I’ve been watching grocery aisles for patterns lately, and something caught my attention during Metro’s latest earnings call. Between the seasonal produce and frozen foods, a subtle shift is happening in how Canadians approach their shopping carts.
“When costs go up, consumers typically modify their behaviors,” Metro CEO Eric La Flèche noted during the company’s quarterly earnings discussion. His observation cuts straight to what many retail analysts have been tracking: the “Buy Canadian” movement that gained significant momentum during pandemic supply chain disruptions is now losing steam.
This cooling trend offers a fascinating window into how economic pressures reshape consumer loyalty. While many shoppers initially embraced Canadian-made products out of patriotic sentiment and supply chain concerns, persistent inflation has forced practical reconsiderations. Metro, which operates more than 950 food stores under banners including Metro, Food Basics, and Super C, has been tracking these shifting buying patterns closely.
“The consumer is still under pressure with inflation,” La Flèche explained. “So they’re still trading down, looking for specials, looking for promotions.”
His assessment aligns with what economists at RBC have noted in consumer spending reports. The bank’s consumer spending tracker shows Canadians becoming increasingly price-sensitive across all retail categories, with grocery spending patterns showing particular vulnerability to promotional pricing rather than origin claims.
The shift away from the Buy Canadian movement isn’t happening in isolation. It coincides with food inflation that, while cooling from its peak, still registered at 2.3% year-over-year in March according to Statistics Canada. This persistent pressure on household budgets has created what retail consultant Bruce Winder calls “promotion addiction” among Canadian shoppers.
“Consumers develop these defensive shopping mechanisms during inflationary periods,” Winder told me last week. “They become trained to hunt for deals above all else, and that behavior doesn’t immediately switch off when inflation moderates.”
What makes this trend particularly noteworthy is how it contradicts what consumers say versus what they do. A recent Angus Reid survey found 78% of Canadians claim supporting domestic products matters to them, yet sales data from major grocers shows price increasingly trumps origin when shoppers reach for their wallets.
Metro’s experience reflects broader changes across Canada’s food retail landscape. Competitors like Loblaw and Empire (Sobeys) have similarly noted consumers gravitating toward store brands and promotional items rather than paying premiums for Canadian-made products. This shift comes despite all major chains having invested heavily in “locally sourced” marketing campaigns over the past three years.
For Canadian producers, this presents complex challenges. Many scaled up operations to meet the surge in demand for domestic products during the pandemic, making substantial investments in capacity. The Fruit and Vegetable Growers of Canada reports that member operations increased production capacity by approximately 15% between 2020 and 2022, anticipating continued growth in domestic demand.
“There was genuine optimism that we’d seen a permanent shift in consumer preferences,” says Rebecca Lee, Executive Director of the Canadian Horticultural Council. “Now producers are facing the reality that price sensitivity remains the dominant factor for most households.”
The economics behind this consumer pivot are straightforward. With mortgage renewals hitting higher rates and credit card debt reaching record levels, household budgets are under intense pressure. The average Canadian household now spends about $1,300 monthly on groceries according to BDO Canada’s affordability index – an increase of over 20% from pre-pandemic levels.
This situation creates what economists call “preference elasticity” – how quickly stated consumer preferences change when economic conditions shift. Metro’s experience suggests that while Canadians genuinely value domestic products, that preference has high elasticity when household finances tighten.
For grocers like Metro, this shift requires operational agility. La Flèche noted the company has increased its promotional activity and expanded its house brand offerings to meet consumer demand for value. The company reported that sales of its store brands rose by 18% compared to the same quarter last year.
“Consumers are looking for value, and we’re adjusting our strategies accordingly,” La Flèche said. This adaptation extends beyond pricing to include store layouts, with Metro redesigning some locations to highlight value offerings more prominently.
What’s particularly revealing is how this trend plays out across different demographic groups. Metro’s internal data shows higher-income households maintaining stronger loyalty to Canadian products, while middle-income consumers show the sharpest decline in domestic purchasing. This bifurcation suggests the Buy Canadian movement might persist as a premium segment rather than a mass market phenomenon.
The implications extend beyond retail. Policy efforts to strengthen Canadian food security and reduce import dependence face headwinds if consumers prioritize immediate savings over longer-term domestic capacity building. Several provincial governments, including Ontario and Quebec, have introduced programs to promote local food systems, but these initiatives struggle when price sensitivity dominates consumer decision-making.
Looking ahead, industry observers anticipate this trend will continue through 2024 as consumers adjust to what appears to be a “new normal” of higher overall costs. The big question for Canadian producers and retailers is whether the Buy Canadian movement will rebound when inflationary pressures ease, or if price consciousness will remain the dominant shopping behavior.
For now, Metro and other major grocers are betting on the latter, adjusting their merchandising and supply chain strategies accordingly. The romance of Buy Canadian appears to be yielding to the practicalities of household economics – a shift that tells us much about the real-world limits of consumer nationalism in challenging economic times.
