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Project Hammer: reduce collusion in the Canadian grocery sector

huitzitziltzin
32 replies
21h24m

‘’’ Reach out to me (email “jacob” at this website) if:

You can do economic analysis of pricing data, and especially the interaction/correlation of multiple streams of prices across time ‘’’

The item in that quote is significantly, significantly harder than the author is giving it credit for. Canada has a competition policy agency. They are (almost surely) entitled to demand data from firms as part of an investigation. Their data will be better than the data here.

You can rarely if ever prove these cases on the basis of data analysis alone. (Indeed if you could the world’s antitrust agencies would just monitor such data! And anyone engaging in collusion would attack the monitoring adversarially - not that hard to predict!)

In grocery data you will be looking at thousands and thousands of prices of different goods from different suppliers with different costs who are exposed to different shocks due to variation in the costs of their inputs or god knows what else.

Not to be negative bc the idea is nice, but this is a complete waste of time.

~ an actual antitrust guy.

surgicalcolor
11 replies
20h51m

Conversely, I think you're overestimating the technical capailities of Canadian federal or provincial regulatory organizations.

Government departments notoriously have serious technical debt, so while they might entitled to demand this kind of data, I sincerely doubt they are doing it with anything resembling modern data analysis. These orgs aren't going to have working data lakes, spark clusters or data warehouses on cloud infrastructure. They maybe have legacy SQL databases being pulled into spreadsheets.

So, while their data access might be better theoretically, I doubt they truly are able to even remotely analyze the data effectively. Data science in govt is notoriously poor outside of Statscan or other tech heavy departments.

huitzitziltzin
9 replies
17h37m

Canadian economics departments are full of really smart economists. They are happy to help.

The issue here has nothing to do with the size of the data. A grocery store will have 100,000 products at most, probably sets prices about weekly and maybe you have ten years of data. The market is an oligopoly so you have 10-15 store chains. That fits in memory.

The issue is not at all the mechanics of running the analysis but what analysis you run. Or don’t run bc as I said there is no easy way to just “identify collusion” in data like this or every agency would already be doing it

wjnc
4 replies
8h4m

1. If anything, this public dataset will increase 'collusion' by giving the parties in the market access to the integral set of market prices.

2. Collusion is a strong word. It hints at breaking the law, willfull action, etc. Looking at the price of a competitor and acting upon that, and internal information, is not collusion. It is completely legal and economically rational behaviour. There are hints and information everywhere on which to act. Groceries are an oligopoly, and they are ogipolistic buyers as well. Lots of information for grocers in the price bids of their suppliers, that all groceries get in tandem.

3. I've worked as an economist at one of those government agencies. They are filled with keen PhD / MSc economists looking to bust kartels and find collusion. Geographical price dispersion models are so '00s. There is a lot of positive energy and interaction between academia and government. Actually _proving_ collusion is terribly hard. Prices that move in parallel is not collusion. Proving collusion is finding documents, emails, phone calls, tracking cars with staff members of various firms to motels , paper trails of inside information in another firm. That's collusion. And I fear that's not what happens in the grocery sector.

The motel one comes to mind as real life example of how DoJ in the US prosecuted a proper cartel. The talk was by more a broad-shouldered officer type, than an economist. Certain set of transport firms always had a interesting way of responding to auctions. Always the second best offer was quite far behind and there was a pattern to which firms did or did not reply to a bid request. End of the investigation, they could trace employees of the firms to meeting in a motel before bidding. And somebody left a paper trail.

mistermann
3 replies
5h20m

I've worked as an economist at one of those government agencies. They are filled with keen PhD / MSc economists looking to bust kartels and find collusion.

There is the skillset of the employees, and then there is what management allows employees to work on. A decade or so ago, a Statistics Canada senior manager was interviewed and claimed as fact that they were unable to reproduce an Excel model that analyzed the % of real estate sales to recent immigrants to Canada, one that an individual CRA team (one person I suspect, it's not complicated) in Richmond BC had done a few years before.

At the same time, they were given additional budget of many millions of dollars to accomplish this task and other things. They did not accomplish the task.

Proving collusion...

The government has tipped their hand already as far as I'm concerned. I don't expect anything would ever be proven, I just want to see as much evidence as possible to help me decide what I am going to believe - I'm certainly not going to take epistemic advice from anyone in the Canadian government.

wjnc
1 replies
4h33m

Totally get your point between individual skill / trust and the agency level. In my little country we had a recent event where a governement agency, pretty much failing for the last 20 years, but especially pronounced the last 5 years suddenly came clear in a PR-move. What? Turns out a newspaper had succeeded in a neatly tuned FOIA-request (local equivalent) and forced their hand. At the same moment a vote was underway for extra budget, looking to fail. So the sudden transparency was really pretty ugly.

Surrounding collusion. I can’t tell you what to believe, but keep in mind that there are a lot of reasons why correlated moves in prices can occur without communication. Lots literature in industrial organization (the field of why markets have particular ordening and how actors behave on markets) on signaling. A though experiment might be the games of poker versus bridge on explicit vs implicit signaling / coordination.

mistermann
0 replies
4h13m

If we were actually serious here, we could introduce a variety of ideas into this conversation that would provide very interesting insight into what is going on in this thread, and in the realms surrounding these allegations...just one of them is this:

https://en.m.wikipedia.org/wiki/Closed-world_assumption

It would be fun if this fellow's initiative actually got some traction, and attention, and then out of the blue they launched a new educational section of their website to assist the public (and journalists...or not) in their thinking on such matters.

I suspect these giant retailers have a risk department, and at least some people in that department would be able to recognize that which the general public and participants in this thread lack the ability to recognize.

hluska
0 replies
4h7m

Can you put a link to the story about the Stats Canada manager? There was a story a few years ago about a Stats Canada employee who could not reproduce a model because of confidentiality reasons within CRA, but certainly you wouldn’t be getting confidentiality and privacy mixed up with competence. Can you put up a link?

glitchc
1 replies
13h13m

Canadian economics departments are full of really smart economists. They are happy to help.

The appropriate incentive is lacking.

chii
0 replies
10h35m

it should be easy to make good incentives - the analysts that produce the evidence can be awarded a (large?) portion of the fines levied to those companies that are colluding.

Just like how the SEC whistleblower laws will awarded part of the fines to those who they reported.

lupusreal
0 replies
4h53m

The market is an oligopoly so you have 10-15 store chains.

Not that prices aren't consistent across a chain, individual stores in one chain will have different prices, calibrated to local supply and demand. In many cases they'll also have local products that aren't in most of the stores in that chain. I think you have to track prices in each and every store, not just per chain.

Still, I think you're right about this fitting in memory. This isn't "big data".

ajb
0 replies
11h57m

Famously , academics analysis found (virtually proved) share options manipulation by statistical analysis alone, which was a bombshell in the tech industry a decade ago, threatening many executives with imprisonment. However , it's not obvious how you could employ the same process here. with share options there was a liquid market as a source of external information.

the_cat_kittles
0 replies
20h24m

never underestimate a nerd with moral high ground

__MatrixMan__
5 replies
15h48m

Is it necessary to prove it? I think it's sufficient to come up with an unbiased metric for which players are the most likely to be colluding at any given time. That would be a starting point for encouraging them to behave such that they're obviously not colluding: compete louder please, or you'll be at the top of this list.

huitzitziltzin
3 replies
15h8m

Well… what do you want to happen ?

You can publish some correlations between prices. (Remember there is no known method where you can look at a time series of prices across stores and say “that’s collusion!”). And hey if you have 10,000 - 100,000 products per store you probably have correlations as high as you want. None of that will actually show collusion or more importantly suggest a policy response.

Even very high correlation _within a category_ across stores isn’t going to do that. Say you find price movements in tomato paste across all N chains are 0.95… ok now what? There are 10,000 or 2,000 product categories so you found a high correlation in one of them what do you want to do about it?

__MatrixMan__
2 replies
13h42m

I think there are a lot of people in desperate situations who feel like the deck is stacked against them. They end up lashing out in completely irrational, often violent ways. You see them on the news all the time.

What I want to happen is for those people to realize that they're not alone, and that the whole world is not working to put them at a disadvantage. Really, it's a rather small group of people who are setting the rest of us up to be rats in a maze with no exit. Then I want us to find those people, and go after their bottom line. Nothing violent, just like... welding the doors shut on opening day, that sort of thing.

It might be less rational than something more restrained like getting a law degree and working in the system to bring them to actual justice. But it has... a glimmer of rationality. You're no longer an insane lone wolf lashing out against an impossible situation... now you're a shitty activist, and even if you're not acting with a cohort, you know that cohort is out there. You're not stuck, you're not alone, there's a path forward--you can aspire towards being a less shitty activist.

But it requires a justifiable target, a representative of the untenable situation. A list of potential enemies that's far less than everybody. Once that list exists, I want companies to compete to not appear on that list.

Markets work without being rational, as does evolution (some predation required). This would be the same.

hluska
1 replies
4h0m

Yes, I’m sure that welding the doors shut on opening day will really stick it to the man. It certainly won’t horrify the minimum wage employees who go in there to work.

What an unbelievably stupid thing to advocate for, much less under the guise of non violence.

__MatrixMan__
0 replies
3h10m

Of course there are a million better ways. You could gather some money an pay the employees to strike, for instance. It should depend very heavily on your target. My point is just that if companies are organizing against you, you should organize against the companies. Symmetry. Deterrence. Doing it well... well that's a life's work. The goal is to get the ball rolling and incrementally improve, not expect people to become Ghandi overnight. And at the outset, the credibility of the threat you can present is more important than the direct applicability of your action. We're not even at the point where "how strong of an action is warranted?" is a conversation. So step one is starting that conversation.

hluska
0 replies
4h1m

The problem is that you can only analyze pricing at the retail level. At the retail level, prices can legally be set in any number of ways. For example, it is totally legal to walk into a competitor’s store and set your prices accordingly.

That’s all this metric will show.

It also won’t show supply chain issues that make the Canadian grocery industry look the way it does. As an example, buy 100 head of cattle in western Canada and get the beef into a store. Are you having any luck finding a place to process it?

the_cat_kittles
4 replies
20h22m

isnt the difference that when you have an open dataset, you get many many more eyeballs, and some very passionate ones. and they can make it their hobby, unconstrained by day to day needs of a job. eh?

huitzitziltzin
3 replies
17h35m

No. They have to know what they are doing.

Also imagine the false discovery rate of <whatever analysis you think you can do> with the thousands of products which exist in a grocery store!

“Ah look we found collusion in salty snacks between weeks 38 and 45 of 2022 in stores 1, 5 and 13!”

Even if you knew what analysis to do (and you don’t) you are going to end up crying wolf a million times and solving no problem at all.

