italy and France, where regional identity and cooperative models strengthen competitiveness.