Canada's shopping for a foreign grocer. Can an international retailer succeed here?

With some Canadians struggling to afford groceries, and as frustrations with corporate profits boil over and manifest as boycotts, the federal government says it's trying to coax international grocers to set up shop in Canada.

During a Tuesday media conference, Industry Minister François-Philippe Champagne told reporters that he continues «to look at whether there are foreign deep-discounters that would be interested in the Canadian market.»

The minister has been open about his plans for months, and the Wall Street Journal first reported last month that he was courting a dozen European and U.S. companies, including German chains Aldi and Lidl, and U.S. chain Grocery Outlet Holding.

Yet grocery industry analysts in Canada say dangling a carrot in front of an international supermarket brand won't solve the consolidation problem — if there's a carrot to dangle at all.

Giving Canada's grocery giants a run for their money would require massive operational scale and investment in the country's market, said Kevin Grier, a livestock, meat and grocery market analyst based in Guelph, Ont.

«And for what? For what return? I'm sure they're wondering what the return would be,» said Grier of the foreign grocers on Champagne's list. «I don't think there's a lot of, you could say, excess to be garnered [in the Canadian market].»

When the Competition Bureau released a wide-ranging report in June 2023 that assessed the state of the Canadian grocery industry, it concluded that more competition was needed to bring prices down — and that the entry of a foreign grocer could help.

«Listen, are we going to succeed? I don't know,» Champagne said. «Is it worth the effort? Definitely. We're going to keep on pushing.»

Scale of Canadian market poses