Again - a worthy effort but the methods just don’t exist.

the_cat_kittles
0 replies
16h57m

ok. i believe you, but hope that your maybe a bit overly pessimistic

mistermann
0 replies
5h5m

Even if you knew what analysis to do (and you don’t) you are going to end up crying wolf a million times and solving no problem at all.

Mocking the epistemic skills of others while engaging in literal soothsaying (stating facts about future events) shows how culturally conditioned North Americans have become regarding government wrong doing.

I don't expect these people to be successful in their primary goal, but an enticing second order effect is it could accidentally catalyze public interest in epistemology, logic, rhetoric, the nature of Human culture and cognition, and a variety of the other things that keep commoners locked in a sophisticated virtual reality without their awareness (in any sophisticated manner at least). Now that would make this whole game a lot more interesting, because it applies to everything.

MichaelZuo
0 replies
16h15m

You get the top 100 most plausible hunches and then investigate further from there… why focus on proving something in the data itself?

Investigators work on hunches just fine if you pay them enough.

jfil
3 replies
21h10m

Hey man, I'm just creating the hammer - you can throw it in the lake, make a treehouse for your kid, smash a window, up to you :-D

zxexz
0 replies
13h8m

In retail (or any market with elastic pricing, not sure if I'm using that term correctly), collusion is really hard to gain hard evidence (evidence that will hold up in court) using data alone. You need to use the data as a tool for on-the-ground and in-depth qualitative analysis. I would not be surprised if this holds "even more true" for consumer goods like this than it does for other, highly regulated fields like finance and healthcare. I personally like the idea of focusing on an individual good or category of item, and seeing if you can find similar patterns, in other goods.

huitzitziltzin
0 replies
17h28m

Assuming you’re the author (and again this is a nice idea!) there is a paper you should check out.

This paper:

https://www.aeaweb.org/articles?id=10.1257/aer.20170116

Is the best case scenario (=easiest) for the exercise you want to do and will illustrate what is hard about the grocery case. In the paper there is:

- One product

- one clearly isolated market.

- four or five firms.

- A clear mechanism for collusion (a government price sharing website).

Even then there is no statistical or econometric test out of the box which “shows collusion”. It’s a great paper (both in my opinion and that’s why it got into AER) but there is nothing they do that says “hey here’s collusion based on this t-stat.”

The grocery case (overlapping markets, thousands of products, many firms) is vastly, vastly harder.

huitzitziltzin
0 replies
14h58m

Actually I’m going to add to your reading list:

“ A Study of Cartel Stability: The Joint Executive Committee, 1880-1886” By Rob Porter (northwestern)

That paper is a classic and I hope porter gets the Nobel prize for the work he has done.

In that paper, we actually know for sure that there was collusion. Porter is trying to assess how hard it was to sustain collusion using the data. (One thing you are not crediting in your website is that collusion is hard to sustain bc all of the colluders have the incentive to cheat!) It takes a lot of assumptions and serious econometric chops to make the analysis credible.

That paper is 40 years old but what you’re really trying to do with your project is called “structural industrial organization.” It’s been around in the economics literature for a long time. It’s my field. It’s hard.

If you want a recent overview which still won’t answer the question the way you wanted to, get “the handbook of industrial organization” edited by hortacsu et al, or the book draft “empirical methods in industrial organization” by aguirregabiria (who is at U Toronto!) or “quantitative techniques for competition and antitrust” by Davis and Garcés.

Good luck.

transcriptase
0 replies
14h46m

Yeah we have a competition bureau that’s known for never doing its actual job.

The fact that they keep approving mergers and acquisitions in telecom, banking, and groceries despite those being some of the most comically oligopoly-esque industries within a country on earth shows just how tragically wrong you are.

If there was 2 telecom companies left standing in Canada, our competition bureau would pretend to study their desire to merge for a year before approving it, under the condition that their collection of subsidiary brands pretend to be different companies while advertising.

tazu
0 replies
12h45m

~ an actual antitrust guy

So, unfirable? Essentially useless and beholden to little if any performance metrics?

patcon
0 replies
1h26m

You can do economic analysis of pricing data, and especially the interaction/correlation of multiple streams of prices across time

Would this be the sort of analysis that measured transfer entropy or granger causality?

kwar13
0 replies
10h11m

Nice try, Loblaws.

ActionHank
0 replies
4h34m

They're still trying to resolve the bread price fixing from years before the pandemic.

The agency is likely underfunded, understaffed, and disincentivized from actually fixing the issues which are so pervasive across the country that it's just business as usual for most people..

fallingknife
28 replies
1d1h

Why on earth are people and government stooges suddenly targeting grocery stores for collusion and price gouging? If there is an industry with a lower profit margin, I'm not aware of it.

aga98mtl
13 replies
1d1h

I believe it is an elaborate psyop to shift the blame of inflation away from the government and toward a boogeyman, the "evil" grocery chains. As you point out the margins are super tight in food retail, it is impossible for it to be the cause of inflation.

From the point of view of the average man however, the grocery store is exactly where he is facing inflation daily! This makes it the ideal scapegoat.

The average man will never ever realize that the monetary mass surged during covid while real world production slowed down. More dollars chasing fewer goods & services equals rising prices. That monetary policy smoothed out the COVID downturn and it was a great success, but it was not a free lunch.

ziddoap
7 replies
1d1h

I believe it is an elaborate psyop to shift the blame of inflation away from the government and toward a boogeyman, the "evil" grocery chains

In Canada, the grocery stores were caught colluding. Recently. Is it still a "boogeyman" when they were caught in a 15 year long collusion scheme?

whycome
1 replies
23h41m

Recently??

ziddoap
0 replies
22h59m

Yes.

Investigation started in 2017 and there was a guilty plea and $50M fine issued in 2023.

arcbyte
1 replies
1d

Yes, it's still a boogeyman. The bread price increases still amounted to only an extra 1.50 per load of bread over the 15 year period.

For reference, a dozen eggs shot up by a 1.50 since 2022 alone.

Go after the collusion yes but that's not where inflation is coming from.

ziddoap
0 replies
1d

Go after the collusion yes but that's not where inflation is coming from.

The title of the article is "reduce collusion in the Canadian grocery sector", not "blame grocery for inflation".

Ctrl+f for inflation in the article doesn't even turn up a result.

CodeWriter23
1 replies
1d

What does “caught colluding” mean? If it is some of Trudeau’s stooges said so, I would not believe it for a second.

gruez
0 replies
1d

As mentioned in the government report linked in the OP[1], grocery profits have only went up 1-2 percentage points. It's totally fair and justified to attribute that to evil grocery stores, but the rhetoric coming from politicians, journalists, or voters? Or is it something less nuanced like "greed grocery stores are driving inflation"?

[1] https://competition-bureau.canada.ca/how-we-foster-competiti...

fallingknife
1 replies
1d

Isn't it funny how large companies always get greedy at exactly the same time governments print a lot of money?

dennis_jeeves2
0 replies
23h37m

Or when there is a govt scandal terrorists strike...

dopylitty
0 replies
23h22m

Inflation is caused by companies deciding to raise prices. It has nothing to do with government. Whether there's more or less money out there it's still the decision of the people running the company to raise prices or not.

"Inflation" is really the magical bogeyman invented to make people not ask questions about the companies actually raising prices and to instead think everything is controlled by the government. Pay no attention to the CEO and shareholders on their yachts.

dennis_jeeves2
0 replies
23h40m

The average man will never ever realize that the monetary mass surged during covid while real world production slowed down.

To add insult to injury, the average Canadian will still brags how effective the COV lockdowns were compared to rest of the world especially big brother USA.

Fervicus
0 replies
20h43m

And Canada is already lowering interest rates.

ziddoap
10 replies
1d1h

Well, one reason is that Canada had a ~15 year bread price-fixing scandal come to light somewhat recently.

And the same people that colluded on bread just so happen to sell other grocery goods. Some people think: "hey, maybe we should check out the other stuff they sell". Which seems reasonable to me.

https://en.wikipedia.org/wiki/Bread_price-fixing_in_Canada

From an anecdotal standpoint, when many of the groceries I buy seem to have gone up in price at a rate well outpacing inflation, I can't help but wonder what the hell is going on.

arcticbull
9 replies
1d1h

Sure, but even during the price fixing period Loblaws' profit margin was sub-5%, and currently sits a 3.3%.

Yes, it obviously shouldn't have happened, but there's no piñata of profit just waiting to be smashed apart that would magically drop grocery bills.

ziddoap
4 replies
1d

That's overall profit margin, right?

So they can collude on just a few essentials, like I don't know... Bread maybe? And make an absolute killing on bread and mask those profits by claiming that their overall profits are down?

gruez
3 replies
1d

So they can collude on just a few essentials, like I don't know... Bread maybe? And make an absolute killing on bread and mask those profits by claiming that their overall profits are down?

1. If they actually want to make a profit, surely it'd make sense to price fix some high value/volume item rather than something cheap like bread? If anything choosing to price fix bread seems more like incompetence than evil villainy.

2. The parent specifically acknowledges that price fixing isn't okay, but his contention is that overall margins is still low. Who cares if margins for a certain item is high? Are you also upset that mcdonalds make orders of magnitude higher margin on soda than burgers?

ziddoap
2 replies
1d

If they actually want to make a profit, surely it'd make sense to price fix some value/volume item rather than something cheap like bread?

Weird that they price-fixed bread for so long then. If it wasn't for profit, was it just for pure hatred of poor people or what?

If anything choosing to price fix bread seems more like incompetence than evil villainy.

I don't buy "incompetence" as an excuse for a 15-year price-fixing scheme.

Who cares if margins for a certain item is high?

Who cares if margins across the board are low?

Are you also upset that mcdonalds make orders of magnitude higher margin on soda than burgers?

I'm upset that there is a history of collusion in the pricing of the food I have to buy to live. I support efforts to make sure more collusion is not happening.

gruez
1 replies
1d

I don't buy "incompetence" as an excuse for multiple vendors colluding on prices.

I'm not sure why you're going so hard on this strawman. At no point did I argue it was okay to price fix. In fact in my previous comment I was pointing out specifically that it wasn't okay.

Who cares if margins across the board are low?

I'm upset that there is a history of collusion in the pricing of the food I have to buy to live. I support efforts to make sure more collusion is not happening.

