Ottawa – The Public Interest Advocacy Centre (PIAC) recently commented on the Competition Bureau’s consultation, Behind the price tag: Examining the food supply chain. The Competition Bureau is examining how the food supply chain operates to identify how greater competition can improve outcomes for Canadians at the grocery store. PIAC’s submission focused on retail pricing practices in the grocery sector and their effects on consumers, particularly lower-income and vulnerable consumers.
PIAC highlighted the challenges consumers face in comparing grocery prices and recognizing when they are getting less value for their money. While loyalty programs and member-only offers can provide savings, complicated conditions, digital requirements and data-sharing demands may put those savings out of reach for some shoppers. PIAC recommended that the Bureau examine the practical implications of retail pricing practices for consumers in the Canadian grocery market. That could be done with further consumer-centric research and analysis, including research involving lower-income and vulnerable consumers.
Personalized pricing may also allow retailers to charge more to consumers who have fewer alternatives. PIAC commented on how shrinkflation—smaller quantities for the same price—and skimpflation—lower quality for the same price—can make it harder to spot reductions in value and choose better alternatives. PIAC discussed how standardized unit pricing can help consumers compare products and package sizes, while emphasizing that it cannot, on its own, reveal reductions in product quality.
PIAC recommended the following:
- Require standardized unit pricing in stores and online: Packaged groceries should display both their selling price and their price per standard unit, such as per 100 grams. Comparable products should use the same measure so shoppers can easily compare value across package sizes. These requirements should cover regular, sale and member prices, as applicable.
- Make discounts and their conditions easier to understand: Member and non-member prices should appear side by side, with the conditions for receiving a discount immediately beside the offer. A member or targeted price should be presented as a conditional discount, separate from the generally available public price, rather than replacing it. This would give consumers a clear benchmark for assessing savings.
- Protect consumers’ personal information: Access to an advertised grocery price should not depend on consenting to marketing, third-party data sharing or other uses of personal information that are unnecessary to administer the discount. Where data collection is necessary, retailers should clearly explain what information they collect, how it will be used and shared, how long it will be retained for, and whether it will be used to select or calculate prices.
- Require clear notices for shrinkflation and material skimpflation: Where the quantity, volume and/or count of a familiar prepackaged grocery product decreases and its unit price increases, a clear notice should appear beside the shelf price and on the product’s online page. PIAC also asked for a more comprehensive disclosure requirement related to skimpflation that could be harder to detect by consumers.
- Protect consumers against unfair personalized and algorithmic pricing: Retailers should not be permitted to charge a consumer more than the public price, or more than otherwise comparable shoppers, because personal or behavioural data suggest that the consumer is willing to pay more or unlikely to switch stores.
- Strong oversight, redress and implementation: PIAC submitted that compliance should not depend on individual consumer complaints. Relevant governments and regulators should proactively monitor compliance and coordinate their efforts to ensure that the framework operates effectively.
For PIAC’s submission, and more details, see here.
