Unclear if premier's plan to tackle food prices will work

It's a move being applauded by independent grocery organizations.

Shopper Reid Puloski said grocery prices are crazy.

"Ridiculous, plain, that's the only word, ridiculous," said Puloski.

Like everyone else, he has no choice but to pay up.

"I'm not a huge eater, so I'm lucky in that way, so I just grin and bear it." 

This week Premier Wab Kinew promised to take action on food prices by fostering more choices. In his throne speech, he pledged to end property contracts where grocery chains restrict rival stores from setting up shop nearby.

"Without competition, grocery prices go higher. We want grocery prices to come down," said Kinew Tuesday.

Foodfare owner Munther Zeid said he's experienced this firsthand. At one time he wanted to buy an empty building owned by a big chain grocery store. But there was a clause preventing him from using that space to sell food.

"It was a good opportunity. The neighbourhood needed it,” said Zeid. “It was for sale, but I couldn’t do a grocery store in it."

Gary Sands from the Canadian Federation of Independent Grocers welcomes the move by the Manitoba government. He said there are scenarios where the contracts are reasonable, but in other cases they are not.

"They're barriers to competition, they're barriers to people entering the market, and they're unfair to consumers," said Sands.

But he isn’t sure this one measure alone will lead to a major break in prices.

"I wouldn’t want to make that leap to Canadians and to Manitobans and to the people of Manitoba,” said Sands. “I just think there's too many things that are impacting the supply chain."

Those things include the war in Ukraine, port and rail disruptions, wildfires, floods, and the pandemic.

Sands said his organization would like to see a reduction on credit card swipe fees, which he said costs grocers billions of dollars and they get passed on to shoppers.

Zeid isn't convinced ending the property contracts will drive down prices. He said there are already enough grocery stores in the market. Zeid said the real competition issue is a lack of wholesalers, where grocery stores like his buy their products from.

"You have to be able to offer prices at a cheaper price to get the price down,” said Zeid. “At the retail level, we're already dropping our margins as much as we can on the groceries."