Your original claim was "many of the groceries I buy seem to have gone up in price at a rate well outpacing inflation". arcticbull's response was that grocery store margins have stayed low. That seems like a perfectly reasonable response to your claim. You also mentioned bread price fixing, but I don't think anyone is claiming "well their margins are low so price fixing doesn't exist". It's clear that he was addressing your point about overall grocery prices. In that context looking at overall inflation makes more sense than pointing out one specific item has high margins. More to the point, inflation is derived from the price changes from a basket of items. It's therefore almost guaranteed that there's going to be items that will rise higher than inflation. The mere fact that some prices are rising faster than inflation isn't evidence of collusion or price fixing.

ziddoap
0 replies
1d

I'm not sure why you're going so hard on this strawman.

You literally said: "choosing to price fix bread seems more like incompetence than evil villainy"

Replying to that is a strawman? Okay.

derefr
3 replies
1d

The profit margin figure cited for grocers is the margin on their "main business" — i.e. revenue on grocery goods sold minus cost of grocery goods from suppliers.

But this ignores other ways grocers make money (at much higher margin) — e.g. by charging their suppliers for shelf space/positioning.

mostly_harmless
1 replies
1d

It also ignores that they often own the suppliers. "Woops, our supplies raised the price, so we need to too."

arcticbull
0 replies
23h49m

George Weston Limited, the top-level entity that owns Loblaws and all subsidiaries has an even lower margin, at 2.9%. This should account for the entire umbrella of ownership, I believe.

arcticbull
0 replies
1d

No that's their total net profit margin as reported in the earnings statements.

stefan_
0 replies
1d1h

Because one thing has nothing to do with the other? US school buses look like 1950s fossils, but it's not because their makers are swimming in money.

gruez
0 replies
1d1h

cynical take: grocery prices are more salient to consumers because they see it every week, therefore governments target them to score political points with voters.

That said, one of the government reports linked in the article[1] does mention that profit margins have edged up slightly, albeit on the order of 1-2 percentage points.

[1] https://competition-bureau.canada.ca/how-we-foster-competiti...

contagiousflow
0 replies
1d1h

Are you Canadian or aware of the history of Canadian grocery chains?

juujian
21 replies
1d1h

I'm sure there is a theory of how this would reduce prices - what is it? Real estate markets became infinitely more transparent over the last couple of years, to the extent that the data is used to train data scientist. The result? Speculators entered the market at it's messed up.

juliend2
12 replies
1d1h

Good point. But is there an oligopoly in the Canadian real estate market though?

I assume the premise of Project Hammer is that transparency applied on the food industry would underline some collusion and invite for a debate on whether there's some legislation to apply against such an oligopoly.

nickff
9 replies
1d1h

What would demonstrate collusion? Very similar prices could be a sign of close competition, and razor-thin margins. Varying prices could also be a sign of close competition, with grocers choosing loss-leaders to lure customers into the store.

cycomanic
8 replies
23h24m

Look at the data for Austria presented in the link in the article. Supermarkets raised and lowered prices on the same day to the exact same amount and lots of other pretty damning evidence.

Reason077
5 replies
22h36m

Supermarkets often publish upcoming sale prices in advance, and matching your competitor’s prices is not collusion. On the contrary, it’s a sign of healthy competition!

If supermarkets are getting together and forming handshake agreements like “we will not change prices between November and February”, like Canadian supermarkets apparently did, then that could constitute collusion.

abdullahkhalids
4 replies
21h55m

Lowering prices together makes sense. But why would you raise your prices of a commodity product to match your competitor's? If they are going to raise, you hold and rake in the extra sales.

kaibee
2 replies
21h23m

Do people really go comparison shop between stores? Like, I recognize that I'm coming from a more privileged economic position to not do so, but I still go to the cheap grocery store because it's the closest to me.

I'd imagine that even for low-income people, it's the cost/benefit of comparison shopping has been squeezed out by how much prices change on a day-to-day basis. Like sure, if you're buying a lot of something all at once it might make sense to do on that occasion, but once you do that a few times you either learn:

1. Which store usually has the lowest price (and if they have coupons for store X, they might just only go there, because... they can't use the coupon at the competitor's)

2. The difference in price doesn't offset the time-cost of going to multiple stores (and the consolidation of stores means that going to two different stores will take even more travel time).

So, if most people aren't really doing comparison shopping anyway, then you make more money by matching your prices to your competition.

adamomada
0 replies
20h45m

Some people do, based on what I hear from my parents. It could be that seniors have more free time and are more astounded by higher food prices that the spend their time shopping at multiple supermarkets to get everything they want at low(er) cost.

Of course the time it takes to do this makes it all but impossible to actually save money, so it has to be a small portion of their customers.

I have heard that only something like 10% of customers actually give a shit about prices at all, and it is them who keep the prices in check for everyone else. i.e. with razor margins, the retailers can’t afford to lose that 10% customer base

abdullahkhalids
0 replies
20h44m

Why are stores changing prices so frequently if it has no impact on sales?

Yes, the vast majority of people don't comparison shop. But people do decide to not buy something if it seems it is too expensive and vice versa, and the effects are seen on the statistical level.

mercurialuser
0 replies
5h41m

Your past data shows you sell 100 apples every day, despite the cost. Then it shows that you may sell other 100 if the price is considered "low" by the clients or 30 if the price is "high". Then you know how many are in stocks, from how many days, and how many are arriving. And you fix the price accordingly

nickff
0 replies
22h40m

Those instances do look suspicious, though it’s likely that both vendors were sourcing from the same supplier and/or one was matching their competitor’s pricing. I’d be interested to see what proportion of the own-brand goods this had happened for, whether the same store was always first to raise prices, and what their supply chains looked like.

hibikir
0 replies
21h44m

It's pretty easy for things to not be actual collusion to end up looking like it, and having the very same negative effects" You don't need handshakes in backrooms.

This will be even more popular in situations like supermarkets, where a significant part of the stock has an expiration date that isn't so far from today. Turning your inventory too fast is just as bad as turning it too slowly, so there can be immediate reactions to make sure things are being consumed at just the right speed. And the more uniform the models of consumption the supermarkets are running, the more similar their decisions will be anyway.

So I wonder if we even need to focus on needing damning evidence, or on whether there is collusion, and instead aim for what we want: Dynamics that put negative pressures on prices. If we aren't seeing that, I don't care much about how much is collusion, and how much is models that have tacit agreements because, as market players optimize for what is best for them, there are solutions where high prices across the board makes all sellers win.

juujian
0 replies
20h46m

I'm afraid it might have the opposite effect - made collusion easier.

boringg
0 replies
1d1h

Is the premise that the bread scandal is just the tip of the iceberg?

saghm
3 replies
22h42m

Is speculation as much of a concern for groceries? Real estate is an asset you can hold onto for a while, but I feel like buying up groceries just means you'll have a lot of expired food pretty soon if you can't find a buyer.

saghm
0 replies
15h59m

This seems vaguely familiar now that I look at it, I must have read it (or an article on a similar phenomenon). Fair enough though, I'd be fine with a regulation like this along with stopping price collusion.

UniverseHacker
0 replies
19h41m

I'm feeling bearish on raw salmon

gruez
1 replies
1d1h

The result? Speculators entered the market at it's messed up.

That seems like a stretch. What's the casual mechanism behind increased accessibility of data driving up prices? At least with something like stocks you could blame HFT firms piling into the market or whatever. It seems far more plausible that prices rose for other reasons (take your pick of: NIMBYism, immigration, foreign investors, etc.), and the increased accessibility of data happened to coincide with the price rise (ie. similar to https://xkcd.com/925/).

kreyenborgi
0 replies
21h58m

Imagine we sell groceries. If I have real-time access to your prices, and you to mine, then I have no incentive to try to outbid you to my customers since you will see my cheap potato sale sooner than my customers will, and announce your own equivalent sale. Knowing you have access to my prices, I can also increase them safe in the knowledge that you will follow me very soon, since that means we both win. That is how sharing prices with no friction leads to less competition.

nosecreek
0 replies
4h21m

I’d be curious to hear more from OP on this as well. I’ve got my own price tracking site for Canadian groceries (http://grocerytracker.ca/) but my primary goal has been to get information in the hands of average Canadians so they can make informed buying decisions.

hobs
0 replies
1d

That's not how that worked - real estate data was always fairly public and if you had enough money it was straightforward to hoover it up - the change in approach was more about the last housing crisis and then ZIRP buoying huge tech and real estate interests to drive into home buying in the first place.

We had people who were underwater for years combined with a new market that cant afford the extremely high fixed costs and end up eventually paying rents higher than the mortgage in many principalities.

If you have a ton of capital it makes perfect sense to park it in a place where you have a guaranteed return.

motohagiography
20 replies
1d

canada's attitude toward competition is different than that of the US though. our agricultural products (dairy, wheat, maple syrup, and to a lesser extent retail beer and alcohols) are controlled by state monopolies who set prices.

the reason food is so expensive is because of fuel costs from the last few years, which were further not-helped by both an increase in federal taxes on fuel and the semi-official policy of weakening the CAD against the USD to support exports that weakens purchasing power. the effort appeals to economically illiterate constituents who support "price controls."

if you want to know where canada is on its de-kulakization spiral, the state is blaming "price gougers" for its policy failures, next are hoarders, speculators and probably "international bankers," on the list of clichés.

jfil
3 replies
21h3m

I agree with you that Canada has a very unique attitude to competition - it's "Can't we all just get along?"

Regarding food, I beg to differ. The top 3 grocers have price-fixed bread [1] (one prosecution since that article), wage-fixed [2] and have no-compete agreements for certain times of the year [3]. Food prices are not driven by underlying costs here.

1. https://www.cbc.ca/news/business/bread-price-fixing-loblaw-1... 2. https://financialpost.com/news/economy/how-hero-pay-scandal-... 3. https://www.cochranetimespost.ca/opinion/columnists/charlebo...

motohagiography
2 replies
20h40m

as per the articles, the investigation that yielded guilty pleas for price fixing was 20 years ago, the current investigation has had no results so the CBC is just narrative churning there. that the "hero pay" was coordinated hardly amounts to wage fixing unless you are litigating like a union rep.

Food prices are absolutely driven by costs, there is no other basis for them.

Loblaws is a luxury retailer with a limited set of stores and hardly counts as competitive. When someone complains about margins on certain products, ask them to explain complementary goods to you. This project is theatre for people whose understanding of economics ends at monopoly and scrooge mcduck.

richbell
0 replies
20h36m

Loblaws is a luxury retailer with a limited set of stores and hardly counts as competitive.

Uh? Loblaws is the largest or only grocery chain in many parts of Canada.

aceofspades19
0 replies
19h48m

Loblaws owns a huge variety of grocery stores in Canada and they also have a bank (President's Choice Financial) as well as large real estate holdings. There are a fair amount of places in Canada that only have a Loblaws store in the vicinity. As a Canadian, painting them as some sort of boutique luxury store is very strange to me as they have huge grocery stores and are generally considered to be on the cheaper side. You can see by this graph here: https://www.statista.com/statistics/481019/leading-grocery-r... that Loblaws is probably the biggest grocery retailer in Canada.

