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About GRIT Reports

For two decades, Greenbook Research Industry Trends (GRIT) Report s have provided a comprehensive fact base of important trends in the insights, analytics, and research industry. The information and analyses in these reports help brands to grow their insights practices, suppliers to grow their revenue, and insights professionals to grow their careers.

Each year, Greenbook publishes at least two GRIT Reports. The Business and Innovation Report explores the evolving industry structure and trends that shape and are shaped by insights strategy, such as innovation. The Insights Practice Report focuses on trends in approaches, methodologies, and skills that affect the success or failure of insights work.

As the most comprehensive source of information and guidance on insights trends, GRIT Report s provide businesses and individuals, buyers and suppliers, and every kind of insights professional with necessary tools to plan strategies for growth.

Who should read GRIT?

Anyone who works with, manages, or uses deliverables from research, analytics, or insights will benefit from reading GRIT Reports. However, the reports are as comprehensive and detailed as the audience is broad, and not every topic will be equally engaging to every individual. Even if you find every topic to be compelling, it is not necessary to read the reports from cover-to-cover or in section order. To start your exploration of the world of GRIT, click on one of the following roles to find the entry points that may be most engaging for you: [button functionality coming soon]

Brand-side Practitioners

Brand-side Business Leaders

Supplier-side Practitioners

Supplier-side Business Leaders

GRIT Editions

GRIT Insights Practice Reports

This report focuses on trends in approaches, methodologies, and skills that affect the success or failure of insights work. The latest edition covers emerging methodologies, the evolving insights professional, industry buzz topics, and more – plus expert commentaries for each topic.

GRIT Business & Innovation Reports

This report explores the evolving industry structure and trends that shape insights strategy. The latest edition covers opinions about and adoption of AI, unmet needs, the evolving insights audience, and more – plus the GRIT Top 50 Most Innovative suppliers and expert commentaries for each topic.

GRIT LATAM Reports

This first-of-its kind GRIT Report discusses the topics of the Insights Practice edition from the perspective of insights buyers and suppliers in Latin America. It compares LATAM to other global regions and discusses similarities and differences across South & Central America.

Review GRIT topics that may be most relevant to your role:

Brand-side insights professionals who are in the early stages of their careers or who are more likely to be focused on project work will find a trove of essential information to help plan their next career stages and get the most out of their current experience within GRIT’s Business & Innovation (B&I) and Insights Practice (IP) Reports. GRIT breaks down and explains the key trends in insights, research, and analytics so you can benchmark your career progress and take stock of the opportunities around and in front of you.

Unmet Needs

The pandemic created situations that may have created more separation between insights professionals and the business issues they need to address. What can you do help ensure that the work you perform aligns with the ultimate business needs and perhaps delivers beyond those needs? (B&I)

Evolving Insights Professional

Increasingly, insights professionals are focused on developing skills in areas as diverse as data science and storytelling, but does any individual have the resources and capacity to learn all the skills they might need? How do they prioritize them and how do they make them work together? (IP)

Caution: AI at Work

AI-enabled solutions can help you meet the ever-increasing demand for speed and cost reduction, but some forms have weaknesses that can lead to incorrect answers or put your company’s IP at risk. What do you need to consider before you start applying solutions to specific questions and problems? (B&I)

Emerging Methods

If a new methodology or approach can increase the quality, speed, or cost-effectiveness of your insights work, delaying adoption can cost you opportunities to increase your throughput or, perhaps worse, put the business at a competitive disadvantage. Which are worth your time and effort to explore? (IP)

Brand-side insights professionals in management will find a wealth of essentials for strategic planning, organizing the insights function, evaluating and selecting suppliers and methodologies, and more within GRIT’s Business & Innovation (B&I) and Insights Practice (IP) Reports. GRIT’s detailed analyses across a broad range of topics provide you with the information you need to manage today’s professional challenges while planning your future in insights.

Evolving insights Audience

From the buyer perspective, the insights group increased its power as the gatekeeper for insights methodologies and suppliers. From the supplier perspective, however, there’s more than one gate and a variety of gatekeepers. How centralized is insights work and what does that mean for insights managers and for how well the business understands its markets? (B&I)

Investment Trends

In addition to research projects, insights professionals invest in technology and staff and make choices between taking work in-house and outsourcing it. With the ever-increasing demand for faster projects that cost less, what mix of staff, automation, and outsourcing provides the right balance across speed, cost, and quality for you? (IP)

Buyer-side insights professionals are cautiously optimistic about the potential for AI-enabled solutions. Some are trying it out personally, others are using it professionally, and most expect the latest technology to find its way into their products. How receptive are businesses to using AI for insights work and where do they expect it to have the most impact? (B&I)

Business Outlook

Recently, the insights industry had shown signs of shaking off the effects of the pandemic, but current trends indicate fresh suffering. Insights professionals on both the buyer and supplier sides are having more trouble meeting their goals. Are your business and career vulnerable to these trends or is there a silver lining? (B&I, IP)

Within GRIT’s Business & Innovation (B&I) and Insights Practice (IP) Reports, supplier-side insights professionals who are in the early stages of their careers or who are more likely to be focused on project work will find a trove of essential information to help plan their next career stages, understand what their clients and potential clients want and need, and get the most out of their current experience. GRIT breaks down and explains the key trends in insights, research, and analytics so you can benchmark your career progress and take stock of the opportunities around and in front of you.

Stakeholders are demanding research that is completed more quickly and for less money, but may be losing focus on the necessities that give research its credibility and value. What can you do to help your clients make their case for good research (which will also help your company maintain margins)? (B&I)

Established Methods

If a method is unfamiliar to you and it is important to clients and potential employers, it doesn’t matter how new it is to anyone else, you’ll still want to add it to your skill set. In this discussion, GRIT provides you with the context you need to make decisions about which methodologies to explore next. (IP)

AI in Everyday Life

Everyone’s talking about generative AI, but AI entered our lives well before ChatGPT. Some experiences with it have been generally positive while others have been negative, but most insights professionals seem to be aware of its risk factors. When you advocate for your insights teams to adopt AI (or against it), what arguments are you likely to need to make in order to establish your case? (B&I)

Industry Buzz Topics

You may already be tired of hearing about topics like storytelling, Big Data, or AI, but perhaps they’d be more relevant with more context. Understanding why certain topics are popular may help you connect your dots in a way that helps you define opportunities you merely suspected were there. Which are merely "buzzwords" and which are topics that deserve their "buzz"? (IP)

Supplier-side insights professionals in management will find a wealth of essentials for strategic planning, staying ahead of competition, keeping up with client needs and behaviors, and more within GRIT’s Business & Innovation (B&I) and Insights Practice (IP) Reports. GRIT offers a cornucopia of knowledge to help insights suppliers target likely prospects, benchmark and reassess their practices, and track how competition and clients are evolving around them.

Suppliers of all types expect to add new AI technology to their offerings, but very few anticipate a serious threat from competitors introducing similar. Signs on the supplier side generally point to an inevitability of AI adoption even though they are well aware of the risks. Can you explain some of these apparent contradictions or are insights professionals genuinely conflicted? (B&I)

Ever-increasing stakeholder demands for faster and cheaper research carries a double-whammy for suppliers: it makes it hard to deliver business value, and it puts them at the mercy of no-frills competitors who get away with not delivering value. What are the forces in play that make it difficult for suppliers to maintain margin and revenue, and what can you do to change this narrative? (B&I)

Supplier Profiles & Industry Structure

The sizes and composition of our six “big bucket” supplier segments continue to churn as suppliers create new service combinations and market trends favor some more than others. Although full-service research was strengthened as a revenue stream due to increased project management outsourcing during the pandemic, fewer suppliers want to position themselves so generically. How are suppliers adding and subtracting services and evolving their positioning, and what does it mean for you? (B&I, IP)

TESTIMONIALS

What insights leaders say about GRIT Reports

The GRIT Report is a great source to stay on top of industry trends and innovation. I am using GRIT regularly to update our commercial insights category strategy and identify innovative solutions.

Anja Hauptmann

Global Category Lead Commercial Insights, Bayer

The GRIT Report is my go-to when we are evaluating strategic growth opportunities. It cuts through the noise and gives me real indications of market adoption. No other source for information about our industry can beat GRIT.

Bruce A. Haymes

Chairman of the Board, Toluna

I rely on Greenbook and GRIT to help inform me of the leaders in insights innovation, and find the companies that will get my teams at P&G the right insights, with the right people at the right price.

Charlie Rader

Digital Insights Designer, Procter & Gamble

The GRIT Report should be in the toolkit of any MR business leader; if you don’t read GRIT, you’re missing out on emerging trends, shifting dynamics, and thoughtful commentary on the state of our industry.

Isaac Rogers

President, SAGO

By tapping into the deep well of industry insights and trends provided by GRIT, we are able to make informed decisions to shape our business strategy and guide the moves we make in this evolving landscape.

Lisa Wilding-Brown

Chief Executive, InnovateMR

GRIT is our essential guide. It helps us understand what clients are looking for, what technologies are hot, what competitors are doing and where the industry is going. The start of many a fruitful discussion!

Stephen Phillips

Chief Executive Officer, Zappi

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ESOMAR Publishes the 2022 Global Market Research Report

ESOMAR released the 2022 edition of the Global Market Research Report (GMR). Based on a global survey of more than 105 countries and regions representing over 83% of the insights sector worldwide, the report covers critical topics such as industry growth predictions, the changing client landscape, evolution of data types and methodologies, and the significant expansion of the industry’s technology-enabled sector.

“The theme this year is ‘Towards Clarity’, as the insights, data and research industry as a whole emerges - stronger than ever - from a period of uncertainty, ”says Dr Parves Khan, CEO and Director General at ESOMAR. “In the report, we closely examine the industry by region, as well as by sector, and look at the factors that are driving growth among the most successful players in the space. We dive into trends like DIY, new methodologies that are gaining momentum, and exactly how client needs are shifting. It is a must-read for anyone in this space.”

The 2022 GMR notes that the output of the industry will exceed USD $130 Billion by 2023 after an expected growth rate of 5% in 2022. This expansion comes on the heels of a record 2021, which saw the global industry expand 15% from USD $102 Billion to almost USD $119 Billion. The report includes detailed information on the growth and evolution of specific vertical sectors, both on the client and vendor sides of the industry, plus an in-depth look at regional performance, study design, emerging methodologies, and more.

Xabier Palacio, Senior Manager Intelligence Unit adds: “This year, the GMR report is projecting a K-shaped market recovery. Performance data shows countries are recovering at different rates and times. The tech-enabled sector is the fastest-growing one of the global insights industry in absolute terms, at +18.9%. At a global level, the established sector represents 39% of the total industry, the tech-enabled sector climbs up to 37%, while the reporting sector remains relatively flat at 23% compared to last year.”

The findings published in the report are based on data collected by national research associations, leading companies, independent analysts, and ESOMAR representatives, and is complemented with ESOMAR’s own independent size estimations.

Members of ESOMAR can download the report free of charge. Grab your copy here.

Gabriela Kusters

Gabriela Kusters is responsible for expanding the reach and performance of key marketing initiatives, boosting digital marketing effectiveness and growing organizational awareness around the world. She will apply her skills in all aspects of marketing to create strategies for positive growth.

With her experience, Gaby has the perfect blend in the digital marketing space and isn’t afraid to think outside the box - all while understanding the nuances of working in different regions around the world. Together with her team, Gaby conducts foundational work across all ESOMAR’s digital properties to ensure that outreach efforts are effective, optimized and aligned with organizational goals, values and culture.

Prior to joining ESOMAR in August 2022, Gaby managed marketing for high-tech telecommunications company, and led EMEA marketing programs for the global Mobile Marketing Association (MMA). Gaby holds a Master of Science in Marketing from Brunel University London and received her Bachelor of Science in Communications and Media Studies from HU University of Applied Sciences Utrecht, the Netherlands.

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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry. The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Business intelligence insight graphic with hand showing a lightbulb with $ sign in it

Why is market research important?

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete.

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research

Qualitative research
Quantitative research
Exploratory research
Descriptive research
Causal research
Cross-sectional research
Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research.

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant.
Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment.

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment.

Market research methods

Surveys and questionnaires
Focus groups
Observational research
Online research tools
Experiments
Content analysis
Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data:

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback.

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

Set clear objectives
Identify your target audience
Choose your research methods
Use the right market research tools
Collect data
Analyze data
Interpret your findings
Identify opportunities and challenges
Make informed business decisions
Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign?

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process.

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective.

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study.

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors.

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research.

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

Product Image Advanced Search CRMConnected

Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends.

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values.

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups.

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started.

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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Market Research Industry Research & Market Reports

Refine your search, utilities construction, including pipelines, water & sewer systems, telecommunications lines and systems and electric power lines and systems (u.s.): analytics, extensive financial benchmarks, metrics and revenue forecasts to 2030, naic 237100.

Apr 23, 2024 | Published by: Plunkett Research, Ltd. | USD 2,495

... Pipelines, Water & Sewer Systems, Telecommunications Lines and Systems and Electric Power Lines and Systems Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, ... Read More

Highway, Street, Tunnel & Bridge Construction (Infrastructure) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 237310

... Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 237310 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key ... Read More

Copper, Nickel, Gold and Other Nonferrous Metal (except Aluminum) Processing and Production (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 331400

... Processing and Production Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 331400 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates ... Read More

Oil and Gas Field Machinery and Equipment Manufacturing (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 333132

... Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 333132 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of ... Read More

Consumer Electronics Manufacturing, Including Audio and Video Equipment, Stereos, TVs and Radios (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 334310

... TVs and Radios Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 334310 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates ... Read More

Mining Equipment and Oil and Gas Field Equipment Manufacturing (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 333130

... Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 333130 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless ... Read More

Computer Manufacturing, Including PCs, Laptops, Mainframes and Tablets (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 334111

... Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 334111 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of ... Read More

Construction Equipment and Machinery Manufacturing (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 333120

... Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 333120 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Construction Equipment and ... Read More

Refined Petroleum and Coal Products (except Asphalt Paving and Roofing Materials) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 324190

... Materials) Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 324190 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts ... Read More

Electric Power Generation (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 221110

Apr 22, 2024 | Published by: Plunkett Research, Ltd. | USD 2,495

... and Revenue Forecasts to 2030, NAIC 221110 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Electric Power Generation Industry (U.S.) to reach ... Read More

Management of Companies and Enterprises (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 551110

... Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 551110 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Management of Companies ... Read More

Education, including Elementary Schools, High Schools, Colleges, Universities, Trade Schools and Business, Employee Training & Professional Schools (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 610000

... High Schools, Colleges, Universities, Trade Schools and Business, Employee Training & Professional Schools Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 610000 ... Read More

Casino Hotels and Casino Resorts (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 721120

... Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 721120 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Casino Hotels and ... Read More

Sporting Goods, Hobby, Book and Music Stores (Broad-Based) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 451000

... Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 451000 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless ... Read More

General Grocery Products Distributors (Groceries Wholesale Distribution, Excluding Meats, Frozen Foods and Vegetables) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 424410

... Meats, Frozen Foods and Vegetables) Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 424410 Vital industry-specific data including metrics, benchmarks, historic numbers, ... Read More

Motion Picture (Movie and Film) and Music (Sound) Production, Distribution, Exhibition (Theaters) & Publishing (Broad-Based) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 512000

... Music (Sound) Production, Distribution, Exhibition (Theaters) & Publishing (Broad - Based) Industry (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 512000 Vital industry-specific ... Read More

Electric Power Distribution (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 221122

... and Revenue Forecasts to 2030, NAIC 221122 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Electric Power Distribution Industry (U.S.) to reach ... Read More

Natural Gas Utilities (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 221210

... and Revenue Forecasts to 2030, NAIC 221210 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Natural Gas Utilities Industry (U.S.) to reach ... Read More

Computer and Peripheral Equipment (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 334100

... Its Industry, and Revenue Forecasts to 2030, NAIC 334100 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Computer and Peripheral Equipment Industry ... Read More

Computers, Peripherals, Software and Accessories Distribution (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 423430

... and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 423430 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Computers, ... Read More

Hospitality, Restaurants, Hotels, Bars and Food Service (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 720000

... Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 720000 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key ... Read More

Colleges, Universities and Professional Schools (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 611310

... Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 611310 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Colleges, Universities and ... Read More

Amusement & Theme Parks, Recreation & Amateur Sports Facilities (incl. Tennis Centers, Golf Courses, Ski Resorts) and Gambling Establishments (but not Casino Hotels or Race Tracks) (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 713000

... Forecasts to 2030, NAIC 713000 Amusement & Theme Parks, Recreation & Amateur Sports Facilities (incl. Tennis Centers, Golf Courses, Ski Resorts) and Gambling Establishments (but not Casino Hotels or Race Tracks) Industry (U.S.): Analytics, Extensive ... Read More

Credit & Debit Card Issuing (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 522210

... Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 522210 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will save countless hours of research. Key Findings: Credit & Debit ... Read More

Full-Service, Fast-Food, Pizza Delivery, Coffee Shops and Other Eating Places (U.S.): Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2030, NAIC 722500

... (U.S.): Analytics, Extensive Financial Metrics, Benchmarks Against Averages and Top Companies Within Its Industry, and Revenue Forecasts to 2030, NAIC 722500 Vital industry-specific data including metrics, benchmarks, historic numbers, growth rates and forecasts that will ... Read More

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Finding Industry Reports

Market Research Basics: Finding Industry Reports

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Recall that industry reports are comprehensive accounts of a particular industry, containing a depth of information, facts and statistics ( source ). They usually include information about emerging industry trends, general financial statistics (e.g. operating costs, revenue, consumer spending), details about major companies, market share, and summary of supply and demand chains.

Industry reports are usually very expensive. A lot of reports that you find in a Google search can cost around $3000, just for one report! And, the credibility of those reports is hard to determine. Good news! You can access credible industry reports through the library's subscription databases. Here are some suggestions for you. Start here if you're from UNC. Start here if you're from a public library.

Start Here with Public Library Access

Abi/inform ( unc link ; public library link ).

If you're using public library access, First Research Industry Profiles in ABI/Inform are a good place to start researching U.S. industries. These reports are high-level overviews of U.S. industries. Click on the correct access link above and follow these instructions to find First Research Industry Profiles.

Select “Publications” (to the right of “Basic Search”)

Search for “First Research Industry Profiles” and select
In the “Search within this Publication” field, enter in key words for your industry and search
This will produce a list of First Research Industry Reports on your industry. To get more specific add keywords (ie “Restaurant” and “fast food”).

You can sort your results by date or relevance.

Business Monitor International Industry Reports , also in ABI/Inform, are have reports for industries in countries that are not the U.S.

Select "Browse" (to the right of "Basic Search")

Look under first heading "Industry and Market Research"
Select "Business Monitor International (BMI) Industry Reports"

Entrepreneurship Database ( UNC link ; public library link )

Just-Series Market Research Reports in the ProQuest Entrepreneurship Database are another source of industry & market information.

Look under the first heading "Industry and Market Research"
Select "Just-Series Market Research Reports"
Browse by subject, industry, and title

Additional Search Tips for ABI/Inform & Entrepreneurship Databases

In both the ABI/Inform and Entrepreneurship Databases, you can use the Advanced Search page to find additional reports and articles.

For help on any datababase page, click on the question mark circle in the top right corner.

Advanced search features:

Both databases:

Include one or more NAICS codes as search terms

Select document types

Entrepreneurship Database:

Select market segments to narrow your search

Start Here for UNC Library Access

UNC affiliates (students, faculty, staff) can access these databases for industry reports.

General Industry Reports

Get started with these general industry report databases.

IBISWorld Industry Reports Your best bet for finding comprehensive, high-level reports for over 700 U.S. industries, including specialized reports and China. The search screen is very user-friendly: search by keyword to locate relevant reports. Report contents: statistics and analysis on market size, market share of competitors, and industry growth rates, 5-year forecasts, barriers to entry, operating cost structure (industry averages), technology and systems, and domestic and international markets. more... less... Access: Off Campus Access is available for: UNC-Chapel Hill students, faculty, and staff; UNC Hospitals employees; UNC-Chapel Hill affiliated AHEC users.
Mintel Academic Mintel reports give you both industry and market/consumer information. The industries covered by Mintel tend to be more consumer & lifestyle oriented. more... less... Access: Off Campus Access is available for: UNC-Chapel Hill students, faculty, and staff; UNC Hospitals employees; UNC-Chapel Hill affiliated AHEC users. Coverage: 2001 -

Specialized Industry Reports

Sometimes you need analysis that is more specialized than what you find in IBISWorld. Check out these databases for specialized industry reports.

