Costco voted most respected grocery retailer as Loblaws, Sobeys fall: survey

Majority of Canadians expect grocery prices to continue to rise, according to a separate poll

Kaohsiung, Taiwan- March 31, 2022: view of Costco wholesale storefront in Kaohsiung, Taiwan. Costco Wholesale Company is the largest membership warehousing club in the United States.
Canadian shoppers have chosen Costco (COST) as the most respected grocery retailer in the country. (Getty Images)

Canadian shoppers have chosen Costco (COST) as the most respected grocery retailer in the country, according to a new survey, with discount retailers rising in the rankings as Loblaw sank amid soaring food prices.

The national survey of 2,932 Canadians, conducted by Maru Public Opinion as part of the Canada's Most Respected Awards Program, found that Costco was the most respected food retailer in Canada for the second consecutive time. The survey, which asks Canadians to what degree they respected certain food retailers, was last conducted in 2021.

Metro (MRU.TO) was the second most respected grocery retailer, followed by Walmart (WMT). The survey was conducted on June 26 and June 27, prior to when some Metro workers in the Greater Toronto Area voted to go on strike.

Costco's total score was above the average score of the 14 retailers included in the survey. It received a score of 68.8, while the average score was 57.

While Costco's claim of the top spot remained unchanged from 2021, there were numerous changes within the rankings since then, as some discount brands jumped several spots and some chains fell behind.

Metro-owned discount brand Food Basics climbed from the No. 9 spot in 2021 to No. 4 this year, and Loblaw's (L.TO) No Frills moved one spot up to No. 5. The shift in rankings comes as Canadian grocery chains continue to see customers turn to discount brands amid high inflation.

At the same time, Sobeys (EMP-A.TO) fell four spots to No. 9, while the Your Independent Grocer chain – which is owned by Loblaw – fell eight spots to No. 10. Loblaws also dropped in the rankings, from No. 8 in 2021 to No. 13 in 2023.

"Since last evaluated in September 2021, much has occurred to affect grocery and food retailer organizations, including COVID-19, supply chain challenges, and inflation-spurred price increases," Jeff Munn, executive director of the Canada's Most Respected Awards Program, said in a statement.

"The significant changes in this year's rankings compared to 2021 demonstrate that corporate respect is an attribute consumers harbour, particularly when they have a choice as to where to put their pocketbooks in tough economic times."

Canadian grocery chains have been the subject of public criticism and scrutiny as food inflation continues to soar to rates not seen in more than four decades, consistently remaining above Canada's headline inflation rate. Food prices jumped 9.1 per cent annually in June, slightly above the 9 per cent annual increase reported in May, even as the Consumer Price Index slowed to 2.8 per cent year-over-year.

Top executives from Canada's biggest grocery chains have repeatedly said they are not causing or profiting from food inflation, pointing to higher supplier and input costs as key factors driving prices.

A recent Yahoo/Maru Public Opinion poll found that a majority of Canadians expect grocery prices to continue to rise. The survey also found that four in 10 Canadians blame grocers for skyrocketing prices, while the rest blamed high food costs on a range of factors, including higher supplier prices and government policy.

"So, to fall in the ratings is not just about the perception of high pricing but also about the conduct of the brand itself towards the public and its customers," Maru Public Opinion president John Wright said.

"For instance, if an organization is viewed as tone deaf or acting in a way that doesn't align with customer values, it can be punished by people choosing to do their business elsewhere. Corporations can also be rewarded for respecting not only their customers and the pocketbook value they provide, but also how they treat their employees and stakeholders."

Here is the list of Canada's most respected grocery/food retailers, with their ranking from 2021 listed in brackets.

  1. Costco (1st)

  2. Metro (3rd)

  3. Walmart (14th)

  4. Food Basics (9th)

  5. No Frills (6th)

  6. IGA (7th)

  7. Real Canadian Super Stores (4th)

  8. Freshco (10th)

  9. Sobeys (5th)

  10. Your Independent Grocer (2nd)

  11. Save-on Foods (11th)

  12. Safeway (12th)

  13. Loblaws (8th)

  14. Foodland (13th)

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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