ActionHank
3 replies
23h35m

Wild that Costco can be orders of magnitude cheaper than the competition despite your defending of Galen's honour.

adamomada
1 replies
21h43m

This is the most laughable part, it means Costco has to be in on it too. And I can show they’re not, easily: the prices at Costco are more than the grocery chains!

They are colluding... to keep prices low

randomdata
0 replies
13h6m

I'm not sure your proof works. In the absence of collusion, you'd expect vendors selling the same thing to ultimately end up with the exact same prices. After all, why would the customer keep buying from Player B if Player A is selling the exact same thing for less? The only way Player B has any chance of finding any customers and dividing the market, without some other differentiating factor, is to sell at the same price as Player A.

If anything, Costco's higher prices is more likely to suggest collusion (but still does not imply it).

dh-g
0 replies
23h2m

I've never seen Costco be multiple orders of magnitude on any item. That would be a huge difference.

dennis_jeeves2
2 replies
23h44m

People generally get the govts they deserve. Canadians are no different. i.e blame Canadians not their overlords.

webnrrd2k
1 replies
23h31m

Can't it be both?

dennis_jeeves2
0 replies
22h0m

Well yes, it can be both. But overlords are a)universally corrupt b) they are always a minority. The overlords have their way only because the majority allow it. You will see these dynamics even in tiny groups where the minority loud/obnoxious individuals rise to power.

Focusing on the overlords is almost always a distraction on the underlying issue - that of the the electorate being too stupid, or ignorant to realize that they are being taken advantage of.

mthoms
1 replies
3h38m

Your analysis of food price increases "in the last few years" doesn't mention the worst financial crises the country has faced in (at least) 80 years and the effect it had on inflation. It also doesn't mention the record corporate profits being recorded in several sectors. The profit margin of our largest grocery chain actually increased 50% during Covid for instance.

Instead, your analysis is simply: "Government bad!"

Don't get me wrong. I'm not saying the government isn't a very large part of the problem (ie for increasing the money supply and a lot of the things you mentioned) but to try and explain what happened to food prices without even mentioning Covid, or record corporate profits, is extremely disingenuous.

But damn those "economically illiterate" serfs complaining about high prices, eh?

hollerith
0 replies
3h35m

The profit margin of our largest grocery chain actually increased 50%

That's not exactly a strong indictment: when the average margin for the industry is about 1%, all kinds of things are going to cause this or that industry participant's margin to fluctuate up or down by a factor of 50%, i.e., to go down to 0.5% or up to 2%.

It's not the same thing as Apple's margins, which last time I checked 12 years ago or so hovered around 33%, so if they went up by 50% (i.e., to 50%) it would mean something (at least if they stayed at that high for many years, which BTW you have not mentioned whether the largest grocery chain's did).

canadiantim
1 replies
17h51m

Wheat is no longer government controlled in Canada, the wheat board was sold off back in 2015 and no longer is the sole purchaser.

randomdata
0 replies
13h32m

The Canadian Wheat Board (CWB), which only ever served the prairie provinces, was sold off. The Ontario Wheat Board is still in operation (now known as Grain Farmers of Ontario) and declared an end to the single desk in 1999, which was phased out by the early 2000s.

GFO continued to run an optional pool until the 2020 crop year, but that has now also come to an end. I can't imagine anyone was still using it. It was a product of a bygone era.

surgicalcolor
0 replies
20h48m

yeah this is some ideological nonsense.

Loblaws and other companies have a lengthy history of illegal price fixing, monopolistic behaviour and other manipulative activity. Pretending that just more unregulated free market nonsense is going to help the situation is really naive.

randomdata
0 replies
13h27m

Your list isn't quite right. I produce in two of those agriculture sectors in Canada. I'm able to charge whatever price I see fit for my products, independent of anyone else producing something similar. About the only thing that comes close in the one instance, which may be what you're thinking of, is if I decide to sell my product through the government store (optional) I contractually cannot sell my product at a different price in my store – but I still get to set the price used in both places. There are no encumberments to speak of in the other case. It is about as "free market" as it gets.

At the same time, you missed eggs and poultry, which are also under supply management like dairy. If we're to be technical it the milk/egg/chicken/turkey marketing board is responsible for managing the supply and therefore prices, which is decidedly not a government entity, but the existence is granted by the government so we'll give you that one.

jessriedel
0 replies
21h7m

Yes, the US is no stranger to government influence on the prices of ag products, but my impression is that Canada is a couple notches above, especially the highly populous Ontario. Any comparison of the two needs to take that into account.

Based on a brief look by my layman eyes, it does not seem like Canadian grocery chains are vastly more concentrated relative to the US. It's hard to compare because so many of the chains are owned by the same few brands, but this chart is helpful:

https://www.howtocook.recipes/the-largest-grocery-stores-and...

I'd look at the top ten and then ignore Walgreens and CVS. I think you've got 8 conglomerates serving the vast majority of the 330M Americans. (Unclear to me whether Target should be included; I don't know how much of the sales listed there are actual groceries.) The OP article suggest 5 conglomerates serve the large majority of the 38M Canadians.

gspencley
0 replies
23h34m

Don't forget "trickle down economics." After collusion, price gougers, speculators, hoarders and bankers you always get to fall on "trickle down economics" as the convenient scapegoat.

Unless of course you're a conservative. Then it's somehow always immigration's fault.

bbarnett
0 replies
20h43m

our agricultural products (dairy, wheat, maple syrup, and to a lesser extent retail beer and alcohols) are controlled by state monopolies who set prices.

Every sane government uses taxes, to ensure food independence. A country needs farms beyond all else. The US does this on the back end, using taxes to shore up pricing. One method the US uses is "government cheese", where their federal government buys megatonnes of milk, turns it into cheese, then gives it to welfare recipients. By buying up surplus, the feds keep the price of milk up.

Canada instead regulates milk pricing via quotas.

Both methods involve keeping the price artificially high.

The US follows suit in other markets too.

a13n
19 replies
21h59m

Love this project. I just moved from Toronto, and compared to the US was frustrated by how every major industry in Canada was basically an oligopoly.

In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the big guys.

As a result, they have crazy shitty experiences. Telecoms are frustratingly expensive for cable and mobile services. Banks are dreadful and charge fees left and right, for basic things that are free in the US. Customer support with any of these companies is terrible.

I'm not surprised that they are colluding on pricing. It's quite obvious in the telecom market at least.

It seems tricky from the gov's perspective because this oligopoly/collusion behavior likely fuels higher GDP and more tax revenue... but ultimately more competition and consumer protection would make for a better country to live in.

FredPret
4 replies
21h34m

From your description it sounds as if we're stuck in a local optimum. It's tough to break out of that, but there's a lot of technological change coming our way and that tends to disrupt the status quo.

VancouverMan
2 replies
20h26m

The numerous problems that Canada is facing today are ultimately caused by government interference.

While we've certainly seen technology cause and enable change in the private sector, the public sector can basically just ignore disruptive technologies without any real consequences.

If the public sector ever did face any sort of real disruption due to technology, the public sector would likely just regulate away the technology that's causing them problems.

The situation is made worse by a big proportion of the Canadian population being heavily dependent, directly or indirectly, on large and inefficient government. This includes much of the mainstream media, in addition to the overtly government-controlled services (education, health care, policing, etc.), and government itself (politicians, bureaucrats, etc.). These people have no incentive for positive change, and actually a lot of incentive for things to get much worse than they already are.

I think it'll be a mix of economic and demographic factors that eventually result in change, rather than technological factors.

Decades of awful immigration policies have created a society in Canada that's now extremely fractured, well beyond the traditional (and mild in comparison) English/French divide that has already caused enough problems in the past.

Eventually, the already-severe economic inefficiency imposed by government will become unsustainable, and economic troubles will result in "Balkanization" occurring. It will be particularly bad in parts of Ontario and BC, where we already see this beginning to happen.

winter_blue
1 replies
2h24m

Decades of awful immigration

Care to defined "awful" here? Is this an euphemism to refer to non-European immigrants?

Canada has done very well with immigration IMO. A far more sensible and welcoming system, and most immigrants integrate and do well in Canada pretty quickly.

VancouverMan
0 replies
58m

Bringing in culturally-incompatible foreigners has certainly been a significant problem in Canada.

Bringing in low-skill, low-productivity, and often criminally-inclined foreigners (especially refugees) has also been a significant and socially-costly problem in Canada.

Bringing in foreign "students" has harmed the quality and reputation of Canada's education systems.

Bringing in adult foreigners to do the low-end, part-time jobs that Canadian high school students and university students used to do has hurt Canada economically, and resulted in atrocious service in many retail stores and restaurants.

Bringing in huge numbers of foreigners each year, while simultaneously restricting the construction of new housing, has created severe pricing distortions in the housing and rental markets. These foreigners also put immense strain on the already-insufficient transportation and health care infrastructure.

What you say about "integration" is a myth. A visit to the cities surrounding Vancouver or Toronto will make that very clear, very quickly.

Immigration has been disastrous for Canada.

squigz
0 replies
21h19m

there's a lot of technological change coming our way

Could you give some examples of some technologies that might disrupt the status quo being referred to?

jlos
3 replies
20h44m

Canada is intentionally setup to produce oligopolies as a defense against large American companies:

"Canada was, in a lot of ways, built on monopolies — think about the Hudson’s Bay Company or Canadian Pacific Rail. Canada has always feared that if we don’t let our homegrown companies get huge, we’ll get swamped by American competitors. That’s why there’s a tension between Canadian politicians, who often say they’re pro-competition, and the law, which incentivizes consolidation."

I think this strategy work well-enough until about 20 years ago. And by well enough I mean Canadian consumers weren't in an ideal situation, but things were good enough for most Canadians. Now the oligopolies have become basically predatory, gobbling up goverment funds and market capture wherever possible.

Case in point: our Temporary Foreign Worker program (who now make up 7% of the Canadian population) have not only strained housing, healthcare, and the job market it has even been called a "breeding ground for slavery" by the U.N. [1].

[0] https://www.wealthsimple.com/en-ca/magazine/canada-monopolie... [1] https://documents.un.org/doc/undoc/gen/g24/120/97/pdf/g24120...

icegreentea2
1 replies
20h6m

I don't think the temporary foreign worker program makes up 7% of the Canadian population (that'd be like 2.7 million people).

