Industry Insiders Skeptical of New Grocery Code's Impact
A recent survey conducted by CIBC Capital Markets has revealed that the majority of grocery industry professionals in Canada do not anticipate the newly implemented Grocery Code of Conduct to produce any significant effects on the sector. The voluntary agreement, which took effect on January 1, 2026, was designed to enhance relationships between food suppliers and retailers.
Survey Reveals Overwhelming Doubt
According to the CIBC research, which polled nearly 100 Canadian grocery insiders including retailers, wholesalers, suppliers, and brokers, over 81 percent of respondents answered "no" when asked if the code would have any notable impact. This question elicited the most decisive majority response in the entire survey.
CIBC analysts Mark Petrie and Chantel Pearce noted in their report, "Our sense from the supplier community has always been that a code of conduct would not materially change the balance of power in food retailing, so we were not surprised to see a lopsided response." They described Canada's first comprehensive Grocery Code of Conduct as entering uncharted territory this year.
Code Implementation and Industry Response
The voluntary industry agreement was finally signed in December after years of discussions and delays. All five major grocery retailers in Canada participated, including:
- Loblaw Cos. Ltd.
- Empire Co. Ltd.
- Metro Inc.
- Costco Wholesale Canada Ltd.
- Wal-Mart Canada Corp.
Several large suppliers also signed the agreement. The code was created specifically to improve the relationship between companies that supply food and other products and the retailers that sell them.
Perceived Limitations and Potential Benefits
The survey revealed several common themes among respondents. Many indicated it was too early to see any results, while others described the code as more performative than substantive, noting it lacks mechanics for enforcement. Those few who responded positively primarily highlighted the potential for improved partnerships across the industry, particularly between retailers and suppliers.
Despite their skepticism about immediate impact, the analysts noted they "do expect change as a result of the code," largely in cleaning up some grey-area dealings and potentially promoting supply-chain efficiencies and product innovation.
Broader Economic Context and Industry Outlook
The survey responses affirm that while 2026 presents unique challenges and dynamics, the grocery industry appears well equipped to navigate the uncertainty. The industry expects focus to remain on value amid a challenging economic backdrop, with 70 percent of those surveyed expecting food inflation to hold in the three to four percent range.
This persistent inflation is buoyed by ongoing commodity pressure and overall cost inflation. The report highlighted how macroeconomic uncertainty continues to weigh on consumers, with "trade-down" and value-seeking behavior expected to continue throughout the year.
Only three percent of respondents expect this consumer behavior to reverse in 2026, while the remaining respondents were nearly evenly split on whether the trend would gain momentum or hold steady.
Growth and Competition Projections
Interestingly, respondents expect grocery industry square-footage growth to accelerate this year, even as population growth continues to slow. A narrow majority view this expansion as manageable after several years of population growth exceeding square-footage growth.
The report indicated that 48 percent of respondents believe this will lead to increased competitive activity as retailers look to support the ramp-up of new stores. This suggests that while the code itself may not dramatically alter industry dynamics, traditional competitive pressures will continue to shape the grocery landscape.
The survey results paint a picture of an industry focused on practical challenges rather than regulatory changes, with value propositions and inflationary pressures taking precedence over the new voluntary code of conduct.