BCC Research Search here to find reports about science and technology focused industries. Many reports include some patent analysis. more... less... Access: Off Campus Access is available for: UNC-Chapel Hill students, faculty, and staff; UNC Hospitals employees; UNC-Chapel Hill affiliated AHEC users.
Euromonitor Passport Search here for international and consumer industries. Reports include analysis for market size, company and brand shares and profiles of leading companies and brands. more... less... Access: Off Campus Access is available for: UNC-Chapel Hill students, faculty, and staff; UNC Hospitals employees; UNC-Chapel Hill affiliated AHEC users. Coverage: Varies. Most data for past few years, some back to 1977.

Localized Industry Reports & Information

Use BizMiner to create custom reports for industries in specific locations. You'll also find industry financial profiles that can help you benchmark your own venture against companies of similar size in your industry. This will help you better understand market trends. Check out the video tutorials from Ohio University and learn to use BizMiner effectively.

BizMiner Localized industry & financial reports for companies. Video tutorials . more... less... Access: Off Campus Access is available for: UNC-Chapel Hill students, faculty, and staff; UNC Hospitals employees; UNC-Chapel Hill affiliated AHEC users. Coverage: Most recent 5 years for Industry Financial Reports, most recent 3 years for Industry Market Reports, most recent year for Competitive Market Analyzer and Retail Sales per Square Foot.

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Trends in electric cars

Executive summary

Electric car sales

Electric car availability and affordability.

Electric two- and three-wheelers
Electric light commercial vehicles
Electric truck and bus sales
Electric heavy-duty vehicle model availability
Charging for electric light-duty vehicles
Charging for electric heavy-duty vehicles
Battery supply and demand
Battery prices
Electric vehicle company strategy and market competition
Electric vehicle and battery start-ups
Vehicle outlook by mode
Vehicle outlook by region
The industry outlook
Light-duty vehicle charging
Heavy-duty vehicle charging
Battery demand
Electricity demand
Oil displacement
Well-to-wheel greenhouse gas emissions
Lifecycle impacts of electric cars

Cite report

IEA (2024), Global EV Outlook 2024 , IEA, Paris https://www.iea.org/reports/global-ev-outlook-2024, Licence: CC BY 4.0

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Nearly one in five cars sold in 2023 was electric.

Electric car sales neared 14 million in 2023, 95% of which were in China, Europe and the United States

Almost 14 million new electric cars 1 were registered globally in 2023, bringing their total number on the roads to 40 million, closely tracking the sales forecast from the 2023 edition of the Global EV Outlook (GEVO-2023). Electric car sales in 2023 were 3.5 million higher than in 2022, a 35% year-on-year increase. This is more than six times higher than in 2018, just 5 years earlier. In 2023, there were over 250 000 new registrations per week, which is more than the annual total in 2013, ten years earlier. Electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022 and only 2% 5 years earlier, in 2018. These trends indicate that growth remains robust as electric car markets mature. Battery electric cars accounted for 70% of the electric car stock in 2023.

Global electric car stock, 2013-2023

While sales of electric cars are increasing globally, they remain significantly concentrated in just a few major markets. In 2023, just under 60% of new electric car registrations were in the People’s Republic of China (hereafter ‘China’), just under 25% in Europe, 2 and 10% in the United States – corresponding to nearly 95% of global electric car sales combined. In these countries, electric cars account for a large share of local car markets: more than one in three new car registrations in China was electric in 2023, over one in five in Europe, and one in ten in the United States. However, sales remain limited elsewhere, even in countries with developed car markets such as Japan and India. As a result of sales concentration, the global electric car stock is also increasingly concentrated. Nevertheless, China, Europe and the United States also represent around two-thirds of total car sales and stocks, meaning that the EV transition in these markets has major repercussions in terms of global trends.

In China, the number of new electric car registrations reached 8.1 million in 2023, increasing by 35% relative to 2022. Increasing electric car sales were the main reason for growth in the overall car market, which contracted by 8% for conventional (internal combustion engine) cars but grew by 5% in total, indicating that electric car sales are continuing to perform as the market matures. The year 2023 was the first in which China’s New Energy Vehicle (NEV) 3 industry ran without support from national subsidies for EV purchases, which have facilitated expansion of the market for more than a decade. Tax exemption for EV purchases and non-financial support remain in place, after an extension , as the automotive industry is seen as one of the key drivers of economic growth. Some province-led support and investment also remains in place and plays an important role in China’s EV landscape. As the market matures, the industry is entering a phase marked by increased price competition and consolidation. In addition, China exported over 4 million cars in 2023, making it the largest auto exporter in the world, among which 1.2 million were EVs. This is markedly more than the previous year – car exports were almost 65% higher than in 2022, and electric car exports were 80% higher. The main export markets for these vehicles were Europe and countries in the Asia Pacific region, such as Thailand and Australia.

In the United States, new electric car registrations totalled 1.4 million in 2023, increasing by more than 40% compared to 2022. While relative annual growth in 2023 was slower than in the preceding two years, demand for electric cars and absolute growth remained strong. The revised qualifications for the Clean Vehicle Tax Credit, alongside electric car price cuts, meant that some popular EV models became eligible for credit in 2023. Sales of the Tesla Model Y, for example, increased 50% compared to 2022 after it became eligible for the full USD 7 500 tax credit. Overall, the new criteria established by the Inflation Reduction Act (IRA) appear to have supported sales in 2023, despite earlier concerns that tighter domestic content requirements for EV and battery manufacturing could create immediate bottlenecks or delays, such as for the Ford F-150 Lightning . As of 2024, new guidance for the tax credits means the number of eligible models has fallen to less than 30 from about 45, 4 including several trim levels of the Tesla Model 3 becoming ineligible. However, in 2023 and 2024, leasing business models enable electric cars to qualify for the tax credits even if they do not fully meet the requirements, as leased cars can qualify for a less strict commercial vehicle tax credit and these tax credit savings can be passed to lease-holders. Such strategies have also contributed to sustained electric car roll-out.

In Europe, new electric car registrations reached nearly 3.2 million in 2023, increasing by almost 20% relative to 2022. In the European Union, sales amounted to 2.4 million, with similar growth rates. As in China, the high rates of electric car sales seen in Europe suggest that growth remains robust as markets mature, and several European countries reached important milestones in 2023. Germany, for example, became the third country after China and the United States to record half a million new battery electric car registrations in a single year, with 18% of car sales being battery electric (and another 6% plug-in hybrid).

However, the phase-out of several purchase subsidies in Germany slowed overall EV sales growth. At the start of 2023, PHEV subsidies were phased out, resulting in lower PHEV sales compared to 2022, and in December 2023, all EV subsidies ended after a ruling on the Climate and Transformation Fund. In Germany, the sales share for electric cars fell from 30% in 2022 to 25% in 2023. This had an impact on the overall electric car sales share in the region. In the rest of Europe, however, electric car sales and their sales share increased. Around 25% of all cars sold in France and the United Kingdom were electric, 30% in the Netherlands, and 60% in Sweden. In Norway, sales shares increased slightly despite the overall market contracting, and its sales share remains the highest in Europe, at almost 95%.

Electric car registrations and sales share in China, United States and Europe, 2018-2023

Sales in emerging markets are increasing, albeit from a low base, led by southeast asia and brazil.

Electric car sales continued to increase in emerging market and developing economies (EMDEs) outside China in 2023, but they remained low overall. In many cases, personal cars are not the most common means of passenger transport, especially compared with shared vans and minibuses, or two- and three-wheelers (2/3Ws), which are more prevalent and more often electrified, given their relative accessibility and affordability. The electrification of 2/3Ws and public or shared mobility will be key to achieve emissions reductions in such cases (see later sections in this report). While switching from internal combustion engine (ICE) to electric cars is important, the effect on overall emissions differs depending on the mode of transport that is displaced. Replacing 2/3Ws, public and shared mobility or more active forms of transport with personal cars may not be desirable in all cases.

In India, electric car registrations were up 70% year-on-year to 80 000, compared to a growth rate of under 10% for total car sales. Around 2% of all cars sold were electric. Purchase incentives under the Faster Adoption and Manufacturing of Electric Vehicles (FAME II) scheme, supply-side incentives under the Production Linked Incentive (PLI) scheme, tax benefits and the Go Electric campaign have all contributed to fostering demand in recent years. A number of new models also became popular in 2023, such as Mahindra’s XUV400, MG’s Comet, Citroën’s e-C3, BYD’s Yuan Plus, and Hyundai’s Ioniq 5, driving up growth compared to 2022. However, if the forthcoming FAME III scheme includes a subsidy reduction, as has been speculated in line with lower subsidy levels in the 2024 budget, future growth could be affected. Local carmakers have thus far maintained a strong foothold in the market, supported by advantageous import tariffs , and account for 80% of electric car sales in cumulative terms since 2010, led by Tata (70%) and Mahindra (10%).

In Thailand, electric car registrations more than quadrupled year-on-year to nearly 90 000, reaching a notable 10% sales share – comparable to the share in the United States. This is all the more impressive given that overall car sales in the country decreased from 2022 to 2023. New subsidies, including for domestic battery manufacturing, and lower import and excise taxes, combined with the growing presence of Chinese carmakers , have contributed to rapidly increasing sales. Chinese companies account for over half the sales to date, and they could become even more prominent given that BYD plans to start operating EV production facilities in Thailand in 2024, with an annual production capacity of 150 000 vehicles for an investment of just under USD 500 million . Thailand aims to become a major EV manufacturing hub for domestic and export markets, and is aiming to attract USD 28 billion in foreign investment within 4 years, backed by specific incentives to foster investment.

In Viet Nam, after an exceptional 2022 for the overall car market, car sales contracted by 25% in 2023, but electric car sales still recorded unprecedented growth: from under 100 in 2021, to 7 000 in 2022, and over 30 000 in 2023, reaching a 15% sales share. Domestic front-runner VinFast, established in 2017, accounted for nearly all domestic sales. VinFast also started selling electric sports utility vehicles (SUVs) in North America in 2023, as well as developing manufacturing facilities in order to unlock domestic content-linked subsidies under the US IRA. VinFast is investing around USD 2 billion and targets an annual production of 150 000 vehicles in the United States by 2025. The company went public in 2023, far exceeding expectations with a debut market valuation of around USD 85 billion, well beyond General Motors (GM) (USD 46 billion), Ford (USD 48 billion) or BMW (USD 68 billion), before it settled back down around USD 20 billion by the end of the year. VinFast also looks to enter regional markets, such as India and the Philippines .

In Malaysia, electric car registrations more than tripled to 10 000, supported by tax breaks and import duty exemptions, as well as an acceleration in charging infrastructure roll-out. In 2023, Mercedes-Benz marketed the first domestically assembled EV, and both BYD and Tesla also entered the market.

In Latin America, electric car sales reached almost 90 000 in 2023, with markets in Brazil, Colombia, Costa Rica and Mexico leading the region. In Brazil, electric car registrations nearly tripled year-on-year to more than 50 000, a market share of 3%. Growth in Brazil was underpinned by the entry of Chinese carmakers, such as BYD with its Song and Dolphin models, Great Wall with its H6, and Chery with its Tiggo 8, which immediately ranked among the best-selling models in 2023. Road transport electrification in Brazil could bring significant climate benefits given the largely low-emissions power mix, as well as reducing local air pollution. However, EV adoption has been slow thus far, given the national prioritisation of ethanol-based fuels since the late 1970s as a strategy to maintain energy security in the face of oil shocks. Today, biofuels are important alternative fuels available at competitive cost and aligned with the existing refuelling infrastructure. Brazil remains the world’s largest producer of sugar cane, and its agribusiness represents about one-fourth of GDP. At the end of 2023, Brazil launched the Green Mobility and Innovation Programme , which provides tax incentives for companies to develop and manufacture low-emissions road transport technology, aggregating to more than BRA 19 billion (Brazilian reals) (USD 3.8 billion) over the 2024-2028 period. Several major carmakers already in Brazil are developing hybrid ethanol-electric models as a result. China’s BYD and Great Wall are also planning to start domestic manufacturing, counting on local battery metal deposits, and plan to sell both fully electric and hybrid ethanol-electric models. BYD is investing over USD 600 million in its electric car plant in Brazil – its first outside Asia – for an annual capacity of 150 000 vehicles. BYD also partnered with Raízen to develop charging infrastructure in eight Brazilian cities starting in 2024. GM, on the other hand, plans to stop producing ICE (including ethanol) models and go fully electric, notably to produce for export markets. In 2024, Hyundai announced investments of USD 1.1 billion to 2032 to start local manufacturing of electric, hybrid and hydrogen cars.

In Mexico, electric car registrations were up 80% year-on-year to 15 000, a market share just above 1%. Given its proximity to the United States, Mexico’s automotive market is already well integrated with North American partners, and benefits from advantageous trade agreements, large existing manufacturing capacity, and eligibility for subsidies under the IRA. As a result, local EV supply chains are developing quickly, with expectations that this will spill over into domestic markets. Tesla, Ford, Stellantis, BMW, GM, Volkswagen (VW) and Audi have all either started manufacturing or announced plans to manufacture EVs in Mexico. Chinese carmakers such as BYD, Chery and SAIC are also considering expanding to Mexico. Elsewhere in the region, Colombia and Costa Rica are seeing increasing electric car sales, with around 6 000 and 5 000 in 2023, respectively, but sales remain limited in other Central and South American countries.

Throughout Africa, Eurasia and the Middle East, electric cars are still rare, accounting for less than 1% of total car sales. However, as Chinese carmakers look for opportunities abroad, new models – including those produced domestically – could boost EV sales. For example, in Uzbekistan , BYD set up a joint venture with UzAuto Motors in 2023 to produce 50 000 electric cars annually, and Chery International established a partnership with ADM Jizzakh. This partnership has already led to a steep increase in electric car sales in Uzbekistan, reaching around 10 000 in 2023. In the Middle East, Jordan boasts the highest electric car sales share, at more than 45%, supported by much lower import duties relative to ICE cars, followed by the United Arab Emirates, with 13%.

Strong electric car sales in the first quarter of 2024 surpass the annual total from just four years ago

Electric car sales remained strong in the first quarter of 2024, surpassing those of the same period in 2023 by around 25% to reach more than 3 million. This growth rate was similar to the increase observed for the same period in 2023 compared to 2022. The majority of the additional sales came from China, which sold about half a million more electric cars than over the same period in 2023. In relative terms, the most substantial growth was observed outside of the major EV markets, where sales increased by over 50%, suggesting that the transition to electromobility is picking up in an increasing number of countries worldwide.

Quarterly electric car sales by region, 2021-2024

From January to March of this year, nearly 1.9 million electric cars were sold in China, marking an almost 35% increase compared to sales in the first quarter of 2023. In March, NEV sales in China surpassed a share of 40% in overall car sales for the first time, according to retail sales reported by the China Passenger Car Association. As witnessed in 2023, sales of plug-in hybrid electric cars are growing faster than sales of pure battery electric cars. Plug-in hybrid electric car sales in the first quarter increased by around 75% year-on-year in China, compared to just 15% for battery electric car sales, though the former started from a lower base.

In Europe, the first quarter of 2024 saw year-on-year growth of over 5%, slightly above the growth in overall car sales and thereby stabilising the EV sales share at a similar level as last year. Electric car sales growth was particularly high in Belgium, where around 60 000 electric cars were sold, almost 35% more than the year before. However, Belgium represents less than 5% of total European car sales. In the major European markets – France, Germany, Italy and the United Kingdom (together representing about 60% of European car sales) – growth in electric car sales was lower. In France, overall EV sales in the first quarter grew by about 15%, with BEV sales growth being higher than for PHEVs. While this is less than half the rate as over the same period last year, total sales were nonetheless higher and led to a slight increase in the share of EVs in total car sales. The United Kingdom saw similar year-on-year growth (over 15%) in EV sales as France, about the same rate as over the same period last year. In Germany, where battery electric car subsidies ended in 2023, sales of electric cars fell by almost 5% in the first quarter of 2024, mainly as a result of a 20% year-on-year decrease in March. The share of EVs in total car sales was therefore slightly lower than last year. As in China, PHEV sales in both Germany and the United Kingdom were stronger than BEV sales. In Italy, sales of electric cars in the first three months of 2024 were more than 20% lower than over the same period in 2023, with the majority of the decrease taking place in the PHEV segment. However, this trend could be reversed based on the introduction of a new incentive scheme , and if Chinese automaker Chery succeeds in appealing to Italian consumers when it enters the market later this year.

In the United States, first-quarter sales reached around 350 000, almost 15% higher than over the same period the year before. As in other major markets, the sales growth of PHEVs was even higher, at 50%. While the BEV sales share in the United States appears to have fallen somewhat over the past few months, the sales share of PHEVs has grown.

In smaller EV markets, sales growth in the first months of 2024 was much higher, albeit from a low base. In January and February, electric car sales almost quadrupled in Brazil and increased more than sevenfold in Viet Nam. In India, sales increased more than 50% in the first quarter of 2024. These figures suggest that EVs are gaining momentum across diverse markets worldwide.

Since 2021, first-quarter electric car sales have typically accounted for 15-20% of the total global annual sales. Based on this observed trend, coupled with policy momentum and the seasonality that EV sales typically experience, we estimate that electric car sales could reach around 17 million in 2024. This indicates robust growth for a maturing market, with 2024 sales to surpass those of 2023 by more than 20% and EVs to reach a share in total car sales of more than one-fifth.

Electric car sales, 2012-2024

The majority of the additional 3 million electric car sales projected for 2024 relative to 2023 are from China. Despite the phase-out of NEV purchase subsidies last year, sales in China have remained robust, indicating that the market is maturing. With strong competition and relatively low-cost electric cars, sales are to grow by almost 25% in 2024 compared to last year, reaching around 10 million. If confirmed, this figure will come close to the total global electric car sales in 2022. As a result, electric car sales could represent around 45% of total car sales in China over 2024.

In 2024, electric car sales in the United States are projected to rise by 20% compared to the previous year, translating to almost half a million more sales, relative to 2023. Despite reporting of a rocky end to 2023 for electric cars in the United States, sales shares are projected to remain robust in 2024. Over the entire year, around one in nine cars sold are expected to be electric.

Based on recent trends, and considering that tightening CO 2 targets are due to come in only in 2025, the growth in electric car sales in Europe is expected to be the lowest of the three largest markets. Sales are projected to reach around 3.5 million units in 2024, reflecting modest growth of less than 10% compared to the previous year. In the context of a generally weak outlook for passenger car sales, electric cars would still represent about one in four cars sold in Europe.

Outside of the major EV markets, electric car sales are anticipated to reach the milestone of over 1 million units in 2024, marking a significant increase of over 40% compared to 2023. Recent trends showing the success of both homegrown and Chinese electric carmakers in Southeast Asia underscore that the region is set to make a strong contribution to the sales of emerging EV markets (see the section on Trends in the electric vehicle industry). Despite some uncertainty surrounding whether India’s forthcoming FAME III scheme will include subsidies for electric cars, we expect sales in India to remain robust, and to experience around 50% growth compared to 2023. Across all regions outside the three major EV markets, electric car sales are expected to represent around 5% of total car sales in 2024, which – considering the high growth rates seen in recent years – could indicate that a tipping point towards global mass adoption is getting closer.

There are of course downside risks to the 2024 outlook for electric car sales. Factors such as high interest rates and economic uncertainty could potentially reduce the growth of global electric car sales in 2024. Other challenges may come from the IRA restrictions on US electric car tax incentives, and the tightening of technical requirements for EVs to qualify for the purchase tax exemption in China. However, there are also upside potentials to consider. New markets may open up more rapidly than anticipated, as automakers expand their EV operations and new entrants compete for market share. This could lead to accelerated growth in electric car sales globally, surpassing the initial estimations.

More electric models are becoming available, but the trend is towards larger ones

The number of available electric car models nears 600, two-thirds of which are large vehicles and SUVs

In 2023, the number of available models for electric cars increased 15% year-on-year to nearly 590, as carmakers scaled up electrification plans, seeking to appeal to a growing consumer base. Meanwhile, the number of fully ICE models (i.e. excluding hybrids) declined for the fourth consecutive year, at an average of 2%. Based on recent original equipment manufacturer (OEM) announcements, the number of new electric car models could reach 1 000 by 2028. If all announced new electric models actually reach the market, and if the number of available ICE car models continues to decline by 2% annually, there could be as many electric as ICE car models before 2030.

As reported in GEVO-2023, the share of small and medium electric car models is decreasing among available electric models: in 2023, two-thirds of the battery-electric models on the market were SUVs, 5 pick-up trucks or large cars. Just 25% of battery electric car sales in the United States were for small and medium models, compared to 40% in Europe and 50% in China. Electric cars are following the same trend as conventional cars, and getting bigger on average. In 2023, SUVs, pick-up trucks and large models accounted for 65% of total ICE car sales worldwide, and more than 80% in the United States, 60% in China and 50% in Europe.

