Grocery chains restrict what they pay suppliers during the holidays, but that doesn’t guarantee lower prices at the checkout

The grocery industry’s annual “blackout” begins in November and generally runs through the end of January. During this period, grocery chains applying the policy refuse certain price increases requested by their suppliers. For shoppers hoping for relief, that may sound reassuring. But freezing suppliers’ prices does not mean freezing the grocery bill.

This longstanding commercial practice primarily affects packaged goods, with fresh products generally treated differently. It offers retailers greater predictability during the holiday season. Whether it offers consumers meaningful protection is another matter.

Three prices must be distinguished: the price requested by the supplier, the price paid by the retailer, and the price charged to the consumer. Restricting changes to the first does not automatically freeze the other two. Retail prices can still move as promotions change, inventories turn over, and retailers adjust their commercial strategies.

The historical pattern deserves scrutiny. Based on the calculations presented using Statistics Canada’s non-seasonally adjusted Consumer Price Index, the following ranking shows average monthly changes in prices for food purchased from stores, excluding restaurants, from October 1996 to September 2026:

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In this ranking, November, January, and December are among the months with the largest average increases. The supplier blackout therefore coincides with a period when grocery prices continue to rise.

Of course, many other factors contribute to food inflation. Weather, exchange rates, transportation costs, and seasonal supply conditions all influence what Canadians pay. Fresh products, which are often outside the blackout’s scope, also contribute to the overall grocery index.

But acknowledging those factors does not establish that the blackout helps consumers. Without evidence that it delivers savings at the checkout, presenting it as a consumer affordability measure is far-fetched. An operational benefit for retailers cannot simply be assumed to translate into a financial benefit for households.

The usual justification centres on the holiday rush. Grocery chains want to limit changes to procurement costs during a period of heavy demand and considerable logistical pressure. That is understandable. Managing a national grocery network in December is no small task.

Still, the argument deserves reassessment. Retailers have increasingly sophisticated systems for managing inventories, forecasting demand, and administering prices. If a three-month restriction remains necessary, the industry should explain why, identify the alternatives, and demonstrate its benefits.

There is also an economic reality that a calendar cannot erase: suppliers’ costs do not stop changing because retailers temporarily stop accepting increases.

A manufacturer facing higher transportation, packaging, ingredient, or labour costs must absorb them, offset them through greater efficiency, or seek to recover them later. One possible consequence is that requests for increases are brought forward before the blackout or deferred until it ends. The policy could therefore change the timing of price adjustments rather than eliminate the underlying pressure.

That possibility warrants investigation. It should not be treated as a proven explanation for the monthly pattern. But neither should retailers receive automatic credit for protecting consumers simply because they have postponed negotiations with suppliers.

The Canada Grocery Code of Conduct provides a framework for examining these relationships. It does not set retail prices or determine the appropriate size of supplier increases. Its emphasis on transparency, good faith, and clear commercial procedures nevertheless makes the terms of a blackout a legitimate subject for scrutiny.

Are suppliers given adequate notice? Are exceptions clearly defined? Can unexpected cost shocks be considered fairly? And do smaller suppliers have a meaningful opportunity to negotiate?

These questions matter because the ability to absorb three months of rising costs varies considerably across businesses. A large multinational and a small Canadian processor do not necessarily have the same financial flexibility. A policy that provides certainty to a retailer may create considerable uncertainty elsewhere in the supply chain.

The broader issue is how costs, risks, and bargaining power are distributed throughout the food system. Consumers need an efficient and competitive supply chain, supported by viable suppliers and retailers. They also deserve clear distinctions between policies designed to simplify business operations and measures demonstrated to improve affordability.

If the blackout delivers measurable savings to households, the industry should provide the evidence. Until then, Canadians have little reason to confuse frozen supplier negotiations with frozen grocery prices.

Dr. Sylvain Charlebois is senior director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast and visiting scholar at McGill University.