To be fair it's actually very annoying to find what the actual number is, but this study covering up to 2022 indicates that the number is probably no higher than 1 million (https://www150.statcan.gc.ca/n1/pub/36-28-0001/2023010/artic...).

daedrdev
0 replies
20h27m

Which is a self reinforcing cycle as the badly run Canadian companies need state monopolies to remain competitive

jfil
3 replies
21h11m

There's a fascinating cultural history of accepting cartels/oligopoly in Canada. I've heard it described as an "Us Against the Vast North" attitude that prevailed as the British settled Canada.

Also, I believe Canada's merger laws are very different from the USA's. We (in Canada) didn't check whether a merger is better for customers, the standard was to check whether it was good for shareholders. I believe this is changing with a modification to merger laws in the last year or two. It's slow, but change is coming.

bbarnett
2 replies
20h53m

Mergers have been challenged based upon free market competition for decades, and likely longer. Many mergers go forward with government imposed conditions.

jfil
1 replies
20h11m

Canada has something called the "Efficiencies Defence" for Mergers. My understanding is that it is used to push through harmful (to consumers) mergers by showing that the shareholders of the merging organizations benefit more than consumers are harmed. Therefore, the merger must go through. Truly twisted.

https://www.theworldlawgroup.com/membership/news/government-...

bbarnett
0 replies
15h49m

https://www.stikeman.com/en-ca/kh/canadian-ma-law/the-role-o...

What are the facts? The most important fact is that only a very small number of deals, of limited consequence to the Canadian economy, have gone ahead because of the defence.

...

Indeed, since 2009, the bureau has, we believe, cited the defence only four times (including one transaction that did not proceed in any event) as the reason for its decision not to challenge a merger. In context, roughly 3,000 transactions were reviewed in that same period.

and

https://mcmillan.ca/insights/publications/federal-court-of-a...

On August 1, 2023, the Federal Court of Appeal released its decision in Secure v Commissioner of Competition,[1] upholding the Competition Tribunal’s order requiring Secure Energy Inc. to divest 29 facilities to remedy the anti-competitive effects in 136 markets in western Canada arising from its July 2021 acquisition of Tervita Corporation.[2] It provides important guidance on the standard to be met to establish an efficiencies defense under the Competition Act.

--

Whatever website or platform you read this on, viewed this on, understand that a simple clause in an act must be interpreted by courts, and taken into consideration with all other aspects of a body of legislation. It also must be taken into account with all other case law.

While there are works to amend this act, as you can see from the links above this clause has very little real world impact.

My thoughts on this is that it is another way to gain outrage clicks, and another way to frame a democracy as failing.

rectang
2 replies
20h22m

Interesting history! For the record, it's not like telecoms aren't an oligopoly in the USA, with the attendant "crazy shitty" customer service.

xelamonster
1 replies
17h56m

Yeah I honestly can't imagine how the customer experience could possibly be much worse than what we've got in the US but their speeds are generally lower and costs significantly higher. When I visited Toronto years ago I had a consistently better data connection than my friend who lived there, and paid less for the international roaming to use it than he paid for his regular domestic data plan.

refurb
0 replies
8h45m

Canada mobile plans are far more expensive in Canada than the US.

sofixa
0 replies
5h32m

In Canada if you look at telecoms, banks, insurance, grocers, airlines, etc – there are a few major competitors and that's about it. It's very difficult to start a competitor, often for regulatory reasons, and most smaller competitors end up getting bought out by the big guys.

As a result, they have crazy shitty experiences. Telecoms are frustratingly expensive for cable and mobile services. Banks are dreadful and charge fees left and right, for basic things that are free in the US. Customer support with any of these companies is terrible.

This is funny to me from across the pond, because that's how I'd describe the US as well.

Small amount of telecoms and banks that charge exorbitant fees sounds like the US too.

High barrier to entry for physical infrastructure and banking are the reality all around the world, and for good reasons. There's more to it than that.

Fervicus
0 replies
20h59m

It seems tricky from the gov's perspective because this oligopoly/collusion behavior likely fuels higher GDP and more tax revenue... but ultimately more competition and consumer protection would make for a better country to live in.

Or because the government is working for these oligopolies and not for the people, regardless of the color of their party's logo.

ChumpGPT
0 replies
17h37m

I'm originally from Canada and I think what you failed to realize is the Oligopoly is the Gov and it doesn't matter which one is in power. Canada is controlled by a few very rich families and they basically lay out how everything is going to work. The Gov puts on a good show but as you and I have seen, nothing changes. It is all theater for the masses and none of their promises come to fruition.

There is only one way to bring true competition to the Canadian market and that is to let American Companies compete instead of barring them from Canadian markets.

If you recall during NAFTA 2, Trudeau went to great efforts to allow Rogers, Bell and Telus to be re-classified as Canadian Media Companies to protect them from the American businesses. Canadians cheered higher prices and protectionism because fuck America and fuck Trump, but in the end cut off their nose to spite their face.

Canadians deserve their high prices and lack of competition and a market that is not consumer friendly, they made that loud and clear in their support of the Liberals during NAFTA2 Negotiations.

Glad I left a long time ago....

ExPat

tomComb
15 replies
1d1h

Oh man, we really need this for telecom too. And even more important than their collusion is their political corruption, so the government protects them from competition and funnels endless billions in taxpayer money to them.

arcticbull
13 replies
1d1h

You know what actually works great for reducing the price of cell plans in Canada is a public option.

There's one province where people pay roughly half the national average for all there telecom needs - and that's Saskatchewan. SaskTel's mere existence keeps all the majors in line.

Manitobans should be absolutely up in arms over the privatization of Manitoba Telecom.

Canada has a ton of land and just not that many people. There's 3 + Videotron major telecom operators servicing a population the size of California spread out over a land area the size of the United States. The Capex and payback period for spinning up a new, competitive, national carrier is wild (there's a pile of bodies there proving my point) which makes this a perfect job for the government.

gruez
5 replies
1d1h

There's one province where people pay roughly half the national average for all there telecom needs - and that's Saskatchewan. SaskTel's mere existence keeps all the majors in line.

Source? Looking at sasktel's website and rogers' website, this claim does not pass the sniff test. Their "basic" plan is $60/month (BYOD) for 15GB of data, whereas rogers gives you 75GB for $65. Even if you don't use 15GB of data and that extra $5 brings you no benefit, the price difference is nowhere near high enough to justify the claim "people pay roughly half the national average".

gruez
1 replies
1d

I clicked through and see no time limited discount, only a $5 "automatic payments discount", whatever that means.

arcticbull
0 replies
1d

I looked again after your response, the Rogers plans all state "for new customers only" which is probably the discrepancy. Every time I speak with my parents I'm shocked how much they're paying and I have to spend an hour renegotiating.

nightowl_games
0 replies
14h52m

I live in Saskatchewan and pay ~50$ for 10GB of data/month. I'm not on a Sasktel plan, as I found a cheaper option through one of the privatized networks, however Sasktel has a new subsidiary: Lum Mobile, to compete with the cheap plans like what I'm using. I know someone who has some discount at Sasktel and pays ~50$/month for 75GB(!) of data.

When I was in toronto the guy at the hotel had a 306 (saskatchewan) phone number because it was cheaper.

Sasktel is a great provider. I have fiber to the home in my house, for instance.

Marsymars
0 replies
23h36m

A few years out of date, but the competition bureau has this review from 2019 comparing pricing between provinces: https://competition-bureau.canada.ca/how-we-foster-competiti...

My takeaway from that is that Sasktel/MTS were much cheaper for a comparable plan, but the average revenue per user is near-identical - so the effect is mostly just that Sasktel/MTS users got more data with their plans. (Which tracks to me, if you halved the revenue of a provincial-scale carrier, they'd be a huge money loser regardless of how many executive salaries got cut or efficiencies got discovered.)

TeeMassive
4 replies
23h53m

You know the collusion is bad when a government enterprise can be two times cheaper.

dfxm12
3 replies
22h25m

You seem to be implying that a public enterprise can't compete so well against private enterprise on price by definition. Why do you think this?

VancouverMan
2 replies
19h2m

In my many decades of living in Canada, I can't think of any government-run service, government-funded enterprise, or Crown corporation that offers what I'd consider to be even just mediocre service at a reasonable price.

The provincial health care systems are a total disaster in pretty much every single way in my experience, all while consuming a huge chunk of provincial government budgets each year. They're slow, the quality of care is quite poor, and any Canadian with the financial means to do so will seek care in the US or elsewhere.

The provincial public education systems usually aren't as bad as the health care systems, but they certainly aren't good for the huge sums of taxpayer money spent on them each year. Again, those who can afford some form of private education, if it's even available, will go for it.

Canada Post is certainly not cheap for the type and quality of service that's provided.

CBC produces some of the worst media and news coverage in my opinion, despite receiving well over a billion dollars of taxpayer money each year.

The police, especially in the larger cities, barely perform their duties. Petty crimes, and even some more serious ones, are often basically ignored. The court systems move at a glacial pace, sometimes with serious cases being dropped for taking too long to process.

Even the most common and simplest of bureaucratic activities, such as renewing a driver's license, renewing a health card, or renewing a passport, can routinely take several hours if done in person.

The main problem is that there's no incentive for public sector workers to be efficient, or even just to do what might be considered a minimally "good" job.

At least the private sector, even when an oligopoly exists, faces some degree of competitive pressure, however small, to improve pricing and quality.

arcticbull
1 replies
17h17m

Canada Post is certainly not cheap for the type and quality of service that's provided.

Can you pay less to send something via UPS or FedEx? I'm pretty sure you can't. Remember Purolator is a Canada Post subsidiary so probably don't count them.

VancouverMan
0 replies
1h14m

I'm not sure. But I also don't consider Canada Post to be offering comparable service to FedEx and UPS these days, too.

For example, based on my experience and the experiences of other people in Canada I've talked to, Canada Post seems to just deliver a pick-up notice slip, rather than the parcel itself.

It's particularly annoying when the recipient has been available to receive the parcel, but Canada Post doesn't even appear to make an attempt to deliver, although the slip is left behind.

The recipient then has to go down to a Canada Post outlet with the slip to actually receive the parcel.

On the other hand, FedEx, UPS, and other private sector (I, too, would exclude Purolator) couriers consistently manage to deliver parcels directly to me, right into my hands, even if it might occasionally take a second attempt. I haven't had to go to a UPS or FedEx depot in well over a decade.

In my opinion, delivering a parcel directly to the recipient is a different service than delivering the parcel to the same city and then requiring the recipient to complete the job.

mewse-hn
0 replies
1d

Manitobans should be absolutely up in arms over the privatization of Manitoba Telecom.

There are a lot of us in Manitoba who know this was a crime and we can do fuck-all to change it

Scoundreller
0 replies
1d

there's a pile of bodies there proving my point

They make great organ donors though!

