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AGAR: Past experience shows the government has no business running a grocery store

Remember the city's Al a Cart program?

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Avi Lewis’ election as the federal NDP leader means a bad idea gets extra heat.  

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To deal with the high cost of groceries, Lewis suggested a government-owned grocery store “using a high-volume, warehouse-style model with subsidized rent and utilities.” He says he can bring down prices by 30-40%.  

AGAR: Past experience shows the government has no business running a grocery store Back to video

Brian Lilley writes in the Toronto Sun, “That’s impossible given that the profit margin on groceries is 2-4% at best and a government-run store would come with government wages, which are generally about 25% higher on average compared to the private sector for similar jobs.”  

The Toronto Star reports, “Councillor Anthony Perruzza opened the door to what food experts called an ‘exciting’ discussion, but one that should be taking place at the federal level: Toronto’s first-ever public grocery stores to tackle rising food costs.”  

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Toronto Mayor Olivia Chow moved a motion directing city staff to report back next year “with a vision and strategy for establishing municipally operated grocery stores, and broader food security and affordability measures, including asking senior levels of government for support.”  

Toronto can’t run a hot dog stand.  

A failed city project comes to mind

The Al a Cart program in 2009 was to introduce the city to different and healthier multicultural street alternatives to traditional hot dog stands — foods like kebab, falafel and shawarma.  

The program failed and left eight different cart owners in serious debt.  

The city can’t run housing. There is an $8.5-billion repair backlog, leaving residents with mould, rats and cockroaches.  

The worst landlord in Toronto is Chow. For God’s sake, keep her out of the grocery business.  

Lack of purchasing power

The left-wing Canadian Centre for Policy Alternatives admitted that in Florida, Kansas and Illinois, municipal governments opened grocery stores after they had been abandoned by large chain grocers. All ceased operating within a few years.   

The centre argues that the only way public grocery stores could work is for there to be a chain of 40 or 50 of them, at a minimum, to achieve purchasing power.  

It also argues that a company like Loblaw, even with a profit margin of 3-4%, still makes total profits of over $2 billion that could be passed along to consumers as price savings.  

OK, but that is from a total of 2,400 stores, which is a scale of operations and purchasing power the government won’t achieve.  

Do Lewis, Chow and Perruzza imagine thousands of government grocery stores?  

It is only the left that thinks profit is what makes anything expensive.   

Other solutions governments should consider

Government, which seldom puts itself in the position of competing on a level playing field, does not have a history of operating as efficiently as Loblaw, Walmart or Sobeys, such that it can take profit off the table.  

Too high a level of management, unionized workers and bureaucracy will undoubtedly result in the same experience as in the other places where this has been tried and failed.  

If Lewis, Perruzza, the Centre for Policy Alternatives or anyone else wants to help people with grocery prices, they would be better served by lowering business tax, reducing red tape and advocating for income-based assistance for low-income people.  

Having the city run a grocery store is a dream that is likely to be the nightmare the Al a Cart program proved to be.  

Government doesn’t have a track record showing competence in business, so let’s be real.  

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'Equity cards' arguments take over NDP Leadership Convention: 'CANADA IS COOKED' Canada

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