Walk into a Canadian supermarket today and the numbers tell a troubling story. Grocery bills climb higher each month, outpacing overall inflation, while major chains continue to post record earnings. Tariffs may have been lifted, and subsidies extended to ease the shocks of global trade disruptions, but the relief never seems to reach the checkout line. What looks like a competitive market on the surface is in reality a highly concentrated oligopoly—one that shapes not only prices but the very possibility of doing business in Canada. The difficulty of building new alternatives exposes the contradiction at the heart of this system: it is capitalism in name but feudal in practice.

The Numbers Behind the Checkout

• 3.5% – Food price increase in August 2025, versus 1.9% general inflation.

• $3.6 billion – Combined profits of Loblaw, Metro, and Sobeys in 2022, up from $2.4 billion in 2019.

• 80% – Approximate share of market controlled by the “Big Five” (Loblaw, Sobeys/Empire, Metro, Costco, Walmart).

• 20% – Share of Metro suppliers who requested price hikes in 2025 due to tariff costs.

The Tight Grip of the Big Five

Five supermarket chains dominate Canada’s grocery landscape. They control not only what Canadians buy, but where and how they buy it. Discount banners, loyalty programs, pharmacy tie-ins, and restrictive property covenants keep rivals out and customers in. Independent grocers, in a bitter twist, often have no choice but to buy wholesale from the very giants they compete against. The Competition Bureau has called this unhealthy concentration a threat to competition, urging reforms like banning restrictive covenants and enforcing standardized unit pricing. But reforms are slow to materialize, and in the meantime, the incumbents only tighten their grip.

Prices, Profits, and Power

Grocers argue that their net margins are razor-thin, but gross margins tell a different story. Between 2019 and 2022, profits at the big three surged by 50%. Loblaw, in particular, has been singled out for reporting record profits while households cut back on essentials. Private labels and loyalty cards have become the modern tools of control, creating closed ecosystems where consumers are locked into cycles of rising costs. In this system, value is not passed back to families; it is captured by corporations skilled at extracting more from every dollar spent.

Sidebar: Where the Money Goes

Consumers: Pay higher prices at checkout.
Suppliers: Face fees, deductions, and delistings.
Grocers: Capture value through scale, margins, and financial engineering.
Government: Deploys subsidies and tariff relief that rarely trickle down to households.

The Supplier Squeeze

Behind the bright aisles of supermarkets lies a more extractive reality. Small and local suppliers describe a punishing system: steep listing fees just to access shelves, penalties for minor delays, and deductions that appear without warning. Government consultations confirm that risks are routinely shifted downstream onto suppliers. In 2024, Ottawa introduced a Grocery Code of Conduct, but with no strong enforcement or transparent dispute resolution, many suppliers doubt it will be more than symbolic. For smaller players, the choice is stark: accept the terms or lose shelf space altogether.

Tariffs, Subsidies, and Who Really Benefits

The tariff story reveals the structural imbalance most clearly. When counter-tariffs were imposed, Metro admitted that one in five of its suppliers requested price increases directly tied to tariff costs. Ottawa responded with remissions and subsidies, but these programs were targeted at manufacturers and processors, not retailers. Still, the benefits flowed to the grocers: lower supplier costs and the eventual removal of tariffs in September 2025 meant reduced procurement burdens. Consumers saw little of this relief at the till. Subsidies, in effect, socialized costs but left profits untouched, reinforcing the imbalance.

Beyond Capitalism: A Market That Isn’t One

International comparisons underscore how unusual Canada’s structure is. In the United States, the top grocers still compete with a large number of regional chains and independents, and even Walmart faces meaningful rivals across markets. In much of Europe, strict competition laws and robust discount grocers like Aldi and Lidl keep pricing pressure strong, while co-operative grocery models offer alternatives. By contrast, Canada’s food market is unusually concentrated, with five firms controlling the majority of sales nationally and even higher shares in smaller provinces. This exceptional level of concentration magnifies the effects of subsidies and tariff relief: where other countries might see competitive pressure forcing benefits down to consumers, Canada’s oligopoly captures them at the top.

Markets are supposed to reward innovation and rivalry. Canada’s grocery sector, however, functions more like a closed estate. High barriers to entry, strategic real estate lock-ups, and entrenched distribution networks create a system where genuine competition is largely impossible. State interventions—from GST rebates to tariff subsidies—end up propping up incumbents rather than disrupting their dominance. What emerges is not capitalism but oligarchic rent-seeking, dressed up in market rhetoric.

For aspiring grocers, co-operatives, or new distributors, the odds are stacked against them. Financing is scarce, supply chains are locked, and economies of scale operate as barriers rather than enablers. The result is a food economy that feels less like a free market and more like feudal control over access to basic goods.

Food inflation in Canada is not a passing storm caused by global weather or geopolitical tensions. It is a structural feature of a system that consolidates power at the top and externalizes costs downward. Unless Canada confronts the oligarchic nature of its supermarket sector—with robust antitrust enforcement, real support for independents, and a rethinking of subsidy design—households will continue to bear the brunt while corporations consolidate control over the nation’s pantry.