Toronto city council<\/a> voted to move forward with a concept rarely seen in Canada, and meant to tackle skyrocketing food prices: not-for-profit, city-run grocery stores. <\/p>\nBut critics believe Toronto is biting off more than it can chew by stepping into the business, against grocery store giants, with little experience and minimal supply-chain connections, in an industry that has razor-thin profit margins.<\/p>\n
\u201cEvery dollar you put through into the till, there\u2019s about four cents that\u2019s coming back as profit for each one of the major retailers that\u2019s out there,\u201d said Neil Hetherington, CEO of Toronto\u2019s largest food bank, the Daily Bread Food Bank, in an interview with CTV News Sunday. \u201cThat is a very slim margin, you are dependent on scale.\u201d<\/p>\n
He said the question now is whether the city can compete with established grocers.<\/p>\n
\u201cCan they match the purchasing power and efficiency of the for-profit sector and then deliver it without that profit motive to deliver food at a lower cost?\u201d he added. \u201cIt it works out that they can deliver at lower cost, then yeah you would go for it, but obviously there\u2019s some skepticism about that.\u201d<\/p>\n
Some of that skepticism also comes from Sylvain Charlebois, a researcher of food distribution and policy at Dalhousie University in Halifax, N.S.<\/p>\n
\u201cWhen you walk into a grocery store, typically when you grab a product — 70 per cent of that price represents the cost to produce the good in the first place. On top of that, you will have to pay for labour which is 15 per cent and then overhead costs which is five to ten per cent,\u201d said Charlebois. \u201cSo the margins are really low and the government will have to consider that.\u201d<\/p>\n
Charlebois added that major grocers also have fostered relationships to create reliable supply chains that allow them to get some products in bulk at discounted rates \u2014 which Toronto won\u2019t have the benefit of when it starts out with its own municipally operated grocery chain.<\/p>\n
\u201cThe key to a successful grocery chain is to start slow, whether it\u2019s a for profit organization or a not for profit organization,\u201d said Charlebois. \u201cYou start slow with one store and you build your supply chain and your relationships up the food chain, accordingly to offer the best deals possible for your customers.\u201d<\/p>\n
Other Canadian cities watching closely<\/p>\n
The idea is not new but has been gaining momentum since New York\u2019s newly elected mayor, Zohran Mamdani, made a push for city-run grocery stores in his city \u2014 and the new leader of the federal New Democrats, Avi Lewis, has a platform that also includes a promise of a \u201cpublic option for groceries.\u201d<\/p>\n
Toronto\u2019s pilot project includes opening four not-for-profit, city-run grocery stores in downtown Toronto, North York, Scarborough and Etobicoke \u2014 where they would serve so-called \u201cfood deserts,\u201d low-income neighbourhoods where grocery stores are also sparse.<\/p>\n
An Ottawa city councillor says her staff have been asked to look into city-run grocery stores as one option among many to tackle the issue of food insecurity.<\/p>\n
\u201cThe work that we\u2019re doing is not on a specific solution, but rather a study to look at the different options that are available,\u201d said councillor Marty Carr. \u201cBut certainly having Toronto come out early and establishing those four stores will give us an opportunity to look at — and see if that\u2019s something feasible and if it works.\u201d<\/p>\n
While in Vancouver, councillor Pete Fry says they had a similar proposal presented to council \u201ca couple of weeks ago\u201d but it was dismissed by the current mayor.<\/p>\n
Fry says now his focus is to support independent and co-op grocery stores that already exist.<\/p>\n
\u201cThe real opportunity here in the City of Vancouver would be for us to support those existing supply chains, support those existing non-for-profit retailers and allow them to do what they already know how to do, rather than just step in and try and take over. And something that we have absolutely no expertise in,\u201d said Fry.<\/p>\n
\u201cGrocery is a tough business, and it requires specialized expertise in logistics, supply chains, and retail operations that cities don\u2019t have,\u201d added Vancouver city councillor Sarah Kirby-Yung. \u201cOur role at the municipal level is best focused on creating the conditions for businesses to succeed and for residents to have access to affordable options.\u201d<\/p>\n
The Toronto city councillor who put the motion forward, Anthony Perruzza, says the city would waive property taxes and development charges for the stores — and pass the savings down the customers.<\/p>\n
The Toronto city councillor who put the motion forward, Anthony Perruzza, says the city would waive property taxes and development charges for the stores \u2014 and pass the savings on to customers.<\/p>\n
The project is far from being complete \u2014 with city staff taking roughly a year to return to city council with a plan \u2014 and the financial impact report noting there is currently no money in the city\u2019s current budget allocated to the city-run grocery stores.<\/p>\n","protected":false},"excerpt":{"rendered":"The not-for-profit grocery store concept has been gaining momentum in New York City, but it\u2019s unclear if Toronto…\n","protected":false},"author":2,"featured_media":569990,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[712,43,44,41,39,42,40],"class_list":{"0":"post-569989","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-apple-news","9":"tag-headlines","10":"tag-news","11":"tag-top-news","12":"tag-top-stories","13":"tag-topnews","14":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/569989","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=569989"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/569989\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/569990"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=569989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=569989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=569989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}