Industry minister wants a foreign grocery giant to challenge Canada's Big Five. Will anyone bite?

Federal Industry Minister François Philippe Champagne is trying to lure a foreign grocery chain to Canada to boost competition, though it's not clear who, if anyone, is taking the bait. Champagne that he's been in contact with food executives around the world in an attempt to find a fresh challenger for the Big Five grocery chains — Loblaw, Sobeys, Metro, Walmart and Costco — which control about 80 per cent of sales.

The hope, he said, is a new player would drive down prices across the industry. Champagne's announcement brought groans from industry insiders, who pointed to a long list of failed Canadian expansion attempts from U.S. retailers, including Target, Nordstrom, Lowe's and Bed Bath & Beyond.

Nonetheless, some shoppers are apparently still eager to dream. Readers responded to the news with their own suggestions for who Champagne should be courting. So we looked at a few of the most popular chains, to see if the minister's plan could actually work. Popular U.S. grocer Trader Joe's doesn't appear to be interested in expanding north.

The popular U.S. grocer, famous for its private label brand, doesn't appear to be interested. Asked if Trader Joe's was entertaining the minister's offer, spokesperson Nakia Rohde said the company is "currently focusing our growth within the U.S." That will come as a blow to the enthusiastic contingent of Trader Joe's fans in Canada.

The chain has been so in demand here that a reseller, called Pirate Joe's, was able to operate for years in Vancouver, selling products bought at Trader Joe's in Seattle. But the store closed in 2017 amid a lawsuit with Trader Joe's, the Vancouver Sun reported. Veteran commercial real estate developer Fred Waks said it is "ridiculous" and "inane" to think a foreign challenger could break into Canada and force the country's heavily consolidated grocery chains to drop their prices.

Walmart Canada CEO Gonzalo Gebara, however, argued otherwise during pointing to an internal study that found a new Walmart store in Canada drove down household grocery bills for everyone in the area, regardless of where they shopped. But high interest rates and construction costs are making it impractical to build new stores from scratch, according to Waks, CEO of the real estate firm Trinity Group and a former president of RioCan.

To get around building costs, he said, you could takeover a network of existing stores in Canada, but that's unlikely since most domestic players are too strong. Wegmans has more than 100 locations across the U.S. east coast. The supermarket chain with more than 100 locations across the U.S. east coast is respected as an innovator in the grocery industry.

The company has no immediate plans to come to Canada, but didn't rule it out entirely. "We are always looking for new opportunities, but we do not comment on specific sites unless we have negotiated a lease or purchase agreement," Wegmans spokesperson Marcie Rivera said in an email. Rivera said the company keeps a list of future stores on its website.

The list currently includes five sites in development, none of which are in Canada. , the federal competition watchdog concluded it was "more difficult than ever" for businesses to get into the Canadian grocery market. The Competition Bureau talked to international retailers who said they weren't interested in moving to Canada because of "daunting" competition from the existing grocers, as well as Canada's bilingual labelling requirements.

Some were also concerned about the cost of developing a mix of products that would fit into Canada's "unique multicultural grocery experience." The bureau also recommended banning so called "restrictive covenants" in grocery leases, where supermarket chains can force landlords at shopping malls not to lease nearby space to competitors.

The federal government passed legislation in December to outlaw those covenants. The German discounter didn't respond to questions about a possible expansion in Canada. Aldi has locations across Europe, as well as Asia, Australia and the U.S., but has so far stayed away from Canada. In its report this summer, the Competition Bureau found Canadian grocers don't face the same competition from discounters as other markets around the world, where discount chains like Aldi and Lidl act as legitimate challengers to large grocers.

"That’s because in Canada, the large grocers also own many of the biggest discount stores," the bureau said, noting that Loblaws owns No Frills and Maxi, Sobeys owns FreshCo, and Metro owns Food Basics and Super C. The absence of Aldi means Canadian shoppers could be missing out on the so called Aldi Effect — a phenomenon observed in Australia when the chain expanded there, and drove down prices for consumers in areas wherever Aldi opened a store, the bureau noted in its report.

David Soberman, a marketing professor at the University of Toronto's Rotman School of Management, said if the government is serious about injecting more competition into the grocery sector, it could force Loblaw, Sobeys and Metro to sell off one of their banners, like their discount chains. If those banners were up for grabs, it would give an international challenger an instant footprint in the country, Soberman said.

"You might give an in — a beach head — for another competitor," he said, adding that the best way for the government to force divestitures would be on a local basis, market by market. But even if the big chains had to sell off some of their stores, it might not be a perfect solution for a retailer like Aldi, mostly because of size.

Stores like No Frills or FreshCo are much larger than the square footage the Aldi model uses, Soberman said. "They're a lot smaller," he said. Quebec convenience chain Alimentation Couche Tard tried to buy Carrefour for $20 billion but backed off after pushback from the French government.

Champagne has already said he's keeping an eye on Carrefour, the French grocery giant with locations across Europe and South America. But those comments were about how the chain's approach to taming inflation, as part of Champagne's high profile food summit this fall. The minister summoned the heads of the Big Five for meetings, in hopes of pushing them to roll out programs similar to Carrefour and other European grocers.

The chain didn't immediately respond to a request for comment. But if Champagne has come calling, it won't be the first time the chain has attracted attention from Canada. In 2021, the Quebec convenience chain Alimentation Couche Tard tried to buy Carrefour for $20 billion (U.S.) but backed off after pushback from the French government, according to Reuters..