Several factors underpin the increase in the share of large models. Since the 2010s, conventional SUVs in the United States have benefited from less stringent tailpipe emissions rules than smaller models, creating an incentive for carmakers to market more vehicles in that segment. Similarly, in the European Union, CO 2 targets for passenger cars have included a compromise on weight, allowing CO 2 leeway for heavier vehicles in some cases. Larger vehicles also mean larger margins for carmakers. Given that incumbent carmakers are not yet making a profit on their EV offer in many cases, focusing on larger models enables them to increase their margins. Under the US IRA, electric SUVs can qualify for tax credits as long as they are priced under USD 80 000, whereas the limit stands at USD 55 000 for a sedan, creating an incentive to market SUVs if a greater margin can be gathered. On the demand side, there is now strong willingness to pay for SUVs or large models. Consumers are typically interested in longer-range and larger cars for their primary vehicles, even though small models are more suited to urban use. Higher marketing spend on SUVs compared to smaller models can also have an impact on consumer choices.

The progressive shift towards ICE SUVs has been dramatically limiting fuel savings. Over the 2010-2022 period, without the shift to SUVs, energy use per kilometre could have fallen at an average annual rate 30% higher than the actual rate. Switching to electric in the SUV and larger car segments can therefore achieve immediate and significant CO 2 emissions reductions, and electrification also brings considerable benefits in terms of reducing air pollution and non-tailpipe emissions, especially in urban settings. In 2023, if all ICE and HEV sales of SUVs had instead been BEV, around 770 Mt CO 2 could have been avoided globally over the cars’ lifetimes (see section 10 on lifecycle analysis). This is equivalent to the total road emissions of China in 2023.

Breakdown of battery electric car sales in selected countries and regions by segment, 2018-2023

Nevertheless, from a policy perspective, it is critical to mitigate the negative spillovers associated with an increase in larger electric cars in the fleet.

Larger electric car models have a significant impact on battery supply chains and critical mineral demand. In 2023, the sales-weighted average battery electric SUV in Europe had a battery almost twice as large as the one in the average small electric car, with a proportionate impact on critical mineral needs. Of course, the range of small cars is typically shorter than SUVs and large cars (see later section on ranges). However, when comparing electric SUVs and medium-sized electric cars, which in 2023 offered a similar range, the SUV battery was still 25% larger. This means that if all electric SUVs sold in 2023 had instead been medium-sized cars, around 60 GWh of battery equivalent could have been avoided globally, with limited impact on range. Accounting for the different chemistries used in China, Europe, and the United States, this would be equivalent to almost 6 000 tonnes of lithium, 30 000 tonnes of nickel, almost 7 000 tonnes of cobalt, and over 8 000 tonnes of manganese.

Larger batteries also require more power, or longer charging times. This can put pressure on electricity grids and charging infrastructure by increasing occupancy, which could create issues during peak utilisation, such as at highway charging points at high traffic times.

In addition, larger vehicles also require greater quantities of materials such as iron and steel, aluminium and plastics, with a higher environmental and carbon footprint for materials production, processing and assembly. Because they are heavier, larger models also have higher electricity consumption. The additional energy consumption resulting from the increased mass is mitigated by regenerative braking to some extent, but in 2022, the sales-weighted average electricity consumption of electric SUVs was 20% higher than that of other electric cars. 6

Major carmakers have announced launches of smaller and more affordable electric car models over the past few years. However, when all launch announcements are considered, far fewer smaller models are expected than SUVs, large models and pick-up trucks. Only 25% of the 400+ launches expected over the 2024-2028 period are small and medium models, which represents a smaller share of available models than in 2023. Even in China, where small and medium models have been popular, new launches are typically for larger cars.

Number of available car models in 2023 and expected new ones by powertrain, country or region and segment, 2024-2028

Several governments have responded by introducing policies to create incentives for smaller and lighter passenger cars. In Norway, for example, all cars are subject to a purchase tax based on weight, CO 2 and nitrogen oxides (NO x ) emissions, though electric cars were exempt from the weight-based tax prior to 2023. Any imported cars weighing more than 500 kg must also pay an entry fee for each additional kg. In France, a progressive weight-based tax applies to ICE and PHEV cars weighing above 1 600 kg, with a significant impact on price: weight tax for a Land Rover Defender 130 (2 550 kg) adds up to more than EUR 21 500, versus zero for a Renault Clio (1 100 kg). Battery electric cars have been exempted to date. In February 2024, a referendum held in Paris resulted in a tripling of city parking fees for visiting SUVs, applicable to ICE, hybrid and plug-in hybrid cars above 1 600 kg and battery electric ones above 2 000 kg, in an effort to limit the use of large and/or polluting vehicles. Other examples exist in Estonia, Finland, Switzerland and the Netherlands. A number of policy options may be used, such as caps and fleet averages for vehicle footprint, weight, and/or battery size; access to finance for smaller vehicles; and sustained support for public charging, enabling wider use of shorter-range cars.

Average range is increasing, but only moderately

Concerns about range compared to ICE vehicles, and about the availability of charging infrastructure for long-distance journeys, also contribute to increasing appetite for larger models with longer range.

With increasing battery size and improvements in battery technology and vehicle design, the sales-weighted average range of battery electric cars grew by nearly 75% between 2015 and 2023, although trends vary by segment. The average range of small cars in 2023 – around 150 km – is not much higher than it was in 2015, indicating that this range is already well suited for urban use (with the exception of taxis, which have much higher daily usage). Large, higher-end models already offered higher ranges than average in 2015, and their range has stagnated through 2023, averaging around 360-380 km. Meanwhile, significant improvements have been made for medium-sized cars and SUVs, the range of which now stands around 380 km, whereas it averaged around 150 km for medium cars and 270 km for SUVs in 2015. This is encouraging for consumers looking to purchase an electric car for longer journeys rather than urban use.

Since 2020, growth in the average range of vehicles has been slower than over the 2015-2020 period. This could result from a number of factors, including fluctuating battery prices, carmakers’ attempts to limit additional costs as competition intensifies, and technical constraints (e.g. energy density, battery size). It could also reflect that beyond a certain range at which most driving needs are met, consumers’ willingness to pay for a marginal increase in battery size and range is limited. Looking forward, however, the average range could start increasing again as novel battery technologies mature and prices fall.

More affordable electric cars are needed to reach a mass-market tipping point

An equitable and inclusive transition to electric mobility, both within countries and at the global level, hinges on the successful launch of affordable EVs (including but not limited to electric cars). In this section, we use historic sales and price data for electric and ICE models around the world to examine the total cost of owning an electric car, price trends over time, and the remaining electric premium, by country and vehicle size. 7 Specific models are used for illustration.

Total cost of ownership

Car purchase decisions typically involve consideration of retail price and available subsidies as well as lifetime operating costs, such as fuel costs, insurance, maintenance and depreciation, which together make up the total cost of ownership (TCO). Reaching TCO parity between electric and ICE cars creates important financial incentives to make the switch. This section examines the different components of the TCO, by region and car size.

In 2023, upfront retail prices for electric cars were generally higher than for their ICE equivalents, which increased their TCO in relative terms. On the upside, higher fuel efficiency and lower maintenance costs enable fuel cost savings for electric cars, lowering their TCO. This is especially true in periods when fuel prices are high, in places where electricity prices are not too closely correlated to fossil fuel prices. Depreciation is also a major factor in determining TCO: As a car ages, it loses value, and depreciation for electric cars tends to be faster than for ICE equivalents, further increasing their TCO. Accelerated depreciation could, however, prove beneficial for the development of second-hand markets.

However, the trend towards faster depreciation for electric vehicles might be reversed for multiple reasons. Firstly, consumers are gaining more confidence in electric battery lifetimes, thereby increasing the resale value of EVs. Secondly, strong demand and the positive brand image of some BEV models can mean they hold their value longer, as shown by Tesla models depreciating more slowly than the average petrol car in the United States. Finally, increasing fuel prices in some regions, the roll-out of low-emissions zones that restrict access for the most polluting vehicles, and taxes and parking fees specifically targeted at ICE vehicles could mean they experience faster depreciation rates than EVs in the future. In light of these two possible opposing depreciation trends, the same fixed annual depreciation rate for both BEVs and ICE vehicles has been applied in the following cost of ownership analysis.

Subsidies help lower the TCO of electric cars relative to ICE equivalents in multiple ways. A purchase subsidy lowers the original retail price, thereby lowering capital depreciation over time, and a lower retail price implies lower financing costs through cumulative interest. Subsidies can significantly reduce the number of years required to reach TCO parity between electric and ICE equivalents. As of 2022, we estimate that TCO parity could be reached in most cases in under 7 years in the three major EV markets, with significant variations across different car sizes. In comparison, for models purchased at 2018 prices, TCO parity was much harder to achieve.

In Germany, for example, we estimate that the sales-weighted average price of a medium-sized battery electric car in 2022 was 10-20% more expensive than its ICE equivalent, but 10-20% cheaper in cumulative costs of ownership after 5 years, thanks to fuel and maintenance costs savings. In the case of an electric SUV, we estimate that the average annual operating cost savings would amount to USD 1 800 when compared to the equivalent conventional SUV over a period of 10 years. In the United States, despite lower fuel prices with respect to electricity, the higher average annual mileage results in savings that are close to Germany at USD 1 600 per year. In China, lower annual distance driven reduces fuel cost savings potential, but the very low price of electricity enables savings of about USD 1 000 per year.

In EMDEs, some electric cars can also be cheaper than ICE equivalents over their lifetime. This is true in India , for example, although it depends on the financing instrument. Access to finance is typically much more challenging in EMDEs due to higher interest rates and the more limited availability of cheap capital. Passenger cars have also a significantly lower market penetration in the first place, and many car purchases are made in second-hand markets. Later sections of this report look at markets for used electric cars, as well as the TCO for electric and conventional 2/3Ws in EMDEs, where they are far more widespread than cars as a means of road transport.

Upfront retail price parity

Achieving price parity between electric and ICE cars will be an important tipping point. Even when the TCO for electric cars is advantageous, the upfront retail price plays a decisive role, and mass-market consumers are typically more sensitive to price premiums than wealthier buyers. This holds true not only in emerging and developing economies, which have comparatively high costs of capital and comparatively low household and business incomes, but also in advanced economies. In the United States, for example, surveys suggest affordability was the top concern for consumers considering EV adoption in 2023. Other estimates show that even among SUV and pick-up truck consumers, only 50% would be willing to purchase one above USD 50 000.

In this section, we examine historic price trends for electric and ICE cars over the 2018-2022 period, by country and car size, and for best-selling models in 2023.

Electric cars are generally getting cheaper as battery prices drop, competition intensifies, and carmakers achieve economies of scale. In most cases, however, they remain on average more expensive than ICE equivalents. In some cases, after adjusting for inflation, their price stagnated or even moderately increased between 2018 and 2022.

Larger batteries for longer ranges increase car prices, and so too do the additional options, equipment, digital technology and luxury features that are often marketed on top of the base model. A disproportionate focus on larger, premium models is pushing up the average price, which – added to the lack of available models in second-hand markets (see below) – limits potential to reach mass-market consumers. Importantly, geopolitical tension, trade and supply chain disruptions, increasing battery prices in 2022 relative to 2021, and rising inflation, have also significantly affected the potential for further cost declines.

Competition can also play an important role in bringing down electric car prices. Intensifying competition leads carmakers to cut prices to the minimum profit margin they can sustain, and – if needed – to do so more quickly than battery and production costs decline. For example, between mid-2022 and early-2024, Tesla cut the price of its Model Y from between USD 65 000 and USD 70 000 to between USD 45 000 and USD 55 000 in the United States. Battery prices for such a model dropped by only USD 3 000 over the same period in the United States, suggesting that a profit margin may still be made at a lower price. Similarly, in China, the price of the Base Model Y dropped from CNY 320 000 (Yuan renminbi) (USD 47 000) to CNY 250 000 (USD 38 000), while the corresponding battery price fell by only USD 1 000. Conversely, in cases where electric models remain niche or aimed at wealthier, less price-sensitive early adopters, their price may not fall as quickly as battery prices, if carmakers can sustain greater margins.

Price gap between the sales-weighted average price of conventional and electric cars in selected countries, before subsidy, by size, in 2018 and 2022

In China, where the sales share of electric cars has been high for several years, the sales-weighted average price of electric cars (before purchase subsidy) is already lower than that of ICE cars. This is true not only when looking at total sales, but also at the small cars segment, and is close for SUVs. After accounting for the EV exemption from the 10% vehicle purchase tax, electric SUVs were already on par with conventional ones in 2022, on average.

Electric car prices have dropped significantly since 2018. We estimate that around 55% of the electric cars sold in China in 2022 were cheaper than their average ICE equivalent, up from under 10% in 2018. Given the further price declines between 2022 and 2023, we estimate that this share increased to around 65% in 2023. These encouraging trends suggest that price parity between electric and ICE cars could also be reached in other countries in certain segments by 2030, if the sales share of electric cars continues to grow, and if supporting infrastructure – such as for charging – is sustained.

As reported in detail in GEVO-2023 , China remains a global exception in terms of available inexpensive electric models. Local carmakers already market nearly 50 small, affordable electric car models, many of which are priced under CNY 100 000 (USD 15 000). This is in the same range as best-selling small ICE cars in 2023, which cost from CNY 70 000 to CNY 100 000. In 2022, the best-selling electric car was SAIC’s small Wuling Hongguang Mini EV, which accounted for 10% of all BEV sales. It was priced around CNY 40 000, weighing under 700 kg for a 170-km range. In 2023, however, it was overtaken by Tesla models, among other larger models, as new consumers seek longer ranges and higher-end options and digital equipment.

United States

In the United States, the sales-weighted average price of electric cars decreased over the 2018-2022 period, primarily driven by a considerable drop in the price of Tesla cars, which account for a significant share of sales. The sales-weighted average retail price of electric SUVs fell slightly more quickly than the average SUV battery costs over the same period. The average price of small and medium models also decreased, albeit to a smaller extent.

Across all segments, electric models remained more expensive than conventional equivalents in 2022. However, the gap has since begun to close, as market size increases and competition leads carmakers to cut prices. For example, in 2023-2024, Tesla’s Model 3 could be found in the USD 39 000 to USD 42 000 range, which is comparable to the average price for new ICE cars, and a new Model Y priced under USD 50 000 was launched. Rivian is expecting to launch its R2 SUV in 2026 at USD 45 000, which is much less than previous vehicles. Average price parity between electric and conventional SUVs could be reached by 2030, but it may only be reached later for small and medium cars, given their lower availability and popularity.

Smaller, cheaper electric models have further to go to reach price parity in the United States. We estimate that in 2022, only about 5% of the electric cars sold in the United States were cheaper than their average ICE equivalent. In 2023, the cheapest electric cars were priced around USD 30 000 (e.g. Chevrolet Bolt, Nissan Leaf, Mini Cooper SE). To compare, best-selling small ICE options cost under USD 20 000 (e.g. Kia Rio, Mitsubishi Mirage), and many best-selling medium ICE options between USD 20 000 and USD 25 000 (e.g. Honda Civic, Toyota Corolla, Kia Forte, Hyundai Avante, Nissan Sentra).

Around 25 new all-electric car models are expected in 2024, but only 5 of them are expected below USD 50 000, and none under the USD 30 000 mark. Considering all the electric models expected to be available in 2024, about 75% are priced above USD 50 000, and fewer than 10 under USD 40 000, even after taking into account the USD 7 500 tax credit under the IRA for eligible cars as of February 2024. This means that despite the tax credit, few electric car models directly compete with small mass-market ICE models.

In December 2023, GM stopped production of its best-selling electric car, the Bolt, announcing it would introduce a new version in 2025. The Nissan Leaf (40 kWh) therefore remains the cheapest available electric car in 2024, at just under USD 30 000, but is not yet eligible for IRA tax credits. Ford announced in 2024 that it would move away from large and expensive electric cars as a way to convince more consumers to switch to electric, at the same time as increasing output of ICE models to help finance a transition to electric mobility. In 2024, Tesla announced it would start producing a next-generation, compact and affordable electric car in June 2025, but the company had already announced in 2020 that it would deliver a USD 25 000 model within 3 years. Some micro urban electric cars are already available between USD 5 000 and USD 20 000 (e.g. Arcimoto FUV, Nimbus One), but they are rare. In theory, such models could cover many use cases, since 80% of car journeys in the United States are under 10 miles .

Pricing trends differ across European countries, and typically vary by segment.

In Norway, after taking into account the EV sales tax exemption, electric cars are already cheaper than ICE equivalents across all segments. In 2022, we estimate that the electric premium stood around -15%, and even -30% for medium-sized cars. Five years earlier, in 2018, the overall electric premium was less advantageous, at around -5%. The progressive reintroduction of sales taxes on electric cars may change these estimates for 2023 onwards.

Germany’s electric premium ranks among the lowest in the European Union. Although the sales-weighted average electric premium increased slightly between 2018 and 2022, it stood at 15% in 2022. It is particularly low for medium-sized cars (10-15%) and SUVs (20%), but remains higher than 50% for small models. In the case of medium cars, the sales-weighted average electric premium was as low as EUR 5 000 in 2022. We estimate that in 2022, over 40% of the medium electric cars sold in Germany were cheaper than their average ICE equivalent. Looking at total sales, over 25% of the electric cars sold in 2022 were cheaper than their average ICE equivalent. In 2023, the cheapest models among the best-selling medium electric cars were priced between EUR 22 000 and EUR 35 000 (e.g. MG MG4, Dacia Spring, Renault Megane), far cheaper than the three front-runners priced above EUR 45 000 (VW ID.3, Cupra Born, and Tesla Model 3). To compare, best-selling ICE cars in the medium segment were also priced between EUR 30 000 and EUR 45 000 (e.g. VW Golf, VW Passat Santana, Skoda Octavia Laura, Audi A3, Audi A4). At the end of 2023, Germany phased out its subsidy for electric car purchases, but competition and falling model prices could compensate for this.

In France, the sales-weighted average electric premium stagnated between 2018 and 2022. The average price of ICE cars also increased over the same period, though more moderately than that of electric models. Despite a drop in the price of electric SUVs, which stood at a 30% premium over ICE equivalents in 2022, the former do not account for a high enough share of total electric car sales to drive down the overall average. The electric premium for small and medium cars remains around 40-50%.

These trends mirror those of some of the best-selling models. For example, when adjusting prices for inflation, the small Renault Zoe was sold at the same price on average in 2022-2023 as in 2018-2019, or EUR 30 000 (USD 32 000). It could be found for sale at as low as EUR 25 000 in 2015-2016. The earlier models, in 2015, had a battery size of around 20 kWh, which increased to around 40 kWh in 2018‑2019 and 50 kWh in newer models in 2022-2023. Yet European battery prices fell more quickly than the battery size increased over the same period, indicating that battery size alone does not explain car price dynamics.

In 2023, the cheapest electric cars in France were priced between EUR 22 000 and EUR 30 000 (e.g. Dacia Spring, Renault Twingo E-Tech, Smart EQ Fortwo), while best-selling small ICE models were available between EUR 10 000 and EUR 20 000 (e.g. Renault Clio, Peugeot 208, Citroën C3, Dacia Sandero, Opel Corsa, Skoda Fabia). Since mid-2024, subsidies of up to EUR 4 000 can be granted for electric cars priced under EUR 47 000, with an additional subsidy of up to EUR 3 000 for lower-income households.

In the United Kingdom, the sales-weighted average electric premium shrank between 2018 and 2022, thanks to a drop in prices for electric SUVs, as in the United States. Nonetheless, electric SUVs still stood at a 45% premium over ICE equivalents in 2022, which is similar to the premium for small models but far higher than for medium cars (20%).

In 2023, the cheapest electric cars in the United Kingdom were priced from GBP 27 000 to GBP 30 000 (USD 33 000 to 37 000) (e.g. MG MG4, Fiat 500, Nissan Leaf, Renault Zoe), with the exception of the Smart EQ Fortwo, priced at GBP 21 000. To compare, best-selling small ICE options could be found from GBP 10 000 to 17 000 (e.g. Peugeot 208, Fiat 500, Dacia Sandero) and medium options below GBP 25 000 (e.g. Ford Puma). Since July 2022, there has been no subsidy for the purchase of electric passenger cars.

Elsewhere in Europe, electric cars remain typically much more expensive than ICE equivalents. In Poland , for example, just a few electric car models could be found at prices competitive with ICE cars in 2023, under the PLN 150 000 (Polish zloty) (EUR 35 000) mark. Over 70% of electric car sales in 2023 were for SUVs, or large or more luxurious models, compared to less than 60% for ICE cars.

In 2023, there were several announcements by European OEMs for smaller models priced under EUR 25 000 in the near-term (e.g. Renault R5, Citroën e-C3, Fiat e-Panda, VW ID.2all). There is also some appetite for urban microcars (i.e. L6-L7 category), learning from the success of China’s Wuling. Miniature models bring important benefits if they displace conventional models, helping reduce battery and critical mineral demand. Their prices are often below USD 5 000 (e.g. Microlino, Fiat Topolino, Citroën Ami, Silence S04, Birò B2211).

