Shelf life: Where Canada's grocery industry is headed next

After a year of rising operating costs, unstable food prices and consumer price sensitivity, the grocery industry is bracing for another period of change. In a recent conversation with Canadian Grocer, Sylvain Charlebois, Dalhousie University professor and director of the Agri-Food Analytics Lab, shared his take on what’s next for Canada’s grocery industry—from the forces shaping food prices to evolving consumer habits and where grocers can find new opportunities in 2026. This interview has been edited for clarity and length.

Sum up the current health of Canada’s grocery sector.

I think it's actually good; the sector is in a healthy spot. I would say the consumers is engaged. I mean if you look at financial results, you can see  the "Big Five" are doing well ... we are seeing a consumer that is more careful with their budget and obviously I think it points to how well grocers have adapted. They've adapted quite quickly.  I'm thinking of Metro with Super C, of course Loblaws with Maxine in Quebec and No Frills. Costco just bought land in Laval and I think they're up to 110 stores now. You can see everyone is adapting to a different marketplace.

What key factors do you think will influence food prices in 2026?

My concern is the AI bubble affecting the market. If that explodes, it skews confidence with investors. And if the burst resembles the dot-com bubble of 1999-2000, it could impact many aspects of the market, including the dollar, energy costs and commodity prices. Right now, commodity prices are under control, but if something happens to that AI bubble, input costs may increase and that could impact inflation overall. I believe a lot of grocers are concerned about that.

Also, the crossover between retail and [food] service—I think grocers will play with that. People are concerned about expenses and staying home a little more. I’m not sure why we’re not hearing more about that grocerant phenomenon. I think the ready-to-eat counter and all other aspects of ready-to-eat consumption is going to be an interesting opportunity for grocers.

Beyond the penchant for dining at home, how is consumer behaviour evolving?

People are spending more per capita at the grocery store compared to last year or two years ago when the amount had been declining. During that period of rapid immigration and population growth, per capita food expenditure was dropping. But, it’s on the rise again, which is good news for grocers. So, there are tremendous opportunities there for sure.

Such as?

We’ve seen an explosion of frozen food sales in the U.S., but not in Canada. I think this will change. I think grocers will start to invest more in frozen foods over the next couple of years, because the stigma around frozen is starting to change—much like it has with private label, for example.

Moving on to the grocery code of conduct. What measurable outcomes would prove it is, in fact, working?

I’ll be looking for variety in stores and, of course, price stability or food inflation stability ... If we start to see market swings again, I’d say that’s probably one measurable thing we need to look at.

Which consumer trends from the past year are likely to remain in 2026?

Protein is a big one. When it comes to consumers, grocers will need to think differently about proteins because prices are going up, and obviously you need to adapt appropriately. We are expecting beef prices to remain quite high and chicken prices are going up as well. And so, how do you support a consumer who is slowly becoming a protein orphan?

Do loyalty programs offer real value or just collect data?

Loyalty program literacy is going to be a challenge for years to come. I don’t think people understand how loyalty programs can make a difference in their lives. I expect grocers will get a little more aggressive in teaching or influencing consumers in terms of how they can benefit from their loyalty programs in general.

Is it a lack of education or a lack of relevant offers?

It’s about information. It’s showing people how much money they can save or what they can do with their points, for example, and keeping consumers as engaged as possible.

What will Canada’s grocery landscape look like three years from now?

I assume Trump will still be in power and there’s probably going to be a reorientation of supply chains towards national interests and local procurement. Our national ingredient ecosystem is weak right now. But, three years from now, I see a stronger ecosystem that will allow, say, the President’s Choice brand to source more local ingredients than before. So, moving from ‘Products Made in Canada’ to ‘Products of Canada.’ 

This article appeared in Canadian Grocer's December 2025/January 2026 issue.