KPMG study finds Canadians want retailers to make it easier to support local businesses amid trade war threats
As more Canadians choose to buy local products amid the looming threat of U.S. tariffs, a new survey from KPMG in Canada finds they want retailers to make it easier for them to do so. More than nine in 10 say they want stores to promote Canadian products and think grocery stores should be required to give them preferential shelf space with nearly 70% wanting them to stop selling U.S. products altogether.
"We're seeing a significant shift in the shopping behaviour of Canadians, who are fired up to support local producers, artisans, and companies. As many as 70% of Canadians in our survey were clear—they will boycott U.S. products with eight in 10 actively looking for non-U.S. versions of products when a Canadian one isn't available." says Kostya Polyakov, partner and national consumer and retail leader at KPMG in Canada. "Canadians are fighting for Canada, to keep jobs and their dollars within the community. But it's not always easy at first glance to know if what they're buying is Canadian and increasingly, they now demand retailers make it easier for them, calling out those that don't."
With 84% of Canadians reading packages to see where products are made and three-quarters willing to pay more to buy a Canadian product over one that's made in the U.S., retailers already see the change in shopping habits. Loblaw Companies Ltd. recently reported a 10% increase in sales of items labelled product of Canada, made in Canada or produced in Canada for the first week of February compared to the previous week.
READ: Canada's bracing for Trump's tariffs. Here's how it's expected to respond
Key poll highlights:
- 93% of Canadians say they want retailers and grocery stores to identify and promote Canadian products
- 68% think, in a trade war, grocery stores should stop selling U.S. products and produce
- 85% say the trade war has prompted them to support more local producers or companies
- 70% of Canadian consumers say they will boycott U.S. products, including produce and other groceries should U.S. President Donald Trump follow through with a 25% tariff on imports from Canada
- 80% say they are purposefully looking for a non-U.S. version (e.g., if fruit is available from either the U.S. or Peru, choosing the Peruvian version) if a Canadian product equivalent isn't available
- 89% say Canadian grocery stores should be required to give preferential shelf space to Canadian products
- 84% say they are paying more attention to the origin of where products are made by reading the labels
- 77% say they will buy Canadian products even if it costs more
Labels matter
Poll findings reveal consumers are paying attention to more than just labels as the vast majority (93%) hope—and expect—Canadian retailers are searching for non-U.S. suppliers with 85% saying they will think twice about buying from stores that move its entire operations to the U.S.
"As consumers increasingly prioritize Canadian products, it is crucial for retailers to adjust their supply chain so they can continue to operate locally. This not only serves to build trust with customers by aligning to their expectations but also helps strengthen our national economy," says Polyakov. "There is also strong agreement among survey respondents that inter-provincial trade barriers must be eliminated so they can have enough product choice to continue buying Canadian."
Despite the surge of national pride, affordability remains a top concern as 86% are worried Canada will slide into a recession and 90% think governments should lower the cost of everyday essentials by reducing taxes or providing tax credits to help consumers through a tariff war.
"While it's clear Canadians will pay extra to support the home team, the impact of the rising cost of essentials is also top of mind for many," says Mr. Polyakov. "With consumers strongly expecting to see their grocery bills go up, they plan to cut back on non-essential spending, which could hit sectors like dining and entertainment hard.
"The question is, will this trend of buying Canadian last beyond a few months or quarters?"
Additional poll findings:
- 93% say they hope – and expect - Canadian retailers are searching for non-U.S. suppliers
- 85% say they will think twice about buying from a company that deserts Canada and moves its entire operations to the U.S.
- 96% say inter-provincial trade barriers must be eliminated to make it possible for consumers to buy Canadian and have a choice of Canadian products
- 86% say they are worried that Canada will slide into a recession
- 24% are willing to pay 2-5 % more to make sure they are buying a Canadian product over one that's made in the U.S.
- 16 % are willing to pay 6-10% more
- 14% are willing to pay more than 11% more
- 25% say they can't afford any increase in prices
- 90% say to help consumers through a tariff war, governments should reduce the cost of everyday essentials, like food and gas, by reducing taxes or providing tax credits
- 94% expect the cost of groceries to rise for their household