In Europe and the United States, electric car prices are expected to come down as a result of falling battery prices, more efficient manufacturing, and competition. Independent analyses suggest that price parity between some electric and ICE car models in certain segments could be reached over the 2025-2028 period, for example for small electric cars in Europe in 2025 or soon after. However, many market variables could delay price parity, such as volatile commodity prices, supply chain bottlenecks, and the ability of carmakers to yield sufficient margins from cheaper electric models. The typical rule in which economies of scale bring down costs is being complicated by numerous other market forces. These include a dynamic regulatory context, geopolitical competition, domestic content incentives, and a continually evolving technology landscape, with competing battery chemistries that each have their own economies of scale and regional specificities.

Japan is a rare example of an advanced economy where small models – both for electric and ICE vehicles – appeal to a large consumer base, motivated by densely populated cities with limited parking space, and policy support. In 2023, about 60% of total ICE sales were for small models, and over half of total electric sales. Two electric cars from the smallest “Kei” category, the Nissan Sakura and Mitsubishi eK-X, accounted for nearly 50% of national electric car sales alone, and both are priced between JPY 2.3 million (Japanese yen) and JPY 3 million (USD 18 000 to USD 23 000). However, this is still more expensive than best-selling small ICE cars (e.g. Honda N Box, Daihatsu Hijet, Daihatsu Tanto, Suzuki Spacia, Daihatsu Move), priced between USD 13 000 and USD 18 000. In 2024, Nissan announced that it would aim to reach cost parity (of production, not retail price) between electric and ICE cars by 2030.

Emerging market and developing economies

In EMDEs, the absence of small and cheaper electric car models is a significant hindrance to wider market uptake. Many of the available car models are SUVs or large models, targeting consumers of high-end goods, and far too expensive for mass-market consumers, who often do not own a personal car in the first place (see later sections on second-hand car markets and 2/3Ws).

In India, while Tata’s small Tiago/Tigor models, which are priced between USD 10 000 and USD 15 000, accounted for about 20% of total electric car sales in 2023, the average best-selling small ICE car is priced around USD 7 000. Large models and SUVs accounted for over 65% of total electric car sales. While BYD announced in 2023 the goal of accounting for 40% of India’s EV market by 2030, all of its models available in India cost more than INR 3 million (Indian rupees) (USD 37 000), including the Seal, launched in 2024 for INR 4.1 million (USD 50 000).

Similarly, SUVs and large models accounted for the majority share of electric car sales in Thailand (60%), Indonesia (55%), Malaysia (over 85%) and Viet Nam (over 95%). In Indonesia, for example, Hyundai’s Ionic 5 was the most popular electric car in 2023, priced at around USD 50 000. Looking at launch announcements, most new models expected over the 2024-2028 period in EMDEs are SUVs or large models. However, more than 50 small and medium models could also be introduced, and the recent or forthcoming entry of Chinese carmakers suggests that cheaper models could hit the market in the coming years.

In 2022-2023, Chinese carmakers accounted for 40-75% of the electric car sales in Indonesia, Thailand and Brazil, with sales jumping as cheaper Chinese models were introduced. In Thailand, for example, Hozon launched its Neta V model in 2022 priced at THB 550 000 (Thai baht) (USD 15 600), which became a best-seller in 2023 given its relative affordability compared with the cheapest ICE equivalents at around USD 9 000. Similarly, in Indonesia, the market entry of Wuling’s Air EV in 2022-2023 was met with great success. In Colombia, the best-selling electric car in 2023 was the Chinese mini-car, Zhidou 2DS, which could be found at around USD 15 000, a competitive option relative to the country’s cheapest ICE car, the Kia Picanto, at USD 13 000.

Electric car sales in selected countries, by origin of carmaker, 2021-2023

Second-hand markets for electric cars are on the rise.

As electric vehicle markets mature, the second-hand market will become more important

In the same way as for other technology products, second-hand markets for used electric cars are now emerging as newer generations of vehicles progressively become available and earlier adopters switch or upgrade. Second-hand markets are critical to foster mass-market adoption, especially if new electric cars remain expensive, and used ones become cheaper. Just as for ICE vehicles – for which buying second-hand is often the primary method of acquiring a car in both emerging and advanced economies – a similar pattern will emerge with electric vehicles. It is estimated that eight out of ten EU citizens buy their car second-hand, and this share is even higher – around 90% – among low- and middle-income groups. Similarly, in the United States, about seven out of ten vehicles sold are second-hand, and only 17% of lower-income households buy a new car.

As major electric car markets reach maturity, more and more used electric cars are becoming available for resale. Our estimates suggest that in 2023, the market size for used electric cars amounted to nearly 800 000 in China , 400 000 in the United States and more than 450 000 for France, Germany, Italy, Spain, the Netherlands and the United Kingdom combined. Second-hand sales have not been included in the numbers presented in the previous section of this report, which focused on sales of new electric cars, but they are already significant. On aggregate, global second-hand electric car sales were roughly equal to new electric car sales in the United States in 2023. In the United States, used electric car sales are set to increase by 40% in 2024 relative to 2023. Of course, these volumes are dwarfed by second-hand ICE markets: 30 million in the European countries listed above combined, nearly 20 million in China, and 36 million in the United States . However, these markets have had decades to mature, indicating greater longer-term potential for used electric car markets.

Used car markets already provide more affordable electric options in China, Europe and the United States

Second-hand car markets are increasingly becoming a source of more affordable electric cars that can compete with used ICE equivalents. In the United States, for example, more than half of second-hand electric cars are already priced below USD 30 000. Moreover, the average price is expected to quickly fall towards USD 25 000, the price at which used electric cars become eligible for the federal used car rebate of USD 4 000, making them directly competitive with best-selling new and used ICE options. The price of a second-hand Tesla in the United States dropped from over USD 50 000 in early 2023 to just above USD 33 000 in early 2024, making it competitive with a second-hand SUV and many new models as well (either electric or conventional). In Europe , second-hand battery electric cars can be found between EUR 15 000 and EUR 25 000 (USD 16 000‑27 000), and second-hand plug-in hybrids around EUR 30 000 (USD 32 000). Some European countries also offer subsidies for second-hand electric cars, such as the Netherlands (EUR 2 000), where the subsidy for new cars has been steadily declining since 2020, while that for used cars remains constant, and France (EUR 1 000). In China , used electric cars were priced around CNY 75 000 on average in 2023 (USD 11 000).

In recent years, the resale value 8 of electric cars has been increasing. In Europe, the resale value of battery electric cars sold after 12 months has steadily increased over the 2017-2022 period, surpassing that of all other powertrains and standing at more than 70% in mid-2022. The resale value of battery electric cars sold after 36 months stood below 40% in 2017, but has since been closing the gap with other powertrains, reaching around 55% in mid-2022. This is the result of many factors, including higher prices of new electric cars, improving technology allowing vehicles and batteries to retain greater value over time, and increasing demand for second-hand electric cars. Similar trends have been observed in China.

High or low resale values have important implications for the development of second-hand electric car markets and their contributions to the transition to road transport electrification. High resale values primarily benefit consumers of new cars (who retain more of the value of their initial purchase), and carmakers, because many consumers are attracted by the possibility of reselling their car after a few years, thereby fostering demand for newer models. High resale values also benefit leasing companies, which seek to minimise depreciation and resell after a few years.

Leasing companies have a significant impact on second-hand markets because they own large volumes of vehicles for a shorter period (under three years, compared to 3 to 5 years for a private household). Their impact on markets for new cars can also be considerable: leasing companies accounted for over 20% of new cars sold in Europe in 2022.

Overall, a resale value for electric cars on par with or higher than that of ICE equivalents contributes to supporting demand for new electric cars. In the near term, however, a combination of high prices for new electric cars and high resale values could hinder widespread adoption of used EVs among mass-market consumers seeking affordable cars. In such cases, policy support can help bridge the gap with second-hand ICE prices.

International trade for used electric cars to emerging markets is expected to increase

As the EV stock ages in advanced markets, it is likely that more and more used EVs will be traded internationally, assuming that global standards enable technology compatibility (e.g. for charging infrastructure). Imported used vehicles present an opportunity for consumers in EMDEs, who may not have access to new models because they are either too expensive or not marketed in their countries.

Data on used car trade flows are scattered and often contradictory, but the history of ICE cars can be a useful guide to what may happen for electric cars. Many EMDEs have been importing used ICE vehicles for decades. UNEP estimates that Africa imports 40% of all used vehicles exported worldwide, with African countries typically becoming the ultimate destination for used imports. Typical trade flows include Western European Union member states to Eastern European Union member states and to African countries that drive on the right-hand side; Japan to Asia and to African countries that drive on the left-hand side; and the United States to the Middle East and Central America.

Used electric car exports from large EV markets have been growing in recent years. For China, this can be explained by the recent roll-back of a policy forbidding exports of used vehicles of any kind. Since 2019 , as part of a pilot project, the government has granted 27 cities and provinces the right to export second-hand cars. In 2022, China exported almost 70 000 used vehicles, a significant increase on 2021, when fewer than 20 000 vehicles were exported. About 70% of these were NEVs, of which over 45% were exported to the Middle East. In 2023, the Ministry of Commerce released a draft policy on second-hand vehicle export that, once approved, will allow the export of second-hand vehicles from all regions of China. Used car exports from China are expected to increase significantly as a result.

In the European Union, the number of used electric cars traded internationally is also increasing . In both 2021 and 2022, the market size grew by 70% year-on-year, reaching almost 120 000 electric cars in 2022. More than half of all trade takes place between EU member states, followed by trade with neighbouring countries such as Norway, the United Kingdom and Türkiye (accounting for 20% combined). The remainder of used EVs are exported to countries such as Mexico, Tunisia and the United States. As of 2023, the largest exporters are Belgium, Germany, the Netherlands, and Spain.

Last year, just over 1% of all used cars leaving Japan were electric. However these exports are growing and increased by 30% in 2023 relative to 2022, reaching 20 000 cars. The major second-hand electric car markets for Japanese vehicles are traditionally Russia and New Zealand (over 60% combined). After Russia’s invasion of Ukraine in 2022, second-hand trade of conventional cars from Japan to Russia jumped sharply following a halt in operations of local OEMs in Russia, but this trade was quickly restricted by the Japanese government, thereby bringing down the price of second-hand cars in Japan. New Zealand has very few local vehicle assembly or manufacturing facilities, and for this reason many cars entering New Zealand are used imports. In 2023, nearly 20% of all electric cars that entered New Zealand were used imports, compared to 50% for the overall car market.

In emerging economies, local policies play an important role in promoting or limiting trade flows for used cars. In the case of ICE vehicles, for example, some countries (e.g. Bolivia, Côte d’Ivoire, Peru) limit the maximum age of used car imports to prevent the dumping of highly polluting cars. Other countries (e.g. Brazil, Colombia, Egypt, India, South Africa) have banned used car imports entirely to protect their domestic manufacturing industries.

Just as for ICE vehicles, policy measures can either help or hinder the import of used electric cars, such as by setting emission standards for imported used cars. Importing countries will also need to simultaneously support roll-out of charging infrastructure to avoid problems with access like those reported in Sri Lanka after an incentive scheme significantly increased imports of used EVs in 2018.

The median age of vehicle imports tends to increase as the GDP per capita of a country decreases. In some African countries, the median age of imports is over 15 years. Beyond this timeframe, electric cars may require specific servicing to extend their lifetime. To support the availability of second-hand markets for electric cars, it will be important to develop strategies, technical capacity, and business models to swap very old batteries from used vehicles. Today, many countries that import ICE vehicles, including EMDEs, already have servicing capacity in place to extend the lifetimes of used ICE vehicles, but not used EVs. On the other hand, there are typically fewer parts in electric powertrains than in ICE ones, and these parts can even be more durable. Battery recycling capacity will also be needed, given that the importing country is likely to be where the imported EV eventually reaches end-of-life. Including end-of-life considerations in policy making today can help mitigate the risk of longer-term environmental harm that could result from the accumulation of obsolete EVs and associated waste in EMDEs.

Policy choices in more mature markets also have an impact on possible trade flows. For example, the current policy framework in the European Union for the circularity of EV batteries may prevent EVs and EV batteries from leaving the European Union, which brings energy security advantages but might limit reuse. In this regard, advanced economies and EMDEs should strengthen co-operation to facilitate second-hand trade while ensuring adequate end-of-life strategies. For example, there could be incentives or allowances associated with extended vehicle lifetimes via use in second-hand markets internationally before recycling, as long as recycling in the destination market is guaranteed, or the EV battery is returned at end of life.

Throughout this report, unless otherwise specified, “electric cars” refers to both battery electric and plug-in hybrid cars, and “electric vehicles” (EVs) refers to battery electric (BEV) and plug-in hybrid (PHEV) vehicles, excluding fuel cell electric vehicles (FCEV). Unless otherwise specified, EVs include all modes of road transport.

Throughout this report, unless otherwise specified, regional groupings refer to those described in the Annex.

In the Chinese context, the term New Energy Vehicles (NEVs) includes BEVs, PHEVs and FCEVs.

Based on model trim eligibility from the US government website as of 31 March 2024.

SUVs may be defined differently across regions, but broadly refer to vehicles that incorporate features commonly found in off-road vehicles (e.g. four-wheel drive, higher ground clearance, larger cargo area). In this report, small and large SUVs both count as SUVs. Crossovers are counted as SUVs if they feature an SUV body type; otherwise they are categorised as medium-sized vehicles.

Measured under the Worldwide Harmonised Light Vehicles Test Procedure using vehicle model sales data from IHS Markit.

Price data points collected from various data providers and ad-hoc sources cover 65-95% of both electric and ICE car sales globally. By “price”, we refer to the advertised price that the customer pays for the acquisition of the vehicle only, including legally required acquisition taxes (e.g. including Value-Added Tax and registration taxes but excluding consumer tax credits). Prices reflect not only the materials, components and manufacturing costs, but also the costs related to sales and marketing, administration, R&D and the profit margin. In the case of a small electric car in Europe, for example, these mark-up costs can account for around 40% of the final pre-tax price. They account for an even greater share of the final pre-tax price when consumers purchase additional options, or opt for larger models, for which margins can be higher. The price for the same model may differ across countries or regions (e.g. in 2023, a VW ID.3 could be purchased in China at half its price in Europe). Throughout the whole section, prices are adjusted for inflation and expressed in constant 2022 USD.

This metric of depreciation used in second-hand technology markets represents the value of the vehicle when being resold in relation to the value when originally purchased. A resale value of 70% means that a product purchased new will lose 30% of its original value, on average, and sell at such a discount relative to the original price.

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2024 Housing Market Forecast and Predictions: Housing Affordability Finally Begins to Turnaround

As we look ahead to 2024 , we see a mix of continuity and change in both the housing market and economy. Against a backdrop of modest economic growth, slightly higher unemployment, and easing inflation longer term interest rates including mortgage rates begin a slow retreat. The shift from climbing to falling mortgage rates improves housing affordability, but saps some of the urgency home shoppers had previously sensed. Less frenzied housing demand and plenty of rental home options keep home sales relatively stable at low levels in 2024, helping home prices to adjust slightly lower even as the number of for-sale homes continues to dwindle.

Realtor.com ® 2024 Forecast for Key Housing Indicators

Home Prices Dip, Improving Affordability

Home prices grew at a double-digit annual clip for the better part of two years spanning the second half of 2020 through 2022, a notable burst following a growing streak that spanned back to 2012. As mortgage rates climbed, home price growth flatlined, actually declining on an annual basis in early 2023 before an early-year dip in mortgage rates spurred enough buyer demand to reignite competition for still-limited inventory. Home prices began to climb again, and while they did not reach a new monthly peak, on average for the year we expect that the 2023 median home price will slightly exceed the 2022 annual median.

Nevertheless, even during the brief period when prices eased, using a mortgage to buy a home remained expensive. Since May 2022, purchasing the typical for-sale home listing at the prevailing rate for a 30-year fixed-rate mortgage with a 20% down payment meant forking over a quarter or more of the typical household paycheck. In fact, in October 2023, it required 39% of the typical household income and this share is expected to average 36.7% for the full calendar year in 2023. This figure has typically ranged around 21%, so it is well above historical average. We expect that the return to pricing in line with financing costs will begin in 2024, and home prices, mortgage rates, and income growth will each contribute to the improvement. Home prices are expected to ease slightly, dropping less than 2% for the year on average. Combined with lower mortgage rates and income growth this will improve the home purchase mortgage payment share relative to median income to an average 34.9% in 2024, with the share slipping under 30% by the end of the year.

Home Sales Barely Budge Above 2023’s Likely Record Low

After soaring during the pandemic, existing home sales were weighed down in the latter half of 2022 as mortgage rates took off, climbing from just over 3% at the start of the year to a peak of more than 7% in the fourth quarter. The reprieve in mortgage rates in early 2023, when they dipped to around 6%, brought some life to home sales, but the renewed climb of mortgage rates has again exerted significant pressure on home sales that is exacerbated by the fact that a greater than usual number of households bought homes over the past few years, and despite stories of pandemic purchase regret , for the most part, these homeowners continue to be happy in their homes.

This is consistent with what visitors to Realtor.com report when asked why they are not planning to sell their homes. The number one reason homeowners aren’t trying to sell is that they just don’t need to; concern about losing an existing low-rate mortgage is the top financial concern cited. Our current projection is for 2023 home sales to tally just over 4 million, a dip of 19% over the 2022 5 million total.

With many of the same forces at play heading into 2024, the housing chill will continue, with sales expected to remain essentially unchanged at just over 4 million. Although mortgage rates are expected to ease throughout the course of the year, the continuation of high costs will mean that existing homeowners will have a very high threshold for deciding to move, with many likely choosing to stay in place. Moves of necessity–for job changes, family situation changes, and downsizing to a more affordable market–are likely to drive home sales in 2024.

Shoppers Find Even Fewer Existing Homes For Sale

Even before the pandemic, housing inventory was on a long, slow downward trajectory. Insufficient building meant that the supply of houses did not keep up with household formation and left little slack in the housing market. Both homeowner and rental vacancy remain below historic averages . In contrast with the existing home market, which remains sluggish, builders have been catching up, with construction remaining near pre-pandemic highs for single-family and hitting record levels for multi-family .

Despite this, the lack of excess capacity in housing has been painfully obvious in the for-sale home market. The number of existing homes on the market has dwindled. With home sales activity to continue at a relatively low pace, the number of unsold homes on the market is also expected to remain low. Although mortgage rates are expected to begin to ease, they are expected to exceed 6.5% for the calendar year. This means that the lock-in effect, in which the gap between market mortgage rates and the mortgage rates existing homeowners enjoy on their outstanding mortgage, will remain a factor. Roughly two-thirds of outstanding mortgages have a rate under 4% and more than 90% have a rate less than 6%.

Rental Supply Outpaces Demand to Drive Mild Further Decline in Rents

After almost a full year of double-digit rent growth between mid-2021 and mid-2022, the rental market has finally cooled down, as evidenced by the year-over-year decline that started in May 2023 . In 2024, we expect the rental market will closely resemble the dynamics witnessed in 2023, as the tug of war between supply and demand results in a mild annual decline of -0.2% in the median asking rent.

New multi-family supply will continue to be a key element shaping the 2024 rental market. In the third quarter of 2023, the annual pace of newly completed multi-family homes stood at 385,000 units. Although absorption rates remained elevated in the second quarter, especially at lower price points, the rental vacancy rate ticked up to 6.6% in the third quarter. This uptick in rental vacancy suggests the recent supply has outpaced demand, but context is important. After recent gains, the rental vacancy rate is on par with its level right before the onset of the pandemic in early 2020, still below its 7.2% average from the 2013 to 2019 period. Looking ahead, the strong construction pipeline– which hit a record high for units under construction this summer –is expected to continue fueling rental supply growth in 2024 pushing rental vacancy back toward its long-run average.

While the surge in new multi-family supply gives renters options, the sheer number of renters will minimize the potential price impact. The median asking rent in 2024 is expected to drop only slightly below its 2023 level. Renting is expected to continue to be a more budget friendly option than buying in the vast majority of markets, even though home prices and mortgage rates are both expected to dip, helping pull the purchase market down slightly from record unaffordability.

Young adult renters who lack the benefit of historically high home equity to tap into for a home purchase will continue to find the housing market challenging. Specifically, as many Millennials age past first-time home buying age and more Gen Z approach these years, the current housing landscape is likely to keep these households in the rental market for a longer period as they work to save up more money for the growing down payment needed to buy a first home. This trend is expected to sustain robust demand for rental properties. Consequently, we anticipate that rental markets favored by young adults , a list which includes a mix of affordable areas and tech-heavy job markets in the South, Midwest, and West, will be rental markets to watch in 2024.

