The Decibel A food economist’s case against public grocery stores
May 1, 2026
Mike von Massow, a food economist at the University of Guelph, explains grocery market economics and public policy. He discusses what public grocery stores would look like, why they appeal politically, and international examples that show limits. He contrasts universal store discounts with targeted supports like GST rebates and considers impacts for rural and northern communities.
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What A Public Grocery Store Actually Entails
- Public grocery stores mean the government would own or rent stores, build distribution, hire purchasers and staff, and sell groceries directly to consumers.
- Mike von Masso says such stores would only be cheaper if the government subsidizes prices, because many price drivers are outside government control like weather and war.
Political Appeal Comes From Holding Grocers Accountable
- Politicians promote public groceries partly because grocers are an easy target blamed for high prices; public stores signal holding them to account.
- Von Masso acknowledges they could lower prices if scaled but argues it's not cost-effective versus other measures.
Why Grocery Margins Are Low And Scale Matters
- Grocery chains operate on very thin margins (around 3–6%) and pursue volume not high margins, using low prices on staples to draw customers.
- Von Masso explains scale matters because volume lets big chains buy cheaper, run distribution centers, and compete intensely for customers.