During the last week of September (2023), I did a survey of the seven main stores that serve Huntsville, Ontario (No-Frills Orrilia was included to provide a bigger number of comparisons). I also looked at Costco’s online pricing.

The stores I checked were Dollarama, Freshco (Sobeys), Independent (Loblaws), Metro, No Frills (Loblaws), and Walmart.

Dollarama and Shoppers Drug Mart (Loblaws) should be considered ‘convenience stores’ as they only offer a relatively limited selection of products.

Above: Metro cheeses

I started with a list of one hundred grocery products but quickly realized that was too many and unnecessary for the purpose of the survey.

First, I went to Dollarama and selected the 35 products that they stocked which were on my list. Dollarama does not stock any refrigerated or dairy products.

Second, I visited Freshco and Shoppers Drug Mart as they do not post their prices online.

Third, I filled out online grocery carts for Costco, Independent, Metro, No Frills and Walmart.

All prices shown are their regular retail prices unless otherwise noted.

The most significant difference in pricing for the 30 items on my shopping list was $75.70 at Dollarama compared to $150.75 at Shoppers Drug Mart, an eye-watering difference of 100%. Recognizing that for grocery purchases both Dollarama and Shoppers Drug Mart can be considered ‘convenience stores’ this was an apples-to-apples comparison.

The next group includes Walmart ($94.86), No Frills ($98.86) and Freshco ($103.69).

Like Shoppers Drug Mart, Costco deserves a mention of its own. To be as objective as possible in making comparisons to the other stores, I calculated Costco’s price by taking their ‘bulk’ price and converting it to equivalent smaller units.

Similar to Dollarama, Costco stocks a limited range of grocery products which necessitated reducing the shopping cart further, to 21 different products.

For example, Costco sells French’s Yellow Mustard in 2 x 830 ml. squeeze bottles, a total of 1,630 ml, for $9.99, online. Dollarama sells French’s mustard in a 250 ml. squeeze bottle for $1.50. So, I applied the following formula to arrive at an equivalent 250 ml. price: 1,630 gm / $9.99 x 250 gm = $2.72, which makes the Costco online price 74% higher than Dollarama, and more expensive even than Shoppers Drug Mart! Note: Costco does offer free shipping on orders of $75 or more but also adds a ‘grocery surcharge’ of $3 on each product on orders of less than $75 plus a “Costco Grocery Surcharge”. For example (see below) seven 2-packs of French’s Mustard in a Costco store costs $48.93; the same order online costs $90.93, a $42 difference!

How about Spam Luncheon Meat? Costco sells three 340 gm tins for $14.49, or $4.83. Compare this with the other food stores:
Walmart $3.97
No-Frills $4.49
Freshco $5.49 (on sale for $5.00)
Metro $5.49 (on sale for $4.48)
Independent $5.49
Shoppers Drug Mart $6.49

Similarly, Costco sells 48 x 45 gm. KitKat candy bars for $62.99 ($1.31 per bar). Dollarama sells 4 x 45 gm. KitKat candy bars for $3.25, ($0.81 per bar), making Costco 62% higher than Dollarama.

White vinegar Costco was double the price, table salt 45% higher, and Cheeto Puffs 104% higher.  Overall, Costco was 31% higher than Dollarama by weight/volume and you would need to spend $397.79 ( 7 times more product) compared to Dollarama’s $57.21 (Costco’s ‘equivalent price’ for the same shopping cart would be $74.87).

A few things to note as one makes comparisons:

Selection: Metro, for example, carries 24 varieties of Kraft Dressing, Walmart 23 varieties, No-Frills 21, and Dollarama 2.

Above: Dollarama selections.

Larger stores like Metro and Loblaws/Independent have in-store bakeries, butcher and seafood counters, etc.

If you want to save money, you need to be prepared to ‘shop the specials’. On a recent shopping venture, I ordered products for free pick-up (Independent, Metro and Walmart literally do the shopping for you and then they load the goods into your car – generally for free) and I did the balance of my shopping at Freshco. Overall I saved between 25%-30% on my grocery purchases. It’s a little extra effort but during the course of a year, I save approximately $4,000 per year.

WHO MAKES THE MONEY?

Politicians generally throw out the billions of dollars companies make in profits. This is generally false reasoning as a company that sells billions of dollars of products will logically make billions of dollars in profits. The important number for the consumer to understand is the percentage of net profit. For every dollar you spend on groceries, how much is being generated in profits? When a can of Spam luncheon meat can sell for as little as $3.97, or as much as $6.49, where does the $2.52 (61%) difference end up?

Let’s take a look at the profits some of the large producers and retailers make:

In 2022, the KraftHeinz Company had worldwide sales of $26.485 billion and a net pre-tax profit of $8.122 billion, an incredible margin of 31%. Such is the power of name brands and advertising.

Proctor and Gamble (P&G) had 2022 revenue of $80.2 billion and net earnings of 18.2%.

Hormel, the company that owns the SPAM brand, had sales in 2022 of $12.5 billion and earnings of 10.5%.

Loblaws Companies had 2022 revenue of $56.504 billion and a before-tax income of 10.9%.

A few years ago, I wrote a blog, Gas Prices – Fooling some of the people all of the time. I noted that “the oil companies would have you believe their profit is only 3% of the price you pay at the pump.”, which may be true but tells a distorted story, especially when you consider that a company like Suncor made a net (after tax) margin (earnings) of 17% in 2022. I also noted, “Ultimately, it is up to you, the shareholder, to let these companies know that you are willing to give up some of your dividend and RRSP income in order to have more reasonable prices at the pump.  It’s a tough choice, isn’t it?”

Is it any different in the grocery business today?