Key Wildcards:

Wildcard 1: Mortgage Rates With both mortgage rates and home prices expected to turn the corner in 2024, record high unaffordability will become a thing of the past, though as noted above, the return to normal won’t be accomplished within the year. This prediction hinges on the expectation that inflation will continue to subside, enabling the recent declines in longer-term interest rates to continue. If inflation were to instead see a surprise resurgence, this aspect of the forecast would change, and home sales could slip lower instead of steadying.
Wildcard 2: Geopolitics In our forecast for 2023 , we cited the risk of geopolitical instability on trade and energy costs as something to watch. In addition to Russia’s ongoing war in Ukraine, instability in the Middle East has not only had a catastrophic human toll, both conflicts have the potential to impact the economic outlook in ways that cannot be fully anticipated.
Wildcard 3: Domestic Politics: 2024 Elections In 2020, amid the upheaval of pandemic-era adaptations, many Americans were on the move. We noted that Realtor.com traffic patterns indicated that home shoppers in very traditionally ‘blue’ or Democratic areas were tending to look for homes in markets where voters have more typically voted ‘red’ or Republican. While consumers also reported preferring to live in locations where their political views align with the majority , few actually reported wanting to move for this reason alone.

Housing Perspectives:

What will the market be like for homebuyers, especially first-time homebuyers.

First-time homebuyers will continue to face a challenging housing market in 2024, but there are some green shoots. The record-high share of income required to purchase the median priced home is expected to begin to decline as mortgage rates ease, home prices soften, and incomes grow. In 2023 we expect that for the year as a whole, the monthly cost of financing the typical for-sale home will average more than $2,240, a nearly 20% increase over the mortgage payment in 2022, and roughly double the typical payment for buyers in 2020. This amounted to a whopping nearly 37% of the typical household income. In 2024 as modest price declines take hold and mortgage rates dip, the typical purchase cost is expected to slip just under $2,200 which would amount to nearly 35% of income. While far higher than historically average, this is a significant first step in a buyer-friendly direction.

How can homebuyers prepare?

Homebuyers can prepare for this year’s housing market by getting financially ready. Buyers can use a home affordability calculator , like this one at Realtor.com to translate their income and savings into a home price range. And shoppers can pressure test the results by using a mortgage calculator to consider different down payment, price, and loan scenarios to see how their monthly costs would be impacted. Working with a lender can help potential buyers explore different loan products such as FHA or VA loans that may offer lower mortgage interest rates or more flexible credit criteria.

Although prices are anticipated to fall in 2024, housing costs remain high, and a down payment can be a big obstacle for buyers. Recent research shows that the typical down payment on a home reached a record high of $30,000 . To make it easier to cobble together a down payment, shoppers can access information about down payment assistance options at Realtor.com/fairhousing and in the monthly payment section of home listing pages. Furthermore, home shoppers can explore loan products geared toward helping families access homeownership by enabling down payments as low as 3.5% in the case of FHA loans and 0% in the case of VA loans .

What will the market be like for home sellers?

Home sellers are likely to face more competition from builders than from other sellers in 2024. Because builders are continuing to maintain supply and increasingly adapting to market conditions, they are increasingly focused on lower-priced homes and willing to make price adjustments when needed. As a result, potential sellers will want to consider the landscape for new construction housing in their markets and any implications for pricing and marketing before listing their home for sale.

What will the market be like for renters?

In 2024, renting is expected to continue to be a more cost-effective option than buying in the short term even though we anticipate the advantage for renting to diminish as home prices and mortgage rates decline.

However, for those considering the pursuit of long-term equity through homeownership, it’s essential to not only stay alert about market trends but also to carefully consider the intended duration of residence in their next home. When home prices rise rapidly, like they did during the pandemic, the higher cost of purchasing a home may break even with the cost of renting in as little as 3 years. Generally, it takes longer to reach the breakeven point, typically within a 5 to 7-year timeframe. Importantly, when home prices are falling and rents are also declining, as is expected to be the case in 2024, it can take longer to recoup some of the higher costs of buying a home. Individuals using Realtor.com’s Rent vs. Buy Calculator can thoroughly evaluate the costs and benefits associated with renting versus buying over time and how many years current market trends suggest it will take before buying is the better financial decision. This comprehensive tool can provide insights tailored to a household’s specific rent versus buying decision and empowers consumers to consider not only the optimal choice for the current month but also how the trade-offs evolve over several years.

Local Market Predictions:

All real estate is local and while the national trends are instructive, what matters most is what’s expected in your local market.

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Tesla’s Profit Fell 55%, Adding to Concerns About Its Strategy

The first-quarter results are likely to fuel worries that competitors will continue grabbing a bigger slice of a market dealing with slowing electric car sales.

Elon Musk, wearing a shirt and coat with no tie, seen from the side. The background behind him is dark.

By Jack Ewing

Tesla reported on Tuesday that it made significantly less money in the first three months of the year because of its tepid car sales, reinforcing concern among investors that the company led by Elon Musk is losing ground in the market for electric vehicles.

Profit fell 55 percent, to $1.1 billion, from the first quarter of 2023, the company said. And revenue fell 9 percent, to $21.3 billion.

A slump in earnings was seen as inevitable after Tesla said this month that sales in the first quarter fell 8.5 percent from a year earlier, and after the company announced plans to lay off more than 10 percent of its employees worldwide, or about 14,000 people.

The job cuts, including more than 2,000 workers at the company’s factory in Fremont, Calif., and nearly 2,700 at a factory in Austin, Texas, were interpreted as a sign that Tesla was struggling to bring costs in line with sinking revenue.

In the first quarter of 2023, Tesla made $2.5 billion and had one of the best profit margins in the industry, the company said a year ago. But it has been forced to cut prices, including in a new round last week, lowering the amount it makes on each car it sells. For a while, that strategy seemed to help bolster the company’s sales, but Tesla now appears to be struggling to attract buyers even with lower prices.

Tesla’s operating profit margin last quarter was 5.5 percent, half as much as a year earlier and in line with how much other automakers tended to earn.

Tesla investors are increasingly worried that its falling sales and profit are a symptom of larger problems , possibly pointing to the company’s inability to effectively respond to increased competition from established automakers and new carmakers from China .

Mr. Musk signaled recently that Tesla would focus on autonomous driving technology and a vehicle he called the Robotaxi, sowing doubt about the company’s plans to develop a new, lower-priced model that could make electric cars affordable to a broader range of customers and people in more countries.

Self-driving cars have long been an obsession for Mr. Musk. In 2019, he said Tesla would have one million autonomous taxis on the road the next year; the company still has no such cabs.

“Tesla lived on the coolness of its car, the idea that the company was about to launch autonomous vehicles and investor confidence in Mr. Musk’s ability to do nearly impossible things,” Erik Gordon, an assistant professor at the University of Michigan’s Ross School of Business, said in an email. “Now its cars are old, the fleet of Robotaxis promised five years ago hasn’t arrived, and confidence in Mr. Musk is battered by disappointments and behavior that mystifies investors.”

Tesla said on Tuesday that it remained on track to start producing a lower-priced vehicle next year. But in a change designed to reduce upfront investment, the car will use some new components and some borrowed from existing vehicles. That strategy will allow Tesla to make new models without building new factories, the company said.

“This update may result in achieving less cost reduction than previously expected,” the company said in a presentation to investors.

Tesla’s share price, which had fallen by about 40 percent this year, surged in extended trading Tuesday after its first-quarter report. Investors appeared to be pleased that the company was still planning a more affordable model.

Mr. Musk has defended Tesla’s price cuts, saying all carmakers adjust prices, but usually through dealer incentives and other measures that are not quite as visible to buyers. Tesla sells cars directly to customers online rather than through franchised dealers.

“Tesla prices must change frequently in order to match production with demand,” he said.

Tesla attributed the sales decline to conflict in the Red Sea, which has disrupted global supply chains; a fire that halted production at the company’s factory near Berlin; and the ramp-up of an upgraded version of the Model 3 sedan in Fremont. Tesla also blamed a decision by other carmakers to sell more hybrid vehicles, which include a gasoline engine and batteries and electric motors, for putting pressure on sales of fully electric vehicles.

The second quarter “will be a lot better,” Mr. Musk said on a conference call to discuss the company’s results.

He postponed a planned trip on Monday to India, where he was expected to meet Prime Minister Narendra Modi and announce plans for a factory, citing “very heavy Tesla obligations.”

While the postponement may disappoint investors who had hoped India could be a new source of growth, it could also provide reassurance that Mr. Musk was addressing Tesla’s problems more urgently. The company’s models are unlikely to sell in large numbers in India, where most car buyers prefer smaller and more affordable vehicles.

Tesla’s newest vehicle is the Cybertruck, a pickup that the company began producing last year. But the company has sold only around 4,000, according to information that emerged in a recall last week, suggesting it will not be a significant source of growth.

The self-driving taxi is seen as a long shot, partly because even the most advanced autonomous systems available today sometimes make glaring mistakes. In addition, federal and state regulators will have to sign off before Tesla can put such taxis on the road. Tesla does not yet have a license to test driverless vehicles in California, where it would be expected to develop Robotaxi software.

“Elon Musk has promised Robotaxis since 2016,” said Jan Becker, chief executive of Apex.AI, a company that provides software used by autonomous driving systems. “I don’t see enough evidence of Tesla releasing a Robotaxi, at least in the short term.”

Mr. Musk said Tuesday that the technology was improving rapidly because of advances in artificial intelligence. Answering questions from analysts, he expressed impatience with anybody who viewed Tesla as primarily a car company.

“We should have been thought of as an A.I. and robotics company,” he said. Anyone who doesn’t have faith in Tesla’s ability to perfect autonomous driving, he added, “should not be an investor in the company.”

Until recently, Tesla was among very few carmakers making money on electric cars, but established carmakers are catching up. General Motors, which also reported earnings on Tuesday, has ironed out production difficulties in battery-pack manufacturing and is ramping up output, Paul Jacobson, the company’s chief financial officer, said in a conference call with reporters.

G.M. remains dependent on its gasoline-vehicle business, which was primarily responsible for a 24 percent jump in profits for the first three months of the year, to $3 billion. But the company expects to be selling electric vehicles profitably later this year, Mr. Jacobson said.

Focus on Tesla’s earnings report Tuesday was unusually intense after a series of recent events that raised questions about the company’s direction and Mr. Musk’s leadership.

Last week, Tesla’s board of directors disappointed investors who had hoped it would do more to get Mr. Musk to focus on the car business and spend less time on X, where his polarizing comments and affinity for right-wing conspiracy theories have alienated many potential customers.

The board took steps to reinstate a $47 billion pay package for Mr. Musk that a Delaware court had voided. The board also said it would ask shareholders to approve moving Tesla’s corporate domicile to Texas, a change Mr. Musk called for on the day the Delaware court struck down his pay package in January on the grounds that it was excessive and that shareholders were not properly informed when they approved it in 2018.

Neal E. Boudette contributed reporting.

Jack Ewing writes about the auto industry with an emphasis on electric vehicles. More about Jack Ewing

The World of Elon Musk

The billionaire’s portfolio includes the world’s most valuable automaker, an innovative rocket company and plenty of drama..

Tesla: Elon Musk has gutted the part of the carmaking company responsible for building charging stations for electric vehicles , sowing uncertainty about the future of the largest and most reliable U.S. charging network.

X: An Australian court extended an injunction ordering the social media platform to remove videos depicting the recent stabbing of a bishop , setting the country’s judicial system up for a clash with Musk.

A $47 Billion Pay Deal: Despite facing criticism that Tesla is overly beholden to Musk , its board of directors said that the company would essentially give him everything he wanted, including the biggest pay package in corporate history.

SpaceX: President Biden wants companies that use American airspace for rocket launches to start paying taxes into a federal fund that finances the work of air traffic controllers.

Business With China : Tesla and China built a symbiotic relationship that made Musk ultrarich. Now, his reliance on the country may give Beijing leverage .

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Canada needs more grocery competition, competition bureau retail grocery market study report.

June 27, 2023

Copyright and permission to reproduce

This publication is not a legal document. It is intended to provide general information and is provided for convenience. To learn more, please refer to the full text of the Acts or contact the Competition Bureau.

For information on the Competition Bureau’s activities, please contact:

Information Centre Competition Bureau 50 Victoria Street Gatineau QC K1A 0C9

Telephone: 819‑997‑4282 Telephone (toll-free in Canada): 1‑800‑348‑5358 TTY (for hearing impaired): 1‑866‑694‑8389 Fax: 819‑997‑0324 Website: www.competitionbureau.gc.ca

This publication can be made available in alternative formats upon request. Contact the Competition Bureau’s Information Centre at the numbers listed above.

Permission to reproduce

Except as otherwise specifically noted, the information in this publication may be reproduced, in part or in whole and by any means, without charge or further permission from the Competition Bureau, provided that due diligence is exercised in ensuring the accuracy of the information reproduced; that the Competition Bureau is identified as the source institution; and that the reproduction is not represented as an official version of the information reproduced or as having been made in affiliation with, or with the endorsement of, the Competition Bureau.

For permission to reproduce the information in this publication for commercial purposes, please fill out the Application for Crown Copyright Clearance at www.ic.gc.ca/copyright-request or contact the ISED Citizen Services Centre mentioned below.

ISED Citizen Services Centre Innovation, Science and Economic Development Canada C.D. Howe Building 235 Queen Street Ottawa, ON K1A 0H5 Canada

Telephone (toll-free in Canada): 1‑800‑328‑6189 Telephone (international): 613‑954‑5031 TTY (for hearing impaired): 1‑866‑694‑8389 Business hours: 8:30 a.m. to 5:00 p.m. (Eastern Time) Email: [email protected]

Date: 2023-06-27

Aussi offert en français sous le titre Le Canada a besoin de plus de concurrence dans le secteur de l’épicerie : Rapport de l’étude de marché sur l’épicerie de détail du Bureau de la concurrence

Executive summary, making the case for more grocery competition, about the competition bureau, how we collected information for this study, public opinion: survey results and what we learned, the state of the supermarket: grocery competition in canada, consolidation among canada’s grocers, domestic grocer margins, property controls, online grocery: the new supermarket, bringing international grocery players to canada, how other countries have increased grocery competition, informing consumers, canadians’ ideas for increasing grocery competition, recommendations to increase grocery competition in canada, how to contact the competition bureau.

Canada Needs More Grocery Competition: Competition Bureau Retail Grocery Market Study Report PDF , 5.46 MB , 52 Pages

Canada’s grocery industry is concentrated. Most Canadians buy groceries in stores owned by a handful of grocery giants. In 2022, Canada’s three largest grocers—Loblaws, Sobeys, and Metro—collectively reported more than $100 billion in sales and earned more than $3.6 billion in profits.

For new players and regional independents, the Canadian grocery industry is tough to break into. Canada is a big country and opening new grocery stores Footnote 1 is expensive and difficult. The industry’s big players operate thousands of stores and are well entrenched in the shopping habits of Canadians.

In recent years, industry concentration has increased, and it has become more difficult than ever for businesses to enter, expand, and compete effectively. Furthermore, the price Canadians pay for groceries has been rising fast. Factors such as higher input costs, Russia's invasion of Ukraine, and supply chain disruptions have contributed to recent increases in the price of food. But we have also seen a longer-term trend that pre-dates those events, of Canada’s largest grocers increasing the amount they make on food sales.

Canada needs solutions to help bring grocery prices in check. More competition is a key part of the answer.

On our use of plain language

This report uses language that is different from the Bureau’s previous market study reports. Communicating clearly and accessibly with the public promotes transparency and accountability in the Bureau’s work. It also encourages compliance with the law and promotes awareness of important issues which may impact consumers and businesses. The Bureau is committed to using plain and accessible language wherever possible.

Our Recommendations

Competitive markets empower consumers and drive businesses to lower prices, improve product quality, innovate, and bring valuable new products to market. In this report, we make four recommendations to governments to improve competition in the grocery industry. They are designed to be flexible and provide principles-based guidance on actions that federal, provincial, and territorial governments across Canada can take. The Bureau recognizes that governments will need to consider and weigh other factors in deciding whether, and if so, how to implement these recommendations. However, the Bureau is committed to collaborating with decision-makers to help advance our recommendations in the most pro-competitive way possible.

Our recommendations are as follows:

Canada needs a Grocery Innovation Strategy aimed at supporting the emergence of new types of grocery businesses and expanding consumer choice. There are new businesses that want to disrupt how the industry works, including by selling groceries to Canadians online. Governments at all levels should work together to encourage the emergence of new types of grocery businesses that are willing to take risks to shake things up.
Federal, provincial, and territorial support for the Canadian grocery industry should encourage the growth of independent grocers and the entry of international grocers into the Canadian market. There are a number of important independent grocers across Canada who already compete against Canada’s grocery giants. However, given their relative scale, they face real challenges growing into national competitors. To encourage more competition in the industry, governments should implement policies that support the growth of independents, as well as the entry of international and discount grocers. The entry of new competitors and growth of existing independents would increase competition, empower consumers, and drive businesses to lower prices, improve product quality, and innovate.
Provincial and territorial governments should consider introducing accessible and harmonized unit pricing requirements. It is difficult to compare prices on even a few items between different grocery stores. Canadians need tools to help them compare grocery prices and empower them to make informed purchasing decisions. This information is key to shop better and shop smarter, and to encourage more competition in the industry. To achieve these goals, provincial and territorial governments should consider working together to develop and implement accessible and harmonized unit pricing requirements.
Provincial and territorial governments should take measures to limit property controls in the grocery industry, which could include banning their use. Property controls limit how real estate can be used by competing grocers. They make it difficult, or even impossible, for new grocery stores to open, which reduces competition in communities.

The Bureau also needs to approach its work in the grocery industry with heightened vigilance and scrutiny to ensure that Canadians benefit from greater choice and more affordable groceries. We need to thoroughly and quickly investigate allegations of wrongdoing, and we need the power to act when issues arise. Therefore, in addition to the above recommendations for governments across Canada, the Bureau commits to taking the following three steps to better promote competition in the Canadian grocery industry:

Approach our work in the Canadian grocery industry with heightened vigilance and scrutiny.
Provide a pro-competitive perspective to support the implementation of Canada’s grocery code of conduct.
Revisit the findings of this study in three years to assess progress on recommendations made to government.

Change will take time. These solutions will not bring Canadians’ grocery bills down immediately. But by acting now, governments at all levels can take steps toward creating a more competitive grocery industry in Canada.

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Why does competition matter? In a nutshell, competition is the driver of Canada's economy . When our economy is more competitive, Canadian businesses and consumers benefit in meaningful ways.

Competition pushes businesses to innovate, to improve the products and services they offer, and to enhance the efficiency of their operations. When these things happen, consumers benefit from increased choice, higher quality goods and services, and lower prices.

Competition matters in all industries and sectors of our economy, but why is it so important in the grocery industry?

Canada’s grocery industry is concentrated . It can be difficult for small and medium-sized businesses to compete effectively against Canada’s grocery giants. It is also challenging for new businesses to enter the industry successfully.

Without changes in the competitive landscape, Canadians will not be able to fully benefit from competitive prices and product choices.

So what is the solution? In our view, Canada needs more grocery competition .

Governments at all levels need to take steps to encourage and support more grocery competition in Canada. We have laid out a path to do so in this report.

The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses.

The Bureau’s activities are focused on those two key terms: protect and promote. To protect competition, we investigate potential breaches of the Competition Act and take appropriate action to remedy any harm. To promote competition , we work with businesses and governments across Canada to champion the key role of competition in the Canadian economy.

Market studies, like this one, are one way that the Bureau works to promote competition. Through this study, we have not investigated any specific allegations of wrongdoing. Instead, we have studied the grocery industry to understand its competitive dynamics and to explore ways that governments across Canada can act to promote greater grocery competition.

The Bureau’s law enforcement mandate

In the law enforcement context, the Bureau is an investigative body, much like the police. Our job is to collect evidence and investigate potential breaches of the Competition Act . Footnote 2 Proving that a person or business has violated the law requires solid evidence that can stand up to scrutiny.

The Competition Act sets out specific conduct—or anti-competitive behaviour—that we investigate. In general terms, this conduct can include:

Price fixing and bid rigging —when competitors agree to avoid competing by agreeing to set the same prices for goods or services or agreeing that a specific supplier will win a contract.
Deceptive marketing —when businesses deceive consumers by advertising or marketing products and services in ways that are false or misleading.
Mergers —when one business buys another and harms competition in the marketplace.
Abuse of Dominance —when dominant businesses engage in conduct that hurts competition in the marketplace.

Of course, these are just quick summaries of what we look for. The Competition Act is very specific about the type of conduct that may raise concern. We take action when we have sufficient evidence that a person or business has violated the law.

Competition promotion: Helping governments create more competition

It’s not just businesses that take actions that affect competition. Different levels of government can pass laws, policies, and regulations that sometimes make it harder for businesses to compete. As an example, laws that require Canadian ownership of businesses might stop foreign competitors from entering a market, which would reduce the choices available to Canadians and the competitiveness of the market.

