Farmers in the middle of low-price retail battle

Here’s a brave prediction from the George Morris Centre: food prices won’t rise in our current competitive environment for groceries. Even though significant factors are at play behind the scenes, such as a recovering economy and rising production costs for farmers, the chronic grocery war between retailers will keep food prices in check.

It’s a conclusion found in a new report released last week by the Guelph-based centre. The report focuses on private labels—retailer-owned labels such as No Name and President’s Choice—versus national brands. Report author Kevin Grier says the two parties are slugging it out with increasing intensity, as the brands try to win back customers from popular and cheaper private labels.

That’s prompting all competitors to beef up their marketing, promotion, profile and pricing efforts, says Grier. And along with Wal-Mart’s foray into the cheap-food business, it’s a move that will keep Canadian food price inflation in line.

That’s good news for consumers. But it underlines how the primary production sector – that is, farmers – will need increased support to maintain a stable industry. Farmers are taking a hit and they’re fed up with platitudes about the importance of the sector, while many of them are struggling to make ends meet.

I cover the ins and outs of this situation in my Urban Cowboy column in today’s Guelph Mercury.