Grocery Store Openings Mask Declining Competition in Canada's Retail Landscape
Canada's major grocery chains continue to announce ambitious expansion plans, with Loblaw recently revealing a $2.4-billion investment to open approximately 70 new stores across the country in 2026. This follows Metro's announcement of plans to open about a dozen new locations, primarily focusing on discount brands like Super C and Food Basics. At first glance, these developments appear to signal robust growth and increased consumer choice in the food retail sector.
The Reality Behind the Headlines
However, a closer examination of industry data reveals a more complex and concerning picture. According to IBISWorld research, Canada had 8,801 supermarkets and grocery stores at the end of 2025, excluding specialty shops and convenience stores. This represents 21.0 stores per 100,000 residents. In 2020, that figure stood at 22.1 per 100,000, indicating a noticeable decline. Current projections suggest the ratio will fall further to 20.9 in 2026, representing a 5.4% decrease since 2020.
What makes these announcements particularly misleading is what they omit. While grocery chains enthusiastically publicize new store openings, they rarely disclose how many locations will simultaneously close. This critical missing information prevents consumers and policymakers from understanding the true evolution of the market. Loblaw faced significant public backlash several years ago when it did disclose store closures, highlighting the optics-driven nature of these announcements.
Comparative Analysis with the United States
The situation becomes even more striking when compared to the United States. In 2020, the U.S. had 19.0 supermarkets per 100,000 residents. By 2025, that number had edged down slightly to 18.8 and is expected to remain stable in 2026, representing a decline of barely 1%. While Canada experiences a noticeable contraction in store density, the ratio south of the border has remained largely unchanged.
Comparing North America with Europe presents additional complexities. Europe's agri-food economy is far more regionalized, with retail built around proximity and walkability. In contrast, North America's retail model still depends heavily on automobiles and longer travel distances, making direct comparisons challenging.
Implications for Canadian Consumers
The declining store-per-capita ratio doesn't necessarily mean fewer choices for consumers. There remains room for smaller players and independent grocers who differentiate themselves by offering unique products and services across the country. However, the trend does indicate there are fewer large-format stores per Canadian than there were five or six years ago, an important nuance that triumphant press releases tend to obscure.
Determining the optimal number of supermarkets in a country as vast as Canada presents significant challenges. Renewal and modernization of store networks are certainly welcome developments. As Canada's population growth slows, we can reasonably expect stabilization, and perhaps even rationalization, in the number of supermarkets nationwide.
The Broader Context
In food retail, as in economics, context matters far more than headlines. Growth announcements from major chains don't automatically translate to increased competition or lower prices for consumers. The reality is that while Canadians hear about new store openings, they're actually experiencing a gradual reduction in supermarket density that could have implications for market competition and pricing dynamics.
The annual choreography of expansion announcements creates an impression of vibrant growth, but the underlying data tells a different story. As grocery bills remain a significant concern for many Canadian households, understanding the true state of retail competition becomes increasingly important.
