As of January 1, 2026, the long-awaited Grocery Sector Code of Conduct is officially in effect.
For years, politicians promised this Code would be the silver bullet for food inflation. All major grocers—Loblaw, Walmart, Costco, Metro, and Empire—have finally signed on. But if you checked your receipt this week, you likely noticed something painful: prices haven’t dropped.
Here is the technical reality of what the Code actually does, why “Shrinkflation” has mutated into “Skimpflation,” and the grim forecast for the rest of 2026.
The Hard Truth: The Code Protects Farmers, Not You
The biggest misconception about the Grocery Code is that it regulates consumer prices. It does not.
The Code is strictly a “B2B” (