There may be good reasons to pass such laws—such as ensuring Canadian control of our supply of an important product. But they also come at a cost, as less choice for consumers and competition can lead to higher prices.

Our retail grocery market study falls under our efforts to promote competition. When we do market studies, we examine an industry to see whether there are ways to improve competition. We do this so that we can suggest ways that governments can work to make competition better for Canada.

Market studies allow the Bureau to examine the competitive dynamics of an industry in an in-depth, holistic way. However, market studies are a bit different than other Bureau activities. When conducting law enforcement investigations, the Bureau can get court orders that compel businesses and people to give us information. For market studies, we do not have this ability. Instead, we generally have to rely on information that is publicly available or provided voluntarily.

In this study, we wanted to hear from consumers, given the impact of rising grocery prices on all Canadians. We used the Privy Council Office (PCO) Survey on Current Issues to assess Canadians’ attitudes and behaviours toward grocery shopping and solicited consumer perspectives on our website. The feedback received informed how we conducted the study and the issues we focused on.

Of course, in conducting this study, we also spoke to a variety of grocers, both in Canada and internationally. Many grocers were happy to speak with us, and we appreciate their candour and assistance with our study. Others were more reluctant to share information with the Bureau. This did limit our ability to fully answer some questions that are top of mind for Canadians, in ways that we discuss later in this report. Nevertheless, the absence of this information did not prevent us from identifying important ways in which grocery competition could be increased.

In addition to consumers and grocers, we benefited from speaking with a number of governments and agencies across Canada and internationally. We spoke with governments in Canada to understand how our current laws, policies, and regulations affect grocery competition. We also spoke to a number of international competition agencies to understand the steps that they have taken to increase grocery competition in their jurisdictions, and how these could be applied to Canada.

We also worked with independent financial and retail experts. These experts helped the Bureau to better understand how certain industry-specific practices affect competition in the grocery industry.

It’s important to note that our focus in this study was on retail grocery competition. We did not focus on issues relating to the purchase of groceries from suppliers, unless they had an impact on retail competition. Although the Bureau recognizes that the relationship between retailers and suppliers can affect the competitive dynamics of the industry, competition law in Canada does not regulate imbalances in bargaining power, and this aspect of the industry is subject to the establishment of a code of conduct that is currently being negotiated among key stakeholders. The Bureau has previously investigated the business practices of certain grocers in their dealings with suppliers, and will not hesitate to take appropriate action should there be evidence of any conduct that could violate the Competition Act .

Key takeaways

As part of this study, we used the PCO Survey on Current Issues to assess Canadians’ attitudes and behaviours toward grocery shopping.
Proximity matters: most Canadians buy groceries from stores located near their home.
Consumers living in urban areas have significantly more options than those located in rural and remote areas of Canada.
Supermarkets are still the main option for consumers, but more Canadians are buying groceries online.
Loyalty programs are an important driver of consumer choice.

To inform this study, the Bureau used the PCO Survey on Current Issues. We asked the PCO to include eight questions on their questionnaire to assess Canadians’ attitudes and behaviours toward grocery shopping. This survey was conducted by telephone with a random sample of 1,000 Canadians through two waves from January 23 to January 29 and from January 30 to February 5, 2023. Footnote 3

The Bureau was interested in learning about how and where Canadians shop for their groceries. Responses to the PCO’s survey helped us focus our analysis on what is most important to Canadians. Below, we have presented the survey results. We examine what they tell us about certain identity factors and how they may impact the ways in which Canadians buy their groceries. We then interpret these results and consider how they may affect our thinking about grocery competition in Canada.

Public opinion survey results

How often do you buy groceries.

Everyday: 3%
2-3 times per week: 37%
Once a week: 44%
Once every two weeks: 11%
Once a month: 2%
Less than once a month: 1%
I do not buy groceries: 2%

The vast majority (81%) of Canadians said they buy groceries one to three times per week.

What stores do you typically go to when buying groceries?

Loblaws and the stores they operate: 49%
Sobeys and the stores they operate: 28%
Walmart: 25%
Metro and the stores they operate: 22%
Costco: 18%
Other grocery stores: 28%

About half (49%) of Canadians said they shop at Loblaws or a store they operate.

In the past 3 months, have you bought groceries using the following? Footnote 4

Third-party grocery delivery service (e.g. Instacart): 17%
Order online with curbside pickup: 12%
Online order with home delivery service from the grocery store: 9%
Meal prep delivery services (e.g. GoodFood): 8%
Dark stores or online-only retailers (e.g. Buggy, SPUD): 2%

30% of Canadians said that they have used at least one online option in the past three months.

How often do you visit multiple grocery stores in order to find the best price?

Sometimes: 41%
Very often: 17%

Most Canadians (79%) said that they visit multiple grocery stores to find the best price at least sometimes.

How do you usually get to the grocery store?

By car: 83%
On foot: 10%
By public transit: 5%
By bike or scooter: 1%

Based on the mode of transportation you usually use to get to the grocery store, how many grocery stores are located within 15 minutes of your home?

Do you have a loyalty card or points card from a grocery store, are you more likely to buy your groceries at a grocery store to which you possess a loyalty or points card.

Yes, much more likely: 34%
Yes, somewhat more likely: 28%
No, not more likely: 38%

How do social, economic and cultural factors shape the way Canadians buy groceries?

To be truly effective, competition policy needs to consider how different social, economic, and cultural factors interact and affect diverse groups of Canadians. Like other organizations around the world, including the Organisation for Economic Co-operation and Development , the Bureau is moving toward more inclusive competition law enforcement and promotion . By considering these factors in our work, we can protect and promote competition for consumers and businesses more effectively, while also helping build a more inclusive economy. The tools we used are founded on Gender-Based Analysis Plus (GBA Plus). Footnote 5

The Bureau has taken steps to become more inclusive in its information gathering and analysis because this can affect how we think about competition. For example, more comprehensive information can better inform us about how diverse groups of consumers make purchasing decisions. Likewise, it can contribute to the Bureau’s understanding of how competition can benefit and harm diverse groups of consumers. This helps inform our decision-making, including how we prioritize our work.

A key part of this work is gathering information—consulting and engaging diverse groups of Canadians, and where possible, seeking rich, disaggregated data to inform our competition enforcement and promotion activities. Our engagement with Canadian consumers as part of this study is just one example of our efforts in this area.

Survey findings from a Gender-based Analysis Plus lens

The Bureau applied a GBA Plus lens to the PCO's survey results. Footnote 6 This analysis presented some interesting findings:

When it comes to shopping for groceries , Canadians living in urban areas said they are less likely to visit multiple grocery stores in order to find the best price. Younger Canadians (aged 18-34 years) also said they are more likely than others to have used a third-party service or a grocery store’s online service to shop for groceries.
In terms of grocery store proximity , lower-income Canadians (earning less than $40,000 a year) and those living in rural areas said that they are more likely to have fewer than three grocery stores within 15 minutes of their home. Footnote 7
Survey results also show that mode of transportation varies based on certain socio-economic characteristics. Lower-income Canadians and those aged 18-34 years are more likely to walk or use public transit to get to the grocery store.
Loyalty or points cards are more popular among women. Lower income (earning less than $40,000 a year) and younger Canadians (18-34 years) are less likely to have a loyalty or points card from a grocery store. However, of the 75% of Canadians that said they have such a card, immigrants (72%) and those aged 18-34 years (79%) said they were at least somewhat more likely to buy their groceries at a store where they have a loyalty or points card.

What we learned about grocery competition from Canadians

We learned a lot from this survey. The responses from Canadians have helped us better understand the factors that drive consumer decision-making when it comes to grocery purchases.

Ultimately, the Bureau drew five conclusions about consumer behaviour in the grocery industry from these results. Footnote 8 Each is discussed in greater detail below:

1. Proximity matters

Consumers tend to stay close to home when thinking about grocery options. This makes a lot of sense, as the extra time, effort, and expense of travelling farther will tend to offset any cash savings they get.

A simple example is a staple item, like a bag of potatoes. How far would a person travel to save even $1 on a 5 lb bag of potatoes? Would they drive to the next town over? If the answer is no, then that store probably isn’t actually a competitive option for them.

Things are a bit more complicated when we consider decision-making around buying a week’s worth of groceries. Some items may be cheaper at a local store, and others more expensive relative to a store that is further away. Does the average Canadian sit down and price compare dozens of items across a number of stores? Or will they simply limit their shopping to a smaller number of local options?

It is important that we get these answers right. If individuals only ever shop within 20 minutes of their home, it would be wrong for us to consider a store 30 minutes away as being a meaningful competitor. Doing so would leave us with the conclusion that there was more competition than there really is.

2. The degree of grocery competition in urban and rural communities varies in meaningful ways

When looking at the availability of grocery products, we often see very different results when comparing cities to smaller towns or rural communities. In a city, residents might easily have five or more grocery stores within 20 minutes of their house. Those who live in a small town or a rural community said that they have much fewer options.

Remote, Northern, and Indigenous Communities

These differences also exist when we look at remote, northern, and Indigenous communities. Grocery prices are typically much higher in these areas than in urban areas. Higher transportation costs are a contributing factor, but the lack of competitive options also plays a role.

Most of Canada’s grocery giants are either not present or have limited operations in these areas. Many residents have access to only one grocery store, or none at all. Although more competition, including from online options , is unlikely to bring these communities the same prices that Canadians see elsewhere, it can help.

3. Supermarkets are still the main option for consumers ...

The vast majority of Canadians said that, when it comes to buying groceries, they primarily shop at grocery stores. That might seem obvious, but it’s important to test our preconceived notions to see if they are supported by evidence.

A simple example comes from buying a box of cereal. Of course, you can find options in any grocery store. But you could also get cereal from a number of convenience stores or pharmacies. If we only looked at cereal, we would think that there are many more options available than if we considered a broader basket of groceries.

This helps us focus our analysis. It tells us that there is something unique about supermarkets that consumers value when doing their weekly shopping. This could be how they price products, or the range of products they offer. Either way, it helps us focus on the competitive options that are most important to Canadians. And Canadians said that they prefer buying groceries in a supermarket format. Footnote 9

4. ... But online options are becoming more important

About a third of Canadians said that they have used at least one online option to buy groceries in the past three months. This could represent a change in how some Canadians buy their groceries. In the past—prior to the pandemic—a much smaller percentage of Canadians bought groceries online . Stakeholders told us they expect this number to keep growing.

Accordingly, in this study, we focused on the competitive role of online options, and how it might change in the near future. For now, supermarkets are still where most Canadians buy their groceries, but that might change.

5. Loyalty programs drive consumer decisions

Most of the major grocery retailers have loyalty programs that allow customers to earn points or rewards that can be used to purchase groceries and other products.

Consumers are encouraged to regularly shop at the same grocery store to earn points faster and benefit from special or targeted offers. In some cases, they may also be able to earn points by shopping at partner stores. As an example, Loblaws’ PC Optimum program applies across a large network of stores, including both its supermarkets and Shoppers Drug Mart (or Pharmaprix in Quebec).

Loyalty programs can bring about lower prices for consumers—either through special offers or by redeeming points for cheaper groceries. They may also drive grocery stores to compete harder to lure customers away from another store that has a particularly strong loyalty program.

Based on the survey responses, we found that these programs have an important influence on consumer behaviour. Roughly three in five Canadians (61%) reported that they are more likely to shop at a grocery store where they can earn rewards points. We also found that loyalty programs were more popular with women, and more likely to affect the purchasing decisions of immigrants. However, lower-income Canadians (earning less than $40,000 a year) were less likely to have loyalty or points cards.

Here’s what follows

What we learned from this survey drives the rest of this report. We analyze competition between supermarkets, as that is where most Canadians do their grocery shopping. We look at online grocery options, as Canadians said that they are becoming more relevant for their shopping habits. And finally, we focus on the steps that can be taken to improve competition—be it by supporting the entry of new competitive supermarkets, or by empowering consumers with more and better information to help them find the most competitive deals.

Canada’s grocery industry is concentrated. Most Canadians buy groceries from one of five companies: Loblaws, Sobeys, Metro, Costco, and Walmart.
Some Canadians have access to stores operated by independent grocers. However, this varies a lot depending on where they live.
Independents face significant barriers in growing to become a competitive threat to the grocery giants.
Without government support, we should not expect independent grocers to significantly expand in Canada in the near future.
There is no quick fix to improve the state of competition in the Canadian grocery industry, but there are steps that all levels of government can take to improve the status quo.

The size of Canada’s grocery giants is concerning to Canadians. A number of Canadians wrote to us saying they feel they lack choice in the grocery industry. They feel they are paying higher grocery prices than they should be.

Depending on where Canadians live, they may have access to more options. For example, in some parts of the country, there are competitive independent grocery stores. But this is very community-specific. Most independents operate on a local or regional basis. It can be very difficult for them to expand nationally, or for a new competitor to open grocery stores across Canada. It would take huge investments for a new competitor to catch up to the grocery giants.

There is no quick fix to improve the state of competition in the Canadian grocery industry. But more competition leads to lower prices for consumers. There are steps that all levels of government can take to help.

Canada’s grocery giants

The largest grocery chains tower over Canada’s grocery industry. In 2022, Loblaws, Sobeys, and Metro together reported more than $100 billion in sales. Unlike Loblaws and Sobeys, which have stores across the country, Metro operates only in Ontario and Quebec. But all three companies have over 1,000 stores each, including franchised locations. Footnote 10 And, even if you don’t shop at a store called Loblaws, Sobeys, or Metro, you may be shopping at another store that they own or are affiliated with.

Figure 1: Stores owned by or affiliated with Loblaws, Sobeys, or Metro

Stores that are owned by or affiliated with Loblaws, Sobeys, or Metro. Text version below.

The following stores are owned by or affiliated with Loblaws:

Real Canadian Superstore
Shoppers Drug Mart / Pharmaprix
Atlantic Superstore
Your Independent Grocer

The following stores are owned by or affiliated with Sobeys:

Thrifty Foods
Les Marchés Tradition
Marché BoniChoix
Lawtons Drugs

The following stores are owned by or affiliated with Metro:

Food Basics
Marché Richelieu

Costco and Walmart are the next largest grocers in Canada. While both companies have different business models and sell more than just food, they compete with Loblaws, Sobeys, and Metro for grocery sales. The success of Costco and Walmart across Canada has brought more choice to the grocery industry. But with only about 500 stores between them, Footnote 11 they are not an option in every community.

Loblaws, Sobeys, and Metro face less competition from standalone discount grocery chains than we see in some other countries. That’s because in Canada, the large grocers also own many of the biggest discount stores: Loblaws owns No Frills and Maxi, Sobeys owns FreshCo, and Metro owns Food Basics and Super C (see Figure 1 ). This is different from other countries where large grocers compete against lower-priced options like ALDI or Lidl .

Instead, Canadians looking for more choice may turn to independent grocery stores.

Independent grocers in Canada

According to the Canadian Federation of Independent Grocers , there are about 6,900 independent grocery stores in Canada. Many of them are single-store, family-run operations with limited space and less variety than stores operated by the grocery giants. But there are also independent chains with dozens of stores that compete head-to-head with the grocery giants. All of them play an important role in communities across Canada.

Independent grocers may compete by selling different products than the large retailers. For example, independent grocers focusing on the sale of international foods and other specialty products have found success in many parts of Canada. But they usually don’t offer the same breadth of products available in supermarkets owned by the grocery giants.

Many independents may not be big enough to directly compete with the grocery giants on a national level. But some of the larger independent chains do so on a regional basis. For example, according to the PCO’s survey, 23% of British Columbia residents do their shopping at Save-On-Foods, which operates more than 175 stores in Western Canada. However, even the biggest independents face challenges trying to compete against the grocery giants.

Differences between Rural and Urban communities

In some rural and remote areas of Canada, an independent grocery store may be the only local option. Canadians who live in urban areas typically have access to a larger number of grocery stores. But generally the further away from a city, the less choice Canadians have. This aligns with what we heard from Canadians through the PCO’s survey.

Barriers faced by independent grocers

We spoke to several independent grocers across the country. Most of them told us the same thing: it is difficult being an independent in Canada today. Here are just some of their concerns:

Consolidation makes it tougher for independents and new stores to stay in business. Many independents are worried that large grocers keep buying up smaller chains like theirs, and that there won’t be a future for small stores.
Many independents have to buy groceries from their competitors. Unlike the grocery giants, most independents are not big enough to have their own warehouses or to buy directly from suppliers. Instead, many of them buy the grocery products they sell from the likes of Loblaws and Sobeys, which in addition to their retail stores, also have large wholesale businesses. According to independents, this dependency makes it more difficult for them to compete on price.
Large grocers are paid by suppliers to put their products on shelves. Independent stores generally aren’t, and that can put them at a disadvantage.
Finding access to real estate is challenging. Grocery stores generally require a large, accessible space with lots of parking. Many of the locations that could support a new grocery store are already controlled by the grocery giants.

For many Canadians, their main grocery options are supermarkets operated by Canada’s grocery giants: Loblaws, Sobeys, Metro, Costco, and Walmart. Some Canadians may have independent options, depending on where they live, but many of these options are limited in their product selection, store locations, and other important competitive aspects. Independents play an important role in communities across Canada, but without government support, we should not expect them to significantly expand in the near future.

Canadians are concerned that grocers keep getting bought out by their competitors, leading to fewer choices in their communities. We heard from some Canadians that Canada’s laws do not do enough to stop deals that are bad for competition. Others feel the Bureau has just not done a good enough job enforcing those laws.

Over the past few decades, the Bureau has reviewed dozens of grocery mergers. We look at merger review as the first line of defence in the effort to protect competition. These reviews often involve a detailed analysis of how a merger may affect competition in local communities across Canada where stores are being acquired. This can involve reviewing hundreds of local areas to identify potential competition issues, and the analysis of data (e.g. postal code information) to determine where grocery stores’ customers are coming from and the extent to which two or more stores compete against one another for the same customers. The Bureau typically seeks to identify whether there are other businesses that will continue to compete for grocery sales after a merger. The Bureau also tries to determine whether it is likely that new grocery stores will open in a community, and what challenges a competitor may face in doing so.

In addition to analyzing the effects of grocery mergers on local retail areas across Canada, the Bureau is also increasingly mindful of the growing bargaining power of retailers with their suppliers, and of the role of some retailers as suppliers to their competitors. This has been a focus in previous reviews and will continue to be.

It is our job to take action where we have solid evidence that a merger will significantly harm competition. For example, if we think a merger could make it easier for a grocery chain to charge significantly higher prices in certain areas, we would typically look to preserve competition by ensuring the sale of certain stores to other competitors.

A history of grocery mergers in Canada

When the Competition Act was introduced in 1986, there were at least eight large grocery chains across Canada. Each was owned by a different company.

Figure 2: Comparison of Canada’s retail grocery landscape in 1986 and 2023

Eight of the largest grocery chains in Canada in 1986 and the five largest chains in 2023. Text version below.

Eight of the largest grocery chains in 1986:

Sobeys (Empire)

The five large grocery chains in 2023:

Today, we are down to five large chains that operate in Canada:

Costco; and

Five of the large chains that were around in 1986 were bought by their competitors (see Figure 3 ):

Steinberg’s stores were sold to A&P, Metro, Provigo, and IGA;
Provigo’s stores were sold to Loblaws;
IGA’s stores were sold to Sobeys and Loblaws;
A&P’s stores were sold to Metro; and
Safeway’s stores were sold to Sobeys.

Two new large chains, Costco and Walmart, have entered or expanded during that time. But generally, there are fewer grocers today than there used to be.

So, how did we get here?

Figure 3 shows some of the more notable grocery mergers that the Bureau has reviewed since 1986.

Figure 3: Timeline of notable grocery mergers reviewed by the Competition Bureau, 1986-present

Notable grocery mergers reviewed by the Competition Bureau from 1986 to 2023:

Safeway / Woodward (1986)
A&P / Steinberg (1990)
Metro & Provigo & IGA / Steinberg (1992)
Sobeys / IGA (1998)
Loblaws / IGA (1998)
Loblaws / Provigo (1998)
Sobeys / Commisso's Food Markets (2003)
Metro / A&P (2005)
Loblaws / T&T (2009)
Sobeys / Safeway (2013)
Loblaws / Shoppers Drug Mart (2013)
Amazon / Whole Foods Markets (2017)
Metro / Jean Coutu (2017)
Sobeys / Farm Boy (2018)
Sobeys / Longo's (2021)

Steps taken by the Bureau to protect grocery competition during merger reviews

When the Bureau finds that a grocery merger is likely to harm competition in certain local areas, it will generally require the buyer to sell stores in those areas to ensure harm does not occur:

For example, when Sobeys purchased Safeway in 2013, it agreed to sell 23 stores in British Columbia, Alberta, Saskatchewan, and Manitoba, pursuant to a legally binding consent agreement . All of the stores were sold to independents, including Federated Co-operatives Limited, and Save-On-Foods.
Similarly, when Loblaws purchased Provigo in 1998, it was required to sell stores in 32 local areas in Ontario and Quebec, as well as two warehouses and Provigo’s Loeb brand.

