Consumers are prioritizing Canadian purchases in grocery stores amidst a groundswell of national pride. However, those Canadian purchases aren’t spread throughout the store evenly. Consumers are disproportionately shifting their fresh produce, dairy and fresh meat purchases to Canadian; the ability to envision one’s impact with local farmers is clearly striking a chord.
At a broader level, the Canadian economy is struggling and shoppers will likely tighten their spending to protect against a potential downturn. Within grocery retailing, the result will be shoppers who pay more attention to prices and discounts and put more effort into maximizing value however they can.
Looking ahead, consumer-facing artificial intelligence will make its mark in the grocery industry. Self-checkout is a case study for how adoption of automation increases once consumers see how it makes their lives easier. AI in grocery will follow the same path, with shoppers skeptical at first but willing to try new tools if there’s a clear benefit; the retailers that can pinpoint that useful feature (rather than AI that is more trouble than it’s worth) will be able to attract new shoppers.
As stable as the grocery industry is, it's constantly evolving. Buying Canadian, tighter finances, same-day delivery and AI are all changing how consumers shop.
Scott Stewart, Associate Director, Lifestyles & Retail
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EXECUTIVE SUMMARY
- What you need to know
- Outlook for grocery retailing
- Opportunities
- Grocery delivery is about getting some things quickly, rather than getting all things eventually
- Anticipate that shoppers will initiate savings mode
- The door is open for AI…but only if it’s useful
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THE MARKET
- Food and beverage expenditures have grown, driven by rising prices
- Graph 1: household final consumption expenditure – food and non-alcoholic beverages, 2018-24
- Consumers and the economic outlook
- Market factors
- Canada’s population growth is stagnating – meaning business growth will need to come from stealing market share
- Graph 2: population trend and population estimates, 2021-2025 (trend) and 2026-2036 (estimates)
- GDP per capita trends illustrate the role population growth has played in the market
- Graph 3: change in GDP per capita, 2019-25
- Food inflation slowed from its 2022-23 pace, but prices continue to climb
- Graph 4: consumer price index, 2019-24
- Graph 5: consumer price index, 2025
- Consumers are still worried about rising prices
- Graph 6: consumer concerns, 2025
- When times are tough, grocery shoppers avoid cutting back – but find ways to adapt
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THE CONSUMER
- Buying Canadian: how shoppers are shifting their purchases
- Most grocery shoppers are buying more Canadian
- Graph 7: changes in purchases compared to a year ago, 2025
- Farmers are a common theme among the categories seeing the biggest boost
- Graph 8: changes in purchases compared to a year ago – more Canadian (NET), 2025
- Demand for seasonal dishes is a marketing opportunity for grocers
- Canadian CPGs face more of an uphill battle
- Help shoppers envision their impact
- Lays turns potato chips into a story about farmers
- Shoppers will gravitate to “Made in Canada” more than “Packaged in Canada”
- Buying Canadian: why shoppers are (or aren’t) buying more Canadian products
- The economy is Canadians’ top motivator
- Graph 9: reasons for buying more Canadian products at grocery stores, 2025
- Economic-based messaging should be used by premium brands
- Be careful with any anti-US rhetoric among younger shoppers
- Graph 10: reasons for buying more Canadian products at grocery stores, by generation, 2025
- Cost is the biggest barrier to buying Canadian
- Graph 11: reasons for not buying more Canadian products at grocery stores, 2025
- Women are more focused on price, men are less concerned with the cause
- Graph 12: reasons for not buying more Canadian products at grocery stores, by gender, 2025
- Ultimately, buying Canadian comes down to the money
- Value: the importance of savings in today’s economy
- Spending cuts now match 2022 levels, making value as important as ever
- Graph 13: “In the past six months, I have stopped buying a certain product because it got too expensive” (% agree), 2022 vs 2025
- Price tags are the most effective way to demonstrate savings
- Graph 14: most attention-grabbing parts of a grocery store -ranked, 2025
- Use themed displays and end caps strategically
- Ensure that promotional items are properly stocked in their standard shelf space
- Value: ways of offering savings to grocery shoppers
- Third-party apps are becoming more common in grocery
- Younger generations use these apps the most
- Graph 15: “I use a third-party app to save on groceries”, by generation, 2025
- Third-party apps make flyers as relevant as they’ve ever been
- Resizing packages is another way to help consumers find value
- Graph 16: attitudes towards new product sizes (% agree), by generation, 2025
- Make it easier for smaller households to limit costs and reduce waste
- Large packages are especially useful for families
- “Family size” indicates good value on bulk purchases
- Re-sizing is easier said than done – but offers a win-win solution
- Online grocery shopping: who shops online
- Online grocery has grown, but is still used by a minority of shoppers
- Graph 17: bought groceries online in the past month, 2021-25
- Even among the heaviest online users, in-store shopping is the standard
- Graph 18: ways of shopping for groceries in the past month, by generation, parental status and employment status, 2025
- Delivery subscription pass holders still use in-store shopping more often
- Two strategies to succeed in online grocery
- Online grocery shopping: demand for same-day delivery
- Same-day grocery delivery is on the rise
- Graph 19: “I’ve gotten same-day grocery delivery in the past six months” (% agree), 2023 vs 2025
- Same-day delivery is becoming the norm among younger shoppers
- Graph 20: “I’ve gotten same-day grocery delivery in the past six months”, by generation, 2025
- Smartphones are becoming a vital tool in online shopping
- Uber Eats and DoorDash are disrupting grocery delivery
- Graph 21: services used to get grocery delivery in the past month, 2025
- Gen Zs are already using restaurant delivery apps
- The value of full-service delivery is limited by consumers’ reluctance to shop entirely online
- Instacart is promoting its quickness
- Uber Eats and DoorDash have a branding advantage
- DoorDash wants to get even quicker and more nimble
- AI and automaton: how self-checkout has normalized automation
- Self-checkout has made most shoppers comfortable with automation
- Digital solutions and automation are standard for younger shoppers
- Graph 22: “I regularly use self-checkout at grocery stores”, by generation, 2025
- This isn’t about self-checkout, it’s about what it represents
- AI and automation: interest in AI retail solutions
- Interest is AI solutions is increasing
- Graph 23: attitudes towards AI in grocery stores (% agree), 2023 vs 2025
- Younger consumers will drive AI adoption
- Young men are the most receptive to AI in grocery stores
- Graph 24: attitudes towards AI in grocery stores (% agree), by age and gender, 2025
- Artificial intelligence will be one part of a larger system
- Graph 25: attitudes towards AI in grocery stores (% agree), by digital tech usage in grocery retail, 2025
- Thought starters: potential AI innovations in grocery
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INNOVATION AND MARKETING
- Launch activity and innovation
- Instacart launches Store View and Second Store Check to avoid out-of-stock frustrations
- Skip expands its retail delivery footprint with Dollarama and Shoppers Drug Mart
- New apps guide shoppers towards Canadian purchases
- Walmart launches a rooftop greenhouse initiative
- Tre’Dish competes on price using transparency
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APPENDIX
- Report scope/market definition
- Consumer research questions
- Consumer research questions – crosstabs
- Consumer research questions – curated questions
- Consumer research methodology
- Generations
- Abbreviations and terms
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