Food Retail in Canada

A cornerstone of the distribution sector, the supermarket and grocery segment accounts for more than one-third of retail sales of everyday consumer goods.
Dominated by a few integrated groups, it combines near-national geographic coverage, multi-format offerings (hypermarkets, discount stores, convenience), and increasingly advanced digital services.
However, daily operations unfold in a high-pressure environment: intensified competition from general big-box retailers and online platforms, price volatility in agricultural commodities, strict regulatory requirements, and political scrutiny over market power.

For an investor, understanding these dynamics is essential to identify growth opportunities (differentiated products, short supply chains, customer experience) and to accurately assess target valuations.

Key Market Indicators

Three metrics summarize the current scale and performance of the sector; they serve as benchmarks for evaluating the attractiveness of a potential acquisition.

Market Size

$115.8B

$115.8B in revenue generated in 2025 by over 13,000 points of sale, with a projected compound annual growth rate of about 1% over the next five years.

Sector Employment

435 000

Direct jobs, with an average productivity of $266,000 per employee, reflecting a business model still heavily reliant on labor despite increasing automation in checkout and logistics operations.

Average Profitability

2,1 %

Profit margin in 2025, a modest rate but improved by 0.3 percentage points since 2020, thanks to economies of scale and the private-label offerings of large retail groups.

Outlook and Key Issues for Investors

In the medium term, sector growth will rely on three main levers:

  1. The sustained rise of omnichannel commerce,
  2. The reconfiguration of product offerings toward healthy and sustainable goods, and
  3. Cost optimization through predictive analytics and robotics.

Acquisitions will remain the preferred expansion strategy—both to strengthen regional presence and to secure upstream (production, logistics platforms) and downstream (pharmacies, fuel, financial services) operations.

However, increased government intervention in pricing practices and social pressure for affordable food will demand greater vigilance in compliance and pricing strategy.

A savvy investor will therefore favor banners capable of combining:

  • Differentiation (organic lines, short supply chains, urban formats),
  • Financial strength, and
  • Robust ESG governance.

Three metrics summarize the current scale and performance of the sector; they serve as benchmarks for evaluating the attractiveness of a potential acquisition.

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