(Not all were economic failures: you can also be a successful and scrappy going concern and that gets you acquired by bigger pockets with a rubber stamp from government that thinks bigger firms are better for all)

nazcan
0 replies
22h29m

Prices have come down a lot. I have reasonable plans from black Friday at like $30ish/month.

delichon
10 replies
20h55m

Say I set my apple prices at 0.5 standard deviations below the average prices I can find in the vicinity. Is that an attempt to undercut the market or collude with it?

If I set the price to the average, is that collusion or just trying to maximize my profit on apples?

If I set it higher than average, is that collusion, or me telling the market that I think I have premium apples?

How do you get from correlation to collusion? This project seems to build on an assumption that it is collusive to set prices based on other market prices, or else how could it be a hammer to bash collusion? Is it required to be ignorant of market prices when you set a price so that regulators can assume that correlation is evidence of an agreement?

seabass-labrax
7 replies
20h43m

Does that matter except as a philosophical question? The point of a free market in practice is to ensure that sale values are correlated with, and reasonably close to, production costs.

If an ostensibly free market is not producing competition which causes that to happen, it's a problem for society; then, it is society's prerogative to use whatever means appropriate to fix it. That could include, depending on the ideology of the society, loans and grants for new participants in the market, legislation that regulates pricing, specific taxation policies, or even rejecting the free market entirely and moving to central control.

By analogy, a mysterious violent crime case might need to be solved for justice to be attained, but it doesn't need to be solved in order for a society to improve and make itself safer generally.

smbullet
2 replies
20h19m

Your premise is wrong. The point of a free market is to allow supply and demand to accurately determine pricing. It is not a desired effect of the free market for production costs to always correlate or even be close to the price of goods or services. Changes in supply and/or demand can cause costs and prices to trend in opposite directions.

munificent
1 replies
19h51m

I would argue that the "point" of a free market is that it's a system where participants find it worth participating because they reach their own goals while not having to agree on what the point is with any other participant.

smbullet
0 replies
19h40m

I 100% agree but unfortunately most people outright reject the moral argument

bigthymer
1 replies
19h45m

The point of a free market in practice is to ensure that sale values are correlated with, and reasonably close to, production costs.

Some free markets result in natural monopolies so they don't always cause sales values to trend to production costs. I believe the scenario you are thinking about is "perfect competition". A free market results in perfect competition when a number of other conditions are met, including, but not limited to low barriers to entry, and lots of buyers and sellers.

seabass-labrax
0 replies
19h23m

Thank you; that's exactly the term I was looking for!

jsbg
0 replies
19h43m

The point of a free market in practice is to ensure that sale values are correlated with, and reasonably close to, production costs.

No, the point of a free market is to let the price system do its thing, and prices have nothing to do with production costs as long as they are higher. If prices appear to move in unison and that actually happens to be because of collusion, in a free market a new competitor could undercut the cartel. That's assuming that the cartel members themselves don't break the collusion, which they have every incentive to.

The long-term impact of collusion on prices is limited compared with e.g. money printing and other sources of inflation.

jjmarr
0 replies
16h52m

The point of a free market is to allocate scarce goods and services to the people that need them the most, by raising the price until demand is equal to supply. Raising price decreases demand and increases supply since more people want to sell when the price goes up.

This occurs regardless of how much competition there is.

maronato
0 replies
12h53m

Collusion is a deceitful agreement or secret cooperation between two or more parties to limit open competition by deceiving, misleading, or defrauding others of their legal right. [1] If you decide, on your own, to sell a product at a lower price than your competitors, you are doing exactly what capitalism expects from a free market.

If you call the neighboring stores and say "hey, let's all sell apples for 2x our current price so consumers don't have a choice but to buy it for that price", then you are colluding.

Your point does stand though. From the outside it's very hard to distinguish between collusion and not by mere correlation. Prices may converge for various legitimate reasons, and without insider knowledge, reliably identifying collusion is often impossible.

The best-case scenario for the project might involve comprehensively modeling a single product category to demonstrate that only collusion could explain the pricing patterns. Success would then hinge on litigation uncovering direct evidence like incriminating communications.

[1] https://en.m.wikipedia.org/wiki/Collusion

bogwog
0 replies
4h6m

This project seems to build on an assumption that it is collusive to set prices based on other market prices, or else how could it be a hammer to bash collusion?

Did you read that on the website, or are you making that assumption?

This is just a dataset, and on its own isn't going to reveal something like collusion. But if you are researching collusion, you can use this data to help you understand behaviors of businesses.

Also, collusion doesn't necessarily have to involve prices.

chaostheory
6 replies
22h31m

Isn’t the root of the problem Canadian protectionism? By law, it’s near impossible to have new (foreign) competitors in the Canadian market. Same for industries like telecom.

jfil
3 replies
20h58m

I believe one of the key issues is anaemic anti-monopoly laws and enforcement. The grocery sector in Canada is very healthy and innovative, even without foreign entrants.

It's just that any successful small chains get eaten up by the giants - "Adonis" got bought by Metro, "Farm Boy" got bought by Sobeys and "T&T" got bought by Loblaws. Any new threat gets eaten up by the big players.

tamimio
0 replies
17h23m

Interesting, I didn’t know these small ones were bought by the big ones!

slothtrop
0 replies
18h22m

Bought out is one way to put it, selling out is another. We're a nation of sell-outs.

VancouverMan
0 replies
19h33m

From what I remember of my occasional pre-acquisition visits to those chains, they certainly weren't competing on price.

Their drawing power was due to offering ethnic and/or specialty foods (Middle Eastern and Mediterranean products for Adonis, Asian products for T&T, fresh products for Farm Boy) that weren't as common at the more established supermarkets.

I remember being surprised at how expensive items generally were at those chains compared to the more established chains I tended to shop at at the time.

For a customer like me seeking low prices, those smaller chains weren't viable or practical competitors to the larger chains. I'd only end up there as a last resort, typically while travelling and facing time constraints.

Scoundreller
1 replies
21h21m

No laws against foreign grocers. Has been like shooting fish in a barrel for Wal-Mart and Costco.

But we do protect certain specific industries to our own detriment (e.g. we’ve knee-capped dairy to the point that we hardly export any, while in the free(r)-market, we export 80% of our pulse crops, 90% of our canola crop, 3rd largest wheat exporter in the world).

https://www.ecodainc.ca/pulses/

https://www.ccga.ca/advocacy/trade

https://oec.world/en/profile/bilateral-product/wheat/reporte...

As with oil, we like to export raw resources and let someone else do all the value-add elsewhere. But hey, dairy is very water intensive and it’s not like we enough of that to go around.

tamimio
5 replies
17h32m

I started with something similar a while ago but stopped as I got busy. It’s something I noticed, and I usually don’t pay much attention to grocery prices, or at least I used to. What made me pay attention was a chocolate bar I used to get for around $4. Then I didn’t buy it for a year, only to find out it’s around $7 now! I always wonder why no one speaks up about that. There are plenty of government employees who are living paycheck to paycheck, yet no one is saying a thing.

tamimio
0 replies
15h48m

Not the chocolate please!!

jfil
1 replies
16h18m

I encourage you to initiate those conversations with your friends and acquaintances. They've probably felt that something is going off the rails but might feel disheartened that no one seems to notice. The solution to this problem starts with talking to each other about the existence of the problem.

tamimio
0 replies
15h49m

Yeah, I’m guilty of not doing that, which is why I wanted to create some sort of tracker as a personal project. I even got the domain and started scraping some data too. But I agree, it should be one of the main topics that most people talk about because otherwise, it won’t change.

Fricken
0 replies
15h50m

At the 2 major chain Canadian grocery stores I regularly visit (Save-On and Superstore) prices can vary wildly every time I'm at the store. With Chocolate bars, coffee and butter the price fluctuations are especially violent.

I'm not up to date on Cocoa or Coffee bean futures, but the Canadian butter supply chain is not so unstable that the price ought to be varying from $5.50 to $8.50 on a regular basis!

I'm not even sure what kind of game it is they're trying to play. Like, what are they hoping to achieve by jerking their customers around this way?

magicalhippo
5 replies
1d

Top three grocery companies in Norway, which have almost the entire grocery market here between them, just got fined[1] for price collusion.

They'd signal rising prices for a category by rising the price on certain products within that category, was one accusation. Extensive use of price scouts aided in this.

Initially the fine was much larger, but ended up at about 450M USD total between the three.

For comparison, the larger company had roughly the same amount as profit before taxes[2] in 2023.

The recent heavy inflation in grocery prices has been far greater than what say the farmers got for the raw products.

That said, here in Norway we have a ridiculous amount of smaller, local grocery stores, rather than fewer larger ones here and there.

As I sit here, in the outskirts of Oslo, within a 15 minute walk I have 8 grocery stores, all from the top three.

[1]: https://www.nrk.no/norge/daglegvare-etterforskinga_-4_9-mill...

[2]: https://www.dn.no/handel/resultathopp-for-norgesgruppen-tjen...

acchow
2 replies
22h38m

For how many years did this collusion last? What percentage of their annual profit could be attributed to price collusion?

Norgesgruppen's 2005 annual report shows a profit margin of 2.2%. In 2021, that ballooned to 3.8%. That's almost a 75% growth in margin.

semi-extrinsic
0 replies
20h42m

Their reported profit margins are also super suspicious, TBH.

Because the grocery chains have subsidiaries that are almost always the owner of the real estate where the stores are located. So they can just set the rent cost of the store in order to get whatever profit margin they deem acceptable.

Then the real estate subsidiary turns around and spends most of their profits buying more real estate. You see it almost everywhere now, grocery subsidiaries buying up whole blocks of nice hhouses, just to demolish them and build ugly concrete cubes with yet another grocery store on ground level and stacks of tiny apartments on top.

The best thing that can be said about these buildings, is that hopefully teachers in a few decades can use them as clear examples to show children just how bad it gets when we let rent seeking MBA fuckers decide things.

magicalhippo
0 replies
22h10m

Good question. I worked for one of them around 2005, and my boss mentioned price scouts then. As I recall it he wasn't happy about them, equating it with cheating.

The allegations are that the price collusion really took off around 2010. We had had a few foreign companies trying to take hold, like ICA in 2003 and Lidl in 2004. Lidl faced a unified publicity attack by the big three, and didn't last long. ICA bought one of the then-larger chains, but couldn't make it work and gave up in 2015.

It wouldn't surprise me if the "big three" started working more closely together during the "Lidl invasion", and that that laid the foundations for further cooperation later.

jahnu
1 replies
1d

I am almost convinced this is happening here in Austria too. I have to be open to the possibility it’s just my imagination but damn it feels too suspicious at times. Haven’t seen anything in the news, however.