In some cases, the Bureau has also required grocers to agree to other remedies to protect competition. For example, when Loblaws purchased Shoppers Drug Mart in 2013, it agreed to not enter into certain types of agreements with suppliers for up to five years after the transaction. This was in addition to the required sale of 18 stores and nine pharmacies.

Do Canada’s merger laws do enough to protect competition?

Critics would note that the Bureau’s focus on local grocery competition has allowed for a slow reduction in the number of grocers across Canada as the industry has consolidated. There is some truth to that.

As an example, when a big grocer buys up a small number of stores in urban areas, it is often difficult for the Bureau to stop them. Despite concerns often being raised when a big company buys a smaller competitor, the reality is that consumers typically only lose one of many alternative stores. The law in Canada typically will not allow the Bureau to intervene in these deals, as they are generally seen as unlikely to have a significant impact on prices and other dimensions of competition.

The Bureau can only stop a deal when it has solid evidence that it will significantly hurt competition. In the case of a major city or suburb, with five or six different grocery stores nearby, it can be hard to prove that removing one option will cause prices to go up significantly.

The Bureau has recently made recommendations to the government to modernize and improve Canada’s competition laws. Our laws need to address harm to consumers from increasing concentration. The Bureau needs to have the tools required to safeguard competition in the industry to protect consumers and allow both new and existing businesses to grow and compete.

Our recommendations would make significant improvements to the state of competition in Canada. However, until the law is modernized, and recognizing that there are relatively few independent grocers in Canada, the Bureau will apply extra vigilance moving forward whenever actions are taken that could hurt competition in the grocery industry. Footnote 12 Canada needs more, not less grocery competition.

The Canadian grocery industry is concentrated. Many wonder whether a lack of competition is the reason why grocery prices are increasing at the fastest rate in more than 40 years.
Recently, food prices have increased rapidly. However, increasing prices are not always indicative of a competition problem. Prices might go up, for example, when it costs grocers more to buy the food that they sell. And we heard that grocers’ costs have gone up.

Instead of looking at prices, gross profit margins can provide a clearer signal. These margins subtract the costs that grocers incur to buy products, and show how much a grocer makes on each dollar of sales.

We saw Canada's largest grocers’ food gross margins generally increase by a modest yet meaningful amount over the last five years. This longer-term trend pre-dates the supply chain disruptions faced during the pandemic and the current inflationary period.
The fact that Canada's largest grocers have generally been able to increase these margins—however modestly—is a sign that there is room for more competition in Canada’s grocery industry.

The Canadian grocery industry is concentrated, with most sales happening in stores owned by the five grocery giants. The Bureau launched this study to determine whether high grocery prices are the result of changing competitive dynamics in the industry.

Canadians are seeing grocery prices increase at the fastest rate in more than 40 years . Many wonder whether a lack of competition is the reason why.

Figure 4 shows that food prices in Canada have increased faster than general inflation between December 2021 and March 2023.

Figure 4: Change in Food Prices vs. Consumer Price Index, monthly from September 2021 to March 2023

Monthly changes in food prices and Consumer Price Index from September 2021 to March 2023. Text version below.

Source: Statistics Canada. Table 18-10-0004-01 Consumer Price Index, monthly, not seasonally adjusted .

Are increasing prices an indicator of competition problems?

Prices going up is not always indicative of a competition problem. Food prices will generally be higher when there is less competition, but they can also go up when it costs grocers more to buy the food that they sell. Some experts cite increasing costs brought about by pandemic-related supply chain problems, as well as the Russian invasion of Ukraine, as significant drivers of rising food prices around the world .

Margins are an important indicator of industry competitiveness. Footnote 13 Some companies can earn high gross margins for other reasons—such as needing to contribute to large fixed costs—so there is often a contextual element to interpreting margins. But generally, gross margins can play an important part in understanding competition.

Accordingly, when prices rise, it is often illustrative to see whether margins have grown as well. If margins stay the same, then higher prices may simply reflect increased input costs. If margins increase, then they can indicate that a business is successfully raising its prices over and above any increase in costs.

Why doesn’t the Bureau stop companies from charging high prices?

Well functioning markets are generally the best way to determine the price and variety of products for sale. Hundreds of years of economic growth and prosperity have shown that competitive markets are the best drivers of efficiency and innovation.

It is not illegal in Canada for a business to have a monopoly or charge high prices. Only when they engage in specific anti-competitive behaviours do those outcomes potentially raise concern under the Competition Act .

The Bureau’s role is to act when a business does something that reduces competition in a way that breaks the law.

Canadian grocers sell more than just groceries

Before looking at margins, it is important to recognize that Canadian grocers sell more than just food. For example, Loblaws owns Shoppers Drug Mart, and Metro owns Jean Coutu—both of which operate hundreds of pharmacies across Canada (see Figure 1 ).

This means that the margin and profit data publicly reported by Canada’s big grocers include the sales of other products, such as pharmaceutical and beauty products . In many cases , grocers have pointed to increased sales of these non-food products as the reason for their higher profits. Accordingly, if we are focused on understanding the possible links between grocery competition and food inflation, then sales of non-food products should be removed before evaluating financial data from the big grocers’ public reports.

However, grocers do not publish food-only financial results. That’s why, in this study, the Bureau sent information requests to each of Canada’s five major grocers asking them to provide their food gross margins and other relevant information.

Did Canada’s grocery giants cooperate with the Bureau’s study?

There have been questions concerning the amount of cooperation and financial information shared with the Bureau by Canada’s grocery giants during this study. This topic was frequently raised during the parliamentary Standing Committee on Agriculture and Agri-Food’s meetings in respect of their study on Food Price Inflation , where executives of all five of Canada’s major grocery chains appeared.

The Bureau is not able to disclose the specific information it was provided, owing to the confidentiality requirements of the Competition Act . However, in general, the Bureau can say that the level of cooperation varied significantly, and was not fulsome. In many instances, the Bureau was not able to obtain complete and precise financial data, despite its repeated requests.

The Bureau’s inability to compel information as part of this study has further highlighted the need for formal information-gathering powers. That is why the Bureau continues to advocate for legislative changes to improve the Competition Act in this area. Such changes would improve our ability to conduct market studies, and to protect and promote competition for Canadians in all sectors of the economy, including the agri-food sector.

Canadian grocers’ food gross margins increased by a modest yet meaningful amount

Based on the information that we were provided by Canada’s grocery giants, we found that Canadian grocers’ food gross margins have generally increased over the last five years by a modest yet meaningful amount. This longer-term trend pre-dates the supply chain disruptions faced during the pandemic and the current inflationary period.

Breaking that down, we have found that grocers have increased the percentage of profit they earned on food products in a way that is:

Margins generally increased by one or two percentage points since 2017.
This is roughly equivalent to $1-2 on each $100 that Canadians spend on groceries.
The Canadian grocery industry is a low-margin business. Grocers make relatively little on each item, but make their profits in volume.
That means that even small changes in margins can be meaningful. Footnote 14

What does modest but meaningful mean for Canadians?

According to the most recent Statistics Canada data , Canadian households, on average, spent $7,536 on food in 2019. This data pre-dates the latest period of food inflation in Canada, so it almost certainly understates current spending. But with just under 15 million Canadian households as of 2021, this means that Canadians likely spend over $110 billion on groceries per year, so even modest increases can add up fast. A one percentage point increase in gross margins at grocery stores could add over $1 billion to Canadians’ food bills each year.

Modest but meaningful margin changes can cause big changes in profits when food inflation is high

As grocery prices have increased, so have grocers’ profits. The profits of Canada’s three largest grocers have risen appreciably over the past four years. Figure 5 shows that these profits have collectively grown from $2.4 billion in 2019 to $3.6 billion in 2022.

Figure 5: Profits of Canada’s three largest grocers, annually from 2019-2022

The profits of Canada’s three largest grocers, Loblaws, Metro and Sobeys, from 2019 to 2022. Text version below.

Source: Annual Reports of Loblaw Companies Limited , Empire Company Limited , and METRO INC. for 2019-2022.

Note: Annual profits are based on the companies’ fiscal years, which differ from company to company, and do not necessarily align with the calendar year (January–December).

Higher profits result from higher revenues relative to costs. Revenues can increase because of higher prices, higher volumes, or both. Margins help show whether changes in the difference between prices and costs are contributing to higher profits.

Grocers are earning only modestly more in food gross margin, but even small increases can matter for Canadians. Usually, when we talk about margins, we express them as the percent of each dollar spent that ends up available for the grocers to keep. But thinking of margins this way can create a bit of an illusion. Table 1 shows how, even when a grocer’s margin stays the same, an increase in the cost they incur to buy food products can increase profits.

Consider a grocer selling a can of soup. If a grocer is paying $1 for that can, and selling it to you for $1.20, they are making a 20% margin. They earn $0.20 per can of soup sold.

Now, what happens if the grocer’s cost for that can of soup goes up to $1.10, and they apply that same 20% margin? The price of that can of soup now goes up to $1.32. The grocer still makes a 20% margin, but now they get $0.22 cents to put toward their profit.

When its costs rise, a business does not need to increase its margin in order to increase its profit. High rates of food inflation can significantly increase grocers’ profits even if their gross margins remain constant or increase only modestly.

Additional analysis would help us better understand grocer profitability

This analysis focuses only on food gross margins. These margins are an important indicator of grocer profitability in Canada. But they are blunt, as they boil down the operations of very large businesses to a single number. Based on the data and information provided to the Bureau by the grocery giants, we are limited in the inferences that we can draw from these findings.

More granular analysis would have been preferable and could have helped us better understand how grocers have priced specific products. It could also have allowed us to paint a more comprehensive picture of how Canadians’ consumption patterns have changed in response to food price inflation. As an example, increasing food gross margins could be explained, in part, by consumers switching some of their purchases to higher margin private-label products. However, we did not receive the data necessary to make such an assessment.

Those type of analyses could have provided us with a richer understanding of grocery competition in Canada.

What do modestly increasing margins tell us about competitive dynamics?

When an industry is very competitive, businesses will not usually be able to increase their margins. The fact that Canada's largest grocers have generally been able to do so over the last five years—however modestly—is a sign that there is room for more competition in Canada’s grocery industry. Additional grocery competition would help cap grocery price inflation.

Property controls limit how real estate can be used by competing grocers.
Such controls can harm competition by making it difficult—or even impossible—for businesses to open up new grocery stores.

A property control limits how a person can use a property. They are clauses typically found in a legal agreement like a lease or a deed that transfers title. For example, in the case of a shopping centre, property controls often limit the kind of store that can open there. These controls are also sometimes called restrictive covenants.

How do property controls affect grocery competition?

Property controls reduce competition from other food retailers and make it harder for new grocery stores to open. They do this in two ways:

When a store is sold:

When a grocery store is being sold, the seller of that store may want to stop a new owner from using that location to operate a competing grocery store.
The grocer may want to do this if they are relocating to another location nearby, as doing so would limit the number of other grocers they have to compete against.
Property controls typically apply not just to new owners of a property, but to future owners as well. They can stay in place for a very long time, stopping new grocery stores from opening in communities.

When a grocer signs a lease:

When a grocery store is opening in a location with other tenants, like a mall, it may ask the landlord to limit other stores from selling similar products.
This ensures that the grocer will not face competition from other tenants and may provide it with the certainty it is looking for prior to making an investment in a new store.
A landlord may agree to this kind of property control because grocery stores attract significant numbers of customers, and because they may be unsure whether the grocer will agree to sign a lease otherwise.

What effect do property controls have on grocery competition?

Property controls reduce consumer choice. Some Canadian businesses told the Bureau that they have been unable to open stores because of property controls.
Property controls can be very broad . The Bureau heard that they can exclude businesses even if they don’t compete directly with a grocery store, like bakeries and other specialty food stores.
Property controls have the biggest effect on Canadians who have the fewest options. 24% of Canadians said that there are only one or two grocery stores within 15 minutes of their home. For those who walk, the proportion is 39%. We also heard that lower-income Canadians (earning less than $40,000 a year) are more likely than others to have fewer stores in proximity to their home. For these Canadians, if a local grocery store is closed and property controls prevent new ones from opening in their community, it may leave them without easy access to a supermarket. This is not a theoretical problem— examples of “food deserts” have been documented across Canada .
Other countries have recognized the harmful effects of property controls. Australia , New Zealand , and the United Kingdom are just three examples of countries that have taken action against property controls due to their limitations on competition in the grocery industry.

Conclusion on property controls

Location, location, location. It’s the golden rule of real estate. While it may seem simple enough to suggest that a retailer look for other locations, there is often only a certain amount of prime real estate in a given area. When that prime real estate is restricted through a property control, new grocers may not be able to open. This limits competition from new grocers, and can deny consumers the benefits that competition brings about: lower prices, greater choice, and increased levels of innovation.

A growing number of Canadians are turning to online sources to buy food.
Sometimes, these online services are operated or controlled by Canada’s grocery giants. When that is true, these services may increase convenience, but do not necessarily increase competition.
The online grocery segment is still developing, and new options are emerging. Truly independent online grocers could positively increase grocery competition in Canada.

The way Canadians buy their groceries is changing. Shopping at a local supermarket used to be the only way to get groceries, but this is no longer the case.

More and more Canadians now purchase their groceries online. Though online grocery options are still relatively new, they are gaining traction. The COVID-19 pandemic saw the rise of alternatives to in-store shopping.

Online shopping is still only a relatively small portion of Canada’s total grocery sales. But this is likely to change. The nation’s grocery giants, as well as other companies, are investing significant amounts of money into their online business models. And Canadians seem to enjoy the online shopping experience: based on results from the PCO’s survey, nearly 30% of Canadians have recently bought groceries online. Stakeholders interviewed by the Bureau also said that they expect online sales to continue to grow in the future.

Online options may not entirely replace in-store shopping anytime soon. But if Canadians are looking for more choice, they may find it online.

Canada’s online grocery options

Ordering groceries online can replace the need to shop in-store. When an order is placed, the items are either made available at a retail location for pick-up (otherwise known as “click-and-collect”) or delivered to a customer’s home. As delivery and pick-up charges may apply, the overall cost of an online order can be greater than what would be charged in-store.

Online grocery is dynamic and includes companies both big and small. To date, there are three broad categories of businesses that operate in Canada’s online grocery segment:

Grocery Stores: From large chains to small independents, many are now also selling groceries online:

Online shopping, including delivery and click-and-collect, is not yet available at every grocery store or in every community. For example, the discount banners owned by Loblaws (such as No Frills), Sobeys (such as FreshCo), and Metro (such as Food Basics) do not currently offer delivery.
Delivery from traditional grocers is usually only available near an existing store’s physical location. And orders may not be delivered on the same day.

Delivery Services: Some new businesses offer to purchase customers’ groceries at a grocery store and deliver them to their home:

Many delivery services have partnered with grocers to fulfill their online orders.
Importantly, these companies—although they operate at arm’s length to grocers—do not control the prices that consumers pay. Instead, they just buy products from grocers on a consumer’s behalf.
Delivery is usually only available to homes that are close to an existing grocery store.

Online Stores: These are businesses that sell groceries only through an app or website:

This includes meal kit providers, dark stores, mass merchandisers that sell groceries, and online-only grocers.
These businesses generally buy groceries on a wholesale basis, and control the ultimate price that consumers pay.
Deliveries from these stores may be restricted to urban areas only, and the delivery speed can range from an hour to a day or more.

What are meal kit services, dark stores, and fulfillment centres?

Meal Kit Services: A meal kit provider sells pre-portioned ingredients for meals that are prepared at a customer’s home. Some may offer a selection of grocery items as well.
Dark Stores: A dark store is a small store used solely to fulfill online grocery orders. Products offered are often limited and more convenience focused.
Fulfillment Centres: A fulfillment centre is a warehouse used to fulfill customers’ online orders.

The online grocery segment is still developing, and new options are emerging. Table 2 provides a broad overview of existing business models. However, as companies adapt their businesses, the lines that separate the three online models can become blurred. For example:

Grocery stores may look more like online stores. Many grocery stores fulfill online orders from their retail locations, but some of the larger chains are building or have built separate warehouses for online orders.
Delivery services may look more like online stores. Most delivery services do not sell their own groceries, but some are building or have built warehouses and have started selling groceries directly to customers.

Competition in online grocery

Online grocery shopping has brought more choice and innovation to the grocery industry for consumers. But some online services—like those operated by existing grocers or delivery services—may simply create a new way to access existing options. Here’s why:

Grocery stores with online shopping options do not necessarily increase competition. An online platform can sometimes just be a new way to source products from a pre-existing retailer.
Delivery services are more like grocery store partners than independent competitors. Unless they’ve developed their own fulfillment centres, delivery services simply purchase products off the shelves of existing grocers. They can’t charge lower prices than the store they buy from without taking a loss.

On the other hand, online stores are like new grocers, except that they only sell their products online. If they don’t rely on existing grocery stores for product supply, they are better positioned to compete with them.

The introduction of new online options from existing grocers, including those offered through delivery services, has increased competition between them. All of Canada’s large grocers are investing millions of dollars into their online platforms to ensure they remain competitive. Some have even partnered with online grocery technology companies to try to get ahead of their competitors.

These changes have benefited Canadians, including by expanding available grocery options for some consumers, and generally making groceries more accessible through delivery and pick-up. They answer the demand for convenience and alternatives to in-store shopping.

What about Amazon?

Amazon is one of the world’s largest online retailers. Some businesses consider it to be a significant potential competitive threat in Canada’s grocery industry. But, right now, its grocery selection in Canada is limited.

In some countries, like the United States, Amazon offers a wider assortment of groceries online through its website and retail stores (such as Amazon Fresh and Whole Foods).

But, in Canada, Amazon only sells non-perishable food items through its website and Whole Foods does not operate online.

Amazon has not announced whether it plans to introduce additional online grocery offerings in Canada.

Challenges for new, online grocery businesses

The reality, as of today, is that independent online options remain pretty limited. Though there are companies that only sell groceries online (see Table 2 ), we heard that they face challenges growing into the kind of big competitive threat that could take on Canada’s large grocers:

Capital requirements. The costs to build warehouses and distribution centres are high. And finding investors who are willing to support entry and expansion can be difficult.
Product supply. New businesses typically do not have the scale or relationships required to deal directly with manufacturers. Instead, they often have to rely upon the grocery giants—who are their competitors—for product supply. According to online grocers, this dependency makes it more difficult for them to compete on price.
Regulatory requirements. Online grocers can face challenges that a traditional grocery retailer may not. For instance, some municipalities are uncertain as to whether dark stores should be licensed as retail or wholesale companies. In addition, regulations for certain products vary greatly by province, making it difficult for a business to operate nationally.
Consumer hesitancy. A lot of Canadians are used to shopping for groceries in-person. Many like to see and touch their groceries before buying them. That isn’t possible online, so perceptions about freshness and quality may be a concern. Some may also worry about receiving the right items and cost. There are others who just like going to the grocery store or who find online shopping overwhelming.
Geography. Canada is a large country with few densely populated city centres. For online grocers, serving customers who don’t live in urban areas is very costly. As such, they may be less likely to operate in rural communities.

Conclusion on online grocery competition

Currently, grocery competition is mostly centred on grocery stores being the main place for Canadians to do their grocery shopping. However, grocery business models are adapting to the online world and, with that, comes the opportunity for new competitive alternatives to emerge. Truly independent online grocers could meaningfully increase grocery competition in Canada.

Two of the most significant entrants into Canada’s grocery industry have come from abroad: Costco and Walmart.
We reached out to a number of international grocers to better understand what is preventing them from coming to Canada.
Some international grocers are studying, or have studied entering Canada, but none have publicly announced plans to do so soon.

Two of Canada’s grocery giants— Costco and Walmart —are international businesses that have come from outside of the country and currently sell groceries in Canada.

The Bureau reached out to a number of international grocers, who are not currently operating in Canada, to hear from them about their impressions of the Canadian grocery industry. What would make Canada a place they might want to bring their business? Alternatively, what sorts of things might keep them away?

Not all of their answers focused on elements that can be changed or influenced. As an example, Canada’s physical geography and low population density make it hard for new grocers to set up operations in Canada. However, there may be other factors that can be changed to make Canada a more attractive destination for expansion. Knowing how these companies see Canada’s grocery industry can help us better understand the competitive landscape within it.