3eb7988a1663
4 replies
1d1h

Not sure if the author is here, but the downloadable SQLite database significantly benefits from applying compression (~75% with gzip).

Also, is there a write-up of how they collected the prices? I have wanted to do a similar analysis for years, but immediately gave up realizing I would be spending 95% of my efforts scraping and entity matching. By and large manufacturers seem to go out of their way offer unique SKUs intentionally to avoid comparisons.

IncreasePosts
2 replies
22h55m

I was going to mention that your browser almost certainly sends an Accept-Encoding: gzip header, but it appears the server doesn't care to sent a Content-Encoding: gzip back!

jfil
1 replies
21h22m

I am the author - I appreciate your comment & the parent comment. I'll make the sqlite file more manageable shortly (wasn't expecting the project to get this much attention so its taking a while to catch up with everything!)

jjkaczor
0 replies
4h40m

Thanks for creating this - I have cross-posted a link to your site/project on Reddit to "/r/loblawsisoutofcontrol"

danudey
0 replies
2h53m

With 7z compression level 9, the .sqlite archive comes down to 61 MiB, which is about a 92% file size reduction.

willvarfar
3 replies
11h24m

Here is an app idea:

Users use a smartphone app to zap the price labels on shelves in shops.

The app can provide basic price history and comparison prices etc.

Furthermore, users could organise into little community groups. The app is tracking what is a good price and what is a good shelf life etc and what is in demand and what is on specific members shopping lists etc and tells the zapper how many to buy for a common stockroom.

Of course the supermarkets will not like people wandering about their shop with an app, but they have a pretty ugly PR problem telling people they aren't allowed to use the app in their store etc?

fakedang
1 replies
11h21m

Monetization? I explored that idea before, but soon discovered it's hard to charge customers already looking to save money. Yet unfortunately, what's easier and more lucrative is selling that same data to the retailers to keep your lights on.

willvarfar
0 replies
10h2m

Perhaps this could be an unmonetized activist-programmed app.

Or, with big VC backing, in some markets you could set up a mail-out retailer that is just undercutting shelf prices. You have the data on who is buying what and how much they are paying, and you are providing the organisational glue for community group buying and stockrooms, so you could be getting into being a virtual supermarket without renting any retail space?

nosecreek
0 replies
4h24m

I’ve got a site with the price history aspect for Canadian groceries (http://grocerytracker.ca/), but the community groups/public lists idea is interesting. I definitely feel like there is a lot of potential in this space.

islewis
3 replies
20h2m

Big fan of any data aggregation projects like this, especially with such a relatable theme.

However it feel like the conclusion might be jumping the gun a bit. Instead of "Think there is collusion" -> finding the data top support the claim, maybe run the numbers first and see what they say? I think coming up with a strong position (Canadian stores are colluding) before looking at the data makes it enticing to find numbers that back up the claim, whether or not they are taken out of context.

islewis
1 replies
19h45m

Thanks for the context. I'm still not certain that an instance of collusion on the price of bread in 2015 implies wider collusion in 2024.

Ideally, the data would be proving this, but I guess my skepticism is the cost of making a claim before the research is done.

jfil
0 replies
6h40m

I'm the creator, and I think you are spot-on. It is my wish that this data will help increase competition/reduce collusion, but until others analyze it we cannot make assumptions about what prices/grocers are doing.

Marsymars
2 replies
23h30m

TBF in Canada grocery stores are also suppliers; about a quarter of sales are of private label items.

hello_computer
1 replies
17h36m

Both private-label and name-brand items are produced by 3rd-party suppliers.

Marsymars
0 replies
15h57m

Not necessarily, e.g. at various points George Weston Limited has owned commercial dairies and bakeries. They've also bought out suppliers of their private-label items after the suppliers went bankrupt due to insufficient margins.

99_00
3 replies
1d

1. Online prices are not the same as in store prices

2. No one, other than random people in messages forums, is alleging collusion or price fixing. No one at any university, not the government, not the media.

3. The government’s investigation, which many of the conspiracy theorists site as evidence, shows a lack of competition led to 1 or 2 % increase in price over 12 years, and the vast majority of the price increases was due to things like war in Ukraine, Covid restrictions, fuel prices due to energy crisis.

throwaway201606
1 replies
1d

Want to give you benefit of the doubt with regards to phrasing but tackling each of these statements as they are all factually incorrect:

1. Online prices are not the same as in store prices This depends but mostly they match ie online grocer prices in Canada are the same as in-store prices

This is because most grocers have use online prices as flyers / ads / sales pricing for stores.

Also, in Canada, because of price match policies from the grocers themselves, most grocers have to match their own online prices and, in many cases, competitor prices - this includes competitor online prices!!! including sales and flyer offers

https://blog.flipp.com/7-canadian-grocery-stores-that-price-...

Further, there is - pricing law in Canada around charging more than advertised pricing

https://competition-bureau.canada.ca/deceptive-marketing-pra...

- a pricing code of conduct: if an item is more expensive than the listed price, the consumer gets that first item for free. This means that grocers go out of their way to show the lowest correct possible price all the time everywhere.

https://competition-bureau.canada.ca/deceptive-marketing-pra...

The only exception I can think of is delivery prices where in-store pricing will not match the online pricing. But delivery is usually differentiated by completely different branding from the actual store eg Sobey's has the "Voila" brand for delivery and Metro has "metro.ca" as the delivery brand which is distinct from Metro.

2. No one, other than random people in messages forums, is alleging collusion or price fixing. No one at any university, not the government, not the media."

This is factually incorrect: grocer bread price fixing / collusion went to court and there was a $500m judgement

https://globalnews.ca/news/10642801/loblaw-bread-price-fixin...

3. The government’s investigation, which many of the conspiracy theorists site as evidence, shows a lack of competition led to 1 or 2 % increase in price over 12 years, and the vast majority of the price increases was due to things like war in Ukraine, Covid restrictions, fuel prices due to energy crisis.

Price fixing preceded all these events. In cases being investigated e.g. bread which is now resolved, the period was as far as 15 years back.

https://globalnews.ca/news/10642801/loblaw-bread-price-fixin...

99_00
0 replies
22h45m

1. Your response doesn’t seem to contradict my statement. It seems to add context. So my point #1 stands. Tracking online prices doesn’t tell us what people are paying in store.

Regarding the bread price fixing scandal, that ended 14 years ago. It ended when internal executives reported it.

The current anger and activism is over the post Covid price rise in food. No one is saying that that is due to price fixing, or collusion. Except random people in forums or fringe bloggers with phds from unknown institutions.

There is actual price fixing. But it is t the grocery stores. It’s the dairy producers. But politically they apparently aren’t a good target.

mistermann
0 replies
4h22m

No one, other than random people in messages forums, is alleging collusion or price fixing. No one at any university, not the government, not the media.

It isn't possible for you to know this.

many of the conspiracy theorists

1. People who live in glass houses should not throw stones, or so they say anyways.

2. "Many"? What percentage of the "conspiracy theorists" "are" as you describe?

and the vast majority of the price increases was due to things like war in Ukraine, Covid restrictions, fuel prices due to energy crisis

I'd like to see if the government investigators used language as loosely as you do.

1970-01-01
3 replies
1d

I read this title as "reduce collision in a Canadian grocery store" and thought this was an app for parking.

winddude
2 replies
22h40m

or shopping carts in the store, need to cut down on the number of sorries.

Scoundreller
1 replies
21h22m

No idea why people do not follow standard traffic conventions for right of way with a shopping cart (or while walking in general)

scohesc
0 replies
20h52m

It's honestly mindboggling.

You're moving a four-wheeled vehicle down an aisle, with enough room for 2, maybe 2.5 cart widths. Yet people decide to stop right in the center without considering that they might be blocking someone.

But I'm the jerk if I point it out.

People are so silly (myself included)

sys32768
2 replies
21h20m

I live 70 miles from the Canada border where we whine about Canadians crowding our Costco.

I roughly counted their plates in one section of the parking lot and about every fifth plate was from Alberta.

Edit: I have also witnessed Canadians in awe at how inexpensive was the stack of chewing tobacco they purchased.

campl3r
0 replies
16h39m

that's shocking to me. I, a European, recently spent multiple months on the west coast in the US and Canada, Canada was significantly cheaper. I'd guess West Coast prices in the US are just even more expensive? (Guessing based on them being 5-20x of german prices for basic groceries)

arcticbull
0 replies
17h20m

Edit: I have also witnessed Canadians in awe at how inexpensive was the stack of chewing tobacco they purchased.

Sin taxes vary across Canada and across the US. Even within the US the range is $6 to $12 [1] per pack of cigarettes.

In Canada [2] the range is $8.60 USD to $11.74 USD per pack.

Were they to declare on the way back as required by law, I strongly suspect it would have been cheaper to buy at home.

[1] https://worldpopulationreview.com/state-rankings/cigarette-p...

[2] https://www.statista.com/statistics/1307607/canada-regional-...

adamomada
2 replies
21h22m

There was a website a few years back that posted the prices of Brewers Retail (aka The Beer Store, single buyer of beer in Ontario) in a nicer, spreadsheet like format where you could sort by total price, price per mL, price per case size, etc etc (can’t recall the name of it at the moment). It was great. And transparent, and just data.

And were shut down by a threat of a lawsuit. Apparently you can’t do that in Canada. They had some stupid fine print that said the data was theirs and you can’t use it.

And I seem to recall similar fine print in grocery flyers.

mistermann
0 replies
4h39m

And were shut down by a threat of a lawsuit.

As is the will of people, since Canada is a democracy, and that's what democracies do. Not like those terrible communist governments. Everyone should well know what they do (and how your friendly local neighborhood democracy is so much better, you see), you can read about it in your newspaper quite literally every single day for the last several years/decades.

Threads like these are diamonds in the rough, I love collecting them.

BigFnTelly
0 replies
15h28m

beerboss.ca picked up the torch

zeckalpha
1 replies
15h49m

Are converging prices a sign of collusion, competition, or is it an orthogonal measure? My impression is price convergence is orthogonal to the collusion-competition dimension.

yieldcrv
0 replies
15h42m

1. Compile a database of historical grocery prices from top grocers’ websites.

2. Make the database available in a format that is suitable for academic analysis and for legal action.

Price discovery for any reason is good

I dont think the allegations are worth going into, the dataset should exist regardless

smeej
1 replies
1d

Doesn't making this data available also provide it to the grocers? Is it still "collusion" if they all just start raising their prices to public benchmarks on any items where they're low? They're not "working with each other" now. They're just "analyzing the publicly available data to remain competitive."

Lalabadie
0 replies
22h38m

Canadian grocers already have sophisticated price watch tools all pointed at each other and augmented by human labor.

This data set is from scraping online grocery store prices over a period of time, it's not live. It wouldn't improve grocer's price data harvesting, but it does slightly reduce the gap between what they have in hand, and what the public and press can have in hand.

jfil
0 replies
6h46m

Last year, Canada Bread paid $50mil for its role in price fixing:

https://www.cbc.ca/news/business/canada-bread-price-fixing-1...

The government hasn't taken anyone to court yet, but justice and progress is possible. We will get there by continuing to talk about this and asking fellow Canadians to reflect on the state of our society.

hodder
1 replies
1d

"Project Hammer aims to drive more competition and reduce collusion in the Canadian grocery sector."

In order to assess collusion among Canadian Grocers it is important to understand what gross margins have done, as input costs have run up materially as well. Canadian grocer margins have expanded materially, but nowhere near total food inflation costs. While groceries remain a competitive business in many countries, concentration in Canada has led to a material expansion of gross margins since the early 2010s from the low 20s to the low 30s:

https://ycharts.com/companies/LBLCF/gross_profit_margin.

This is a massive increase in gross margins no doubt, and reflects the concentration of market power in Canada, but it is also important to understand that the total food price increase is driven primarily by food itself increasing in price (COGS for grocers) and general CPI in Canada. Meaning Loblaws is driving a bigger wedge to themselves, as are other grocers, but the bigger problem is general dollar devaluation and food input costs to grocers. It is important to look at both aspects of this problem. Right now if you magically waived a wand to reduce prices by 10%, while cost of goods sold remained flat, it would basically wipe out 15 years of gross margin incease to grocers, but would barely benefit families struggling to feed themself (an extra 10 bucks per 100 spent). So yes grocers are a problem, but they arent the problem that politicians (NDP and Liberals especially) scape goat them to be. Federal fiscal and monetary policy is MUCH more likely to be the main culprit to food price increases, and most politicians should be looking in the mirror as opposed to simply blaming grocers (who are also to blame, but lets use pareto's principle here).

Date Value June 30, 2024 33.13% March 31, 2024 32.80% December 31, 2023 32.16% September 30, 2023 31.38% June 30, 2023 32.22% March 31, 2023 32.37% December 31, 2022 31.56% September 30, 2022 31.48% June 30, 2022 32.34% March 31, 2022 32.03% December 31, 2021 31.76% September 30, 2021 31.30% June 30, 2021 31.71% March 31, 2021 31.15% December 31, 2020 30.17% September 30, 2020 29.92% March 31, 2020 30.86% December 31, 2019 30.91% September 30, 2019 30.37% June 30, 2019 31.00% March 31, 2019 30.70% December 31, 2018 30.75% September 30, 2018 29.94% June 30, 2018 30.77% March 31, 2018 30.26% Date Value December 31, 2017 29.82% September 30, 2017 29.02% June 30, 2017 29.22% March 31, 2017 29.45% December 31, 2016 28.81% September 30, 2016 27.91% June 30, 2016 28.24% March 31, 2016 28.77% December 31, 2015 27.92% September 30, 2015 27.05% June 30, 2015 27.67% March 31, 2015 28.14% December 31, 2014 27.63% September 30, 2014 26.27% June 30, 2014 19.75% March 31, 2014 24.51% December 31, 2013 23.91% September 30, 2013 23.15% June 30, 2013 23.64% March 31, 2013 23.99% December 31, 2012 23.23% September 30, 2012 23.29% June 30, 2012 23.63% March 31, 2012 23.83% December 31, 2011 23.18%

dredmorbius
0 replies
3h2m

Cleaning up your table a bit:

  Date      Value 
  ----      ----- 
  
  2011 Dec   23.18%
  2012 Mar   23.83%
       Jun   23.63%
       Sep   23.29%
       Dec   23.23%
  2013 Mar   23.99%
       Jun   23.64%
       Sep   23.15%
       Dec   23.91%
  2014 Mar   24.51%
       Jun   19.75%
       Sep   26.27%
       Dec   27.63%
  2015 Mar   28.14%
       Jun   27.67%
       Sep   27.05%
       Dec   27.92%
  2016 Mar   28.77%
       Jun   28.24%
       Sep   27.91%
       Dec   28.81%
  2017 Mar   29.45%
       Jun   29.22%
       Sep   29.02%
       Dec   29.82%
  2018 Mar   30.26%
       Jun   30.77%
       Sep   29.94%
       Dec   30.75%
  2019 Mar   30.70%
       Jun   31.00%
       Sep   30.37%
       Dec   30.91%
  2020 Mar   30.86%
       Jun      n/a
       Sep   29.92%
       Dec   30.17%
  2021 Mar   31.15%
       Jun   31.71%
       Sep   31.30%
       Dec   31.76%
  2022 Mar   32.03%
       Jun   32.34%
       Sep   31.48%
       Dec   31.56%
  2023 Mar   32.37%
       Jun   32.22%
       Sep   31.38%
       Dec   32.16%
  2024 Mar   32.80%
       Jun   33.13%

glitchc
1 replies
13h14m

Heck, I had totally forgotten that IGA and A&P used to exist.

xp84
0 replies
12h16m

If Canada is anything like the U.S. the snag I think you'll hit in establishing answers to questions like "what does this pound of butter cost at X chain" is that supermarkets now play so many games with pricing that there isn't one answer!

1. Prices may be regionally or locally varying based on, I assume, either inventory management needs or their idea of what people in one area will tolerate.

2. Pricing gimmicks. At my local supermarket, a standard bag of potato chips is $6.99 or so, but during some phases of the moon it becomes "$1.99 WHEN YOU BUY 4." Other products, a lot of packaged goods, go on sale in bundles: An item that may be $4.99 will be "$1.99 WHEN YOU BUY 5" participating products which may be chosen from certain unrelated stuff, like crackers, Tide, and Pillsbury biscuits. It's up to you to scrutinize the circular, the shelves don't always enumerate the eligible products. And finally, the best one, the "with digital coupon" prices. All you have to do is get on a sluggish app in terrible cell service, get properly signed in (oh, be sure to check your email because we needed to send you a 'security code') and locate and 'clip' the coupon and then you get a sale price. If you forget to do that you'll pay full price.

So in the above situations I'm concerned what kind of data integrity one would get because different consumers will pay different amounts. For instance, not everyone has room to transport 4 bags of chips home, so they may end up spending $7 for 1 instead of $8 for 4. Therefore the chips are simultaneously $2 and $7.

winddude
0 replies
22h42m

Interesting idea, I'm also in Canada, I briefly looked at extracting grocery store price info, don't forget that prices from the same retailer can vary greatly by geo and even locations. Also several stores, in store prices don't match online prices (costco is the obvious example, but nearly every store has in store exclusives that don't hit online advertising).

scotty79
0 replies
21h7m

Publishing catalogue of prices of the products you sell should be mandatory condition to be able to do any selling.

scottmsul
0 replies
6h3m

Suppose all the groceries raised the price of item X by exactly the same percent Y on the same day. At first glance this would look like perfect collusion in the data. But how do you know it wasn't just the supplier price going up by Y percent?

rekabis
0 replies
14m

I have been wanting to do something similar to this for years now, in terms of long-term price appreciation against inflation and shrinkflation.

Unfortunately, this would have required product data and in-store price data going back decades. And done likely against the wishes of grocery chains, which would have required volunteers to go in and surreptitiously record prices across the country, not something easily doable without a modern smartphone.

openrisk
0 replies
7h29m

You will need a Project Mjölnir for that, as the real ideology, moral stance and practice of our era is that competition is for losers. Or: Those who can't collude, compete.

nightowl_games
0 replies
14h49m

https://en.wikipedia.org/wiki/Federated_Co-operatives

They are not a private company, they run the store as a member owned cooperative. I'm a member, for instance. I have a number and get a discount and some cash back at the end of the year.

If this theory of collusion is true, the coop should be cheaper then right? It's not! Loblaws is typically the cheapest.

lushdogg
0 replies
1d

Email sent.

kinnth
0 replies
6h37m

This would be useful in all retail sectors. Things like DIY tools or raw materials along with components or chemicals. Most components or parts such as Graphics Cards already have strong price competition as you can buy it and get it shipped from anywhere.

It is usually the local, raw materials where collusion is strongest.

iambateman
0 replies
3h14m

A lot of people are mentioning how hard collusion is to prove.

Perhaps the government should offer a $500,000 incentive to anyone offering information which demonstrates collusion of a sufficient size.

If consumers are getting systematically ripped off at a scale of many billions of dollars, it seems like we should try to just buy that information rather than pay a few dozen Ph.D’s to build models which demonstrate collusion.

Knowing that employees are one email away from the biggest payday of their lives would have a deterrent effect on executive behavior, too.

constantlm
0 replies
19h21m

This could be useful for New Zealand too, where things are even worse and a duopoly effectively controls the whole market. Might put this on my ever-growing list of projects I want to do.

andrew_
0 replies
18h16m

Was just in Canada recently and despite the favorable exchange rate, I couldn't believe how expensive groceries were compared to the states. Everything from juice to eggs to bread to meat was 1.5 - 2x the cost back home.

acyou
0 replies
15h37m

Isn't coordinated price setting across a wide range of interchangeable commodities with elastic demand curves a particularly efficient form of price discovery?

What would be a better mechanism of price discovery for such a group of commodities?

I have never viewed an ad match policy with suspicion. Real assets, on the other hand...

Love the data collection project, suspect the foregone conclusion. If we're so convinced already, data may not change anything.

SG-
0 replies
20h38m

i like this but it's only tracking price changes for the final sale price. there's so much movement in grocery stores when it comes to supplier and product costs that will show the whole picture.

you'd have to have someone who has access to the internal systems that could also track the profit on each item and track that.

Reason077
0 replies
22h43m

“It is an industry practice to have a price freeze from Nov. 1 to Feb. 5 for all private label and national brand grocery products, and this will be the case in all Metro outlets.”

Sounds like Metro just admitted to illegal price collusion to me. If this isn’t illegal in Canada, perhaps the law is the problem?

486sx33
0 replies
18h41m

It’s pretty simple 1. Land area is huge in Canada, you can’t build a startup distribution network at scale and be efficient (ask target) 2. Interprovincial trade barriers 3. Everything has to have the French language printed on it - even if the closest supplier to Alberta is Montana, you can’t just import stuff without different inspection and packaging. This centralizes everything imported in Canada to things like the Toronto distribution center of which most foodstuffs only increase in cost the further across Canada from Toronto you get 4. Smaller grocery stores have tried, and the reasons above, plus the massive amounts of corporate welfare that companies like sobeys and loblaws get make the market unbalanced and unfriendly to competition.