These are the highlights of what we heard:

Canada’s grocery giants are daunting competitors. All of the international grocers we spoke to said that they would face tough competition from Canadian grocers if they entered Canada. Although one international grocer said they believed they would be able to price competitively despite tough competition from Canadian grocers, another told us that it could be difficult to compete on price if they entered Canada.
Private label groceries are popular in Canada. The international grocers we spoke to all commented on the strength of private label grocery products in Canada. They believe these are high-quality products at good prices. We heard that Canadians’ willingness to purchase private label products can make Canada an attractive country, particularly for grocers that sell a high proportion of these products.
Canada’s unique multicultural grocery experience. We heard that the retail grocery segment in Canada is quite unique in how it serves its multicultural population. A number of Canadian grocers have a vast selection of ethnic products, and in order to compete effectively, any grocer trying to enter the industry will need to establish a similar product selection. As a result, entry into Canada’s grocery industry could be challenging and costly.
The Target experience. The international grocers we spoke to acknowledged that while some companies, such as Costco and Walmart, had been successful in entering Canada, others like Target, had not. These grocers explained that there are different ways to enter a new country, and that those possibilities are expanding because of consumers’ increasing interest in shopping in ways other than in person at a traditional grocery store.
Entering a new country takes a concerted effort. International grocers noted that, for a number of reasons, it is easier for them to continue to expand in their current regions than to come to Canada. They also told us that establishing distribution networks, relationships with Canadian suppliers, and brand recognition would be important steps they would have to take to successfully enter Canada.
Canada’s labelling laws. We heard that laws requiring bilingual labels on packaged foods can be a difficult additional cost for international grocers to take on. However, we also heard that some international grocers are already used to doing this in other countries and do not see it as a problem.

Conclusion on competition from international grocers

The international grocers we spoke with said Canada’s grocery giants would be tough competition. However, if any were to enter Canada, their presence would likely increase competition, lower prices, increase choice, and bring about higher levels of innovation. Through discussions with international grocers, the Bureau heard that some of these businesses are studying, or have studied, entering Canada but none have publicly announced plans to do so soon.

Canada is not alone. Many other countries are also struggling with concentration and high prices in their grocery industries.
We spoke with a number of international competition agencies to better understand what they have tried to increase competition in their countries.
These conversations generated a number of interesting ideas for Canada, and touched on key topics, including grocery codes of conduct, property controls, buying groups, unit pricing rules, and the competitive role of discount grocers.

High grocery prices aren’t just a Canadian issue. A number of countries around the world are grappling with increasing grocery prices.

Many of the Bureau’s international counterparts have done studies of the state of competition in their domestic grocery industries in recent years. We have looked to their work to see what lessons might apply to the Canadian context.

As part of this study, the Bureau spoke with competition authorities in Australia, New Zealand, the United States, Mexico, the United Kingdom, Germany, Norway, Austria, and the European Union.

There were a number of reoccurring themes that came up in these conversations. Here are the highlights of what we heard:

1. Grocery Codes of Conduct

The grocery industry is concentrated in a lot of countries, and when an industry is concentrated, suppliers can be put in a tough position. Just like consumers, grocery suppliers have limited options other than to deal with the largest grocery retailers to sell their products.

This imbalance has been noted in many countries. Each of New Zealand , the United Kingdom , Australia and Mexico has taken steps to balance out the relative power of suppliers and grocers through grocery codes of conduct. These codes have set out the ways in which grocers and suppliers must behave when buying and selling.

For example, in New Zealand, one of the recommendations of the New Zealand Commerce Commission’s (NZCC) market study was to introduce a mandatory grocery code of conduct to govern relationships between the major grocery retailers and suppliers. After their report was published, the government began work on creating a grocery code of conduct. That work is ongoing .

In Canada, the idea of a grocery code of conduct pre-dates this study. In July 2021, federal, provincial, and territorial Ministers called for a grocery code of conduct that would develop a fairer relationship between suppliers and retailers. Canadians can expect this code of conduct to be implemented by the end of 2023 .

Competition law in Canada does not regulate imbalances in bargaining power and the Bureau does not have the ability to enforce a code of conduct . However, a code that improves predictability and suppliers’ willingness to invest or innovate within the industry can be a good thing for consumers. The Bureau is committed to working with the relevant parties to support the implementation of the code in the most pro-competitive way possible.

2. Property Controls

A number of our international counterparts identified real estate restrictive covenants as being harmful to competition. These sorts of property controls came up as an issue, for example, in New Zealand , the United Kingdom , and Australia .

The Australian Competition and Consumer Commission’s (ACCC) market study found property controls to be a major issue. They found that the restrictive covenants in real estate leases did not allow new grocery chains to expand their business. As a result, the ACCC reached a court-enforceable agreement with big grocers in Australia. Under this agreement, the big grocers have to phase out all existing property controls, and are forbidden from entering into any new ones.

3. Buying Groups

In some other countries, we heard that independent grocers have worked together, or with a large grocery chain, to form buying groups. They joined together so that they could get access to lower prices from suppliers than they would be able to individually.

These buying groups—particularly those made up of smaller players — can be pro-competitive . And, in fact, the European Union’s competition authority supported the idea that these buying groups can lower prices for the end consumer .

On the other hand, buying groups can also raise competition concerns. In Canada, certain agreements between competitors can violate the law. They can also lead to businesses sharing information when they should not, and working in other ways that can hurt competition. So, while buying groups can facilitate competition in certain situations, they should always be approached with caution. The Bureau’s approach to buying groups is set out in our Competitor Collaboration Guidelines .

4. Unit Pricing

Competition doesn’t work well unless consumers know where to find the best deals. Unit pricing helps consumers compare grocery prices and find the best value by showing the price of a product based on a standard unit, alongside the total price. We talk more about unit pricing later in this report.

New Zealand , Australia and the United Kingdom all found that unit pricing is a helpful tool for consumers. The NZCC recommended mandatory and consistent use of unit pricing across the country, while the ACCC recommended the introduction of a unit pricing code of conduct to allow consumers to make informed choices.

5. The Competitive Importance of Discount Grocers

When a new foreign grocer comes into a country, it puts pressure on existing grocers to reduce their prices. For example, the ACCC studied what happened to grocery prices when a major, international discount grocer came into Australia. That grocer, ALDI, was found to cause a significant reduction in grocery prices when they opened new stores. Similarly, we heard from our European counterparts that the expansion of discount grocers like ALDI and Lidl has created significant benefits for consumers through lower prices and greater choice. This is not just something that could happen, or happens in other countries: a Canadian example of this was Walmart’s expansion into grocery .

The “ALDI effect”

“...ALDI has been a significant influence on Australian grocery retailing. ALDI has forced Coles and Woolworths to react by reducing prices—specifically in states and localities where ALDI is present. Even if a customer does not shop at ALDI, they obtain significant benefits from having an ALDI in their local area or state, as the Coles and Woolworths stores price more keenly.” Report of the ACCC inquiry into the competitiveness of retail prices for standard groceries , July 2008

Conclusion from international attempts to increase grocery competition

Conversations with the Bureau’s international counterparts yielded a number of helpful ideas to improve grocery competition in Canada. Some of these ideas are otherwise covered in our report—e.g. property controls and unit pricing. Work in other areas is ongoing in Canada—e.g. the grocery code of conduct. Perhaps most interesting is the idea of attracting new businesses to come to Canada and compete. The successful entry of international grocers into the Canadian industry may be the best option to bring about lower prices, greater choice, and increased levels of innovation for the benefit of all Canadians.

Consumers need accurate, timely, and complete information in order to make informed purchasing decisions.
Accessible and harmonized unit pricing requirements and price comparison tools have the potential to empower consumers and improve grocery competition in Canada.

Information helps consumers make the right choices. Without accurate, timely, and complete information, competition suffers and markets fail. Honest competitors lose sales, and consumers end up with goods and services that are not the best choice for them.

To make good choices, consumers must be informed. It’s hard to take advantage of competition if you don’t know where to get the best deal. Grocers send out flyers to households across Canada to convince shoppers to visit their store. But modern technology allows so much more.

Ensuring that Canadians have access to useful information is an easy way to promote competition. We heard that accessible and harmonized unit pricing requirements and price comparison tools can help to empower consumers. We discuss each below.

Unit pricing

Figure 6: unit pricing for different sized containers of orange juice.

Prices and unit prices for different sizes of orange juice. Text version below.

Orange juice 2.63 litres $8.99 - Unit price $0.34 per 100 millilitres Orange juice 1.54 litres $6.49 - Unit price $0.42 per 100 millilitres

Unit pricing helps consumers compare grocery prices and find the best value. It does this by showing the price of a product based on a standard package size, alongside the total price. Figure 6 shows an example of how unit pricing works for two different sized containers of orange juice.

Knowing the unit price helps consumers compare similar products that come in different package sizes. It serves as a quick and easy way to know if a consumer is getting the best deal—without resorting to a calculator or mental math.

Many grocery stores across the country already display unit pricing, including online. But it is currently only required by law in Quebec . That means there are no standards that grocers have to follow in the rest of the country. An additional issue facing consumers looking to compare unit pricing in its current form is that many of the formats used may not be accessible for people with sight loss.

Provincial and territorial governments may wish to consider working together to support the development and implementation of accessible and harmonized unit pricing requirements for grocery retailers in the country. As part of this process, consideration as to whether any such requirements should be imposed on all grocers, or only large chains may be appropriate due to the potential burden on smaller independents. Accessible and harmonized unit pricing requirements could promote competition among grocery retailers and further empower consumers to make informed purchasing decisions.

Price comparison tools

Figure 7: comparison of orange juice prices at select canadian grocers, april 2, 2023.

Various orange juice options and their prices at select Canadian grocers on April 2, 2023. Text version below.

Source: Save.ca .

A price comparison tool is a service that consumers can use to compare prices between grocery stores. Current examples include Flipp , Save.ca , and reebee , among others.

If you search for ‘orange juice’, most of these services can show you flyer clippings from multiple grocers for that product. They can do that because most flyers are available for anyone to view. However, this only allows you to compare prices if they’re in a flyer, and comparisons may not necessarily be between the same brand or size of product (see Figure 7 ).

Some of these services can also search online listings for grocery items. But this information is only available from retailers that have agreed for their products to be displayed.

If all grocers provided their data to these services, it would allow consumers to more easily search and compare prices between grocery stores. However, further study would be required to determine how government could best support consumers in this regard.

During this study, we asked Canadians to share their perspectives on grocery competition in Canada.
This section of the report responds to some of the more prevalent ideas that we heard.

When the Bureau launched this study, it asked Canadians to share what they thought about the current state of grocery competition in Canada. More than 500 Canadians answered the call. This is a summary of what we heard from Canadians:

Idea #1: Canada needs more grocery competition

The Bureau agrees that Canada needs more grocery competition. The Canadian grocery industry is concentrated. While this is not the sole reason grocery prices are high, more competition in the industry could drive down prices.
Based on the findings of this study, the Bureau has made a number of recommendations on steps governments can take to increase competition in Canada’s grocery industry.
This is not a situation unique to the grocery industry. A lot of other Canadian industries are highly concentrated, with a small number of businesses controlling a majority of the sales. Canada needs more competition, both in groceries and across the entire economy.

Canada Needs More Competition

Grocery is not the only Canadian industry that is concentrated.

According to estimates from the Canadian Wireless Telecommunications Association, in the wireless sector, the top three players account for around 87% of total wireless subscribers nationally.

Figure 8: National share of total wireless subscribers by company, Q3 2022

National share of total wireless subscribers at the end of Q3 2022, by company. Text version below.

Rogers: 30.3%
Bell: 28.5%
Telus: 27.8%
Others: 13.4%

Source: Canadian Wireless Telecommunications Association .

Note: Percentages are estimates.

Source: Canadian Wireless Telecommunications Association , Company Reports.

Note: Shares are based on total subscribers (as defined by the Canadian Wireless Telecommunications Association, now the Canadian Telecommunications Association ) at the end of Q3 2022 and only include Canadian wireless providers who publish subscriber data.

Similarly, based on information in a recent report, IBISWorld estimates Air Canada and WestJet’s share of Canada’s scheduled air transportation industry to be 74.1%.

Figure 9: National shares of key players in Canada's scheduled air transportation industry, 2022

National shares of key players in Canada’s scheduled air transportation industry, as of 2022. Text version below.

Air Canada: 55.3%
WestJet: 18.8%
Others: 25.9%

Source: IBISWorld .

Note: These percentages are estimates

Source: Shawn McGrath, IBISWorld (2022), Industry Report 48111CA: Scheduled Air Transportation in Canada.

Idea #2: Large grocers should be broken up

A lot of Canadians argued that Canada’s largest grocers are too big. They wanted these grocers split up into smaller companies to improve competition.
The Bureau’s goal is to encourage competition so that businesses innovate and create better products. Companies can have legitimate reasons for getting big—for example, they can outperform rivals and bring a valuable product to market. The Bureau does not want to eliminate the incentives for companies to do so.
What the Bureau can do is make sure that Canada’s biggest grocers face more competition. The government is currently considering how our competition laws can be updated to better protect and promote competition. The Bureau has made an in-depth submission with a number of ideas on how to improve Canada’s competition laws.
Modernizing and strengthening these laws is key to making sure that big companies are forced to compete. This will benefit consumers by driving down prices, increasing choice, and encouraging innovation.

Idea #3: Grocery prices should be regulated

Grocers are allowed to charge the price the market can bear. There are no laws in Canada that stop grocers from charging the prices of their choosing.
The Competition Act does not give the Bureau the power to regulate grocery prices.
Even in a competitive market, prices will often increase when products are in a period of short supply.
It is important to note that regulations, such as price controls, can often have negative consequences.
Price controls and regulations are blunt tools. It is hard to determine the “right” price for any product, and it is hard to adjust regulated prices quickly when situations change. A free and competitive market is the best way to determine prices for goods.

Idea #4: Big grocers shouldn’t be allowed to buy smaller competitors

Canadians are concerned when a grocer buys one of its competitors. Canada needs more grocery competition, not less.
The Competition Act only allows the Bureau to stop a merger when it can prove, in court, that a deal is likely to significantly harm competition. This can be a hard thing to prove.
The Bureau has made recommendations to the government to make it easier to stop problematic mergers. Canada’s competition laws must be improved to allow the Bureau to be more effective in protecting competition.

Idea #5: The government should stop big grocers from colluding with one another

Collusion happens when competitors agree to work together in a way that can harm competition. For example, agreeing with a competitor to raise prices is a criminal offence that can result in large fines and jail time for those involved.
However, it is not illegal when competitors independently take similar actions, without colluding or communicating with one another.
This means that, even if two grocers raise the price of a product at the same time, they are not necessarily doing anything illegal. They might be doing it because the cost of buying that product has gone up, or because of another innocuous reason.
Anyone who has evidence of two or more businesses entering into an agreement to fix prices or to otherwise collude should contact the Bureau immediately .

Idea #6: Supply management raises grocery prices and should be abolished

Some studies have suggested that supply management—a form of price regulation— results in higher prices .
Canadian supply management affects a number of grocery staples, like milk, dairy, and some poultry. Although supply management policies were introduced in the 1960s to deal with issues, such as price instability in the agricultural sector, they control the quantity of products available for sale as well as the prices at which they are sold.
Where such supply limits exist, we can expect that prices for these products will continue to be higher than they would otherwise be in a free market.

Idea #7: Grocer profits are increasing, and the government should impose windfall taxes to recoup some of these profits

Grocer profits are increasing. The profits of Canada’s three largest grocers increased from $2.4 billion in 2019 to $3.6 billion in 2022. That’s a 50% increase in four years (see Figure 5 ).
Taxation rules are generally outside of the Bureau’s mandate. They are part of a broader societal and policy discussion.

Idea #8: The government should encourage international grocers to enter Canada

This study has found that the entry of international and discount grocers could be one way to help lower grocery costs for Canadians.
In our view, governments should take steps to encourage international grocers to enter the Canadian industry in an effort to help reduce prices and increase competition.

Idea #9: The government needs to take action to stop the big grocers’ business practices that hurt suppliers and result in higher prices for consumers

Large retailers that are able to obtain more favourable terms from their suppliers are better positioned to compete for customers.
Where business practices make it more difficult for other retailers to compete (for example, by increasing their costs), they can raise concern.
As an example, we previously investigated Loblaws’ practices in dealing with its suppliers. During that investigation, Loblaws ended many of the negative business practices that it had historically engaged in. Based on that, and all of the other evidence in front of us, we concluded our investigation.
As stated earlier in this report as well as in the Bureau’s market study notice , we did not focus on issues relating to the purchase of groceries from suppliers by retailers in this study.

Idea #10: “Shrinkflation” should be banned

Shrinkflation is a term used to describe when manufacturers reduce the amount of a product in a package, but keep the price basically the same. This means that consumers get less value for their dollar.
It can be hard for consumers to recognize when this happens. As an example, if a package is reduced from 450 grams to 430 grams it might not get noticed at a glance.
A lot of Canadians expressed concerns about this practice.
However, shrinkflation, in and of itself, is not illegal. Manufacturers and retailers are allowed to sell their products in the quantities they want at whatever price they choose as long as they do not use false or misleading advertising to deceive consumers.
Accessible and harmonized unit pricing requirements may be one way to help combat shrinkflation, and to improve consumer information.

Canada needs more grocery competition. When businesses compete, all Canadians benefit from lower prices, greater choice, and increased levels of innovation. Competition can be a key part of the solution to help keep grocery prices in check.

Over the past eight months, the Bureau has studied Canada’s grocery industry. We have four big ideas, and three commitments of our own, that we believe will make Canada’s grocery industry more competitive.

Ideas for Governments across Canada

Our ideas for governments across Canada are principles-based, and are designed to be flexible and provide decision-makers with guidance on how to encourage more grocery competition in Canada. The Bureau recognizes that governments will need to consider and weigh other factors in deciding whether, and if so, how to implement these recommendations. However, the Bureau is willing to offer its support and work with decision-makers to advance these recommendations in the most pro-competitive way possible.

1. Canada needs a Grocery Innovation Strategy aimed at supporting the emergence of new types of grocery businesses and expanding consumer choice.

Current grocery competition is focused on grocery stores being the main place for Canadians to buy food.
But it is difficult for new grocers to emerge and compete with Canada’s grocery giants. We shouldn’t expect market forces alone to solve this any time soon.
Governments in Canada at the federal, provincial, and territorial levels, should consider working together to develop a Grocery Innovation Strategy aimed at supporting the emergence of new types of grocery businesses—whether online businesses or other industry disruptors.
This could include financial support to incentivize competition and innovation in the industry, including, for example, support for entrepreneurs that want to launch online grocery businesses, as well as measures to simplify or modernize regulatory requirements that can make it difficult for new types of grocery businesses to operate.

2. Federal, provincial and territorial support for the Canadian grocery industry should encourage the growth of independent grocers and the entry of international grocers.

Grants and incentive programs should be directed towards independents, not the grocery giants.
The growth of Canadian independent grocers into stronger regional and potentially national players would meaningfully increase competition in the industry.
Additionally, governments should do all that they can to attract international grocers to Canada, including the easing of any barriers that make industry entry challenging.
The experiences of other countries, such as Australia, have shown that the entrance of major international grocers have driven down prices and improved choice for consumers.

3. Provincial and territorial governments should consider introducing accessible and harmonized unit pricing requirements.

Competition works best when consumers know where to get the best deals.
Right now, consumers have to compare many different products and package sizes to choose what is best for them.
This is a daunting challenge to even the most informed consumer, and out of reach for too many.
The development and implementation of accessible and harmonized unit pricing requirements across Canada would help consumers more easily compare similar products that come in different package sizes.

4. Provincial and territorial governments should take measures to limit property controls in the grocery industry, which could include banning their use.

These restrictive clauses reduce competition and make it harder for new grocery stores to open.

Commitments from the Bureau

In addition to our recommendations for governments across Canada, the Bureau will take three steps, inside of its own mandate, to better promote competition in the Canadian grocery industry. We will:

1. Approach our work in the Canadian grocery industry with heightened vigilance and scrutiny.

We need to be increasingly vigilant in investigating and enforcing allegations of wrongdoing.
The Bureau has recently committed to “operate with heightened vigilance in areas that will have the greatest impact on the affordability of daily life for Canadians”.
This means that investigations in the grocery industry will be at the front and centre of the Bureau’s work.

2. Provide a pro-competitive perspective to support the implementation of Canada’s grocery code of conduct.

The Bureau does not have the ability to enforce a code of conduct.
However, we will work with any resulting governing bodies to effectively promote competition in its decision-making.
A code that improves predictability and suppliers’ willingness to invest or innovate within the grocery industry can be a good thing for consumers.

3. Revisit the findings of our study in three years to assess progress on these recommendations.

The Bureau stands ready to take further action if competition in the grocery industry hasn’t improved.

Anyone wishing to obtain additional information about the Competition Act , the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act , the Precious Metals Marking Act or the program of written opinions, or to file a complaint under any of these acts should contact the Competition Bureau’s Information Centre:

www.competitionbureau.gc.ca

Information Centre Competition Bureau 50 Victoria Street Gatineau, Quebec K1A 0C9

Toll free: 1-800-348-5358 National Capital Region: 819-997-4282 TTY (for hearing impaired) 1-866-694-8389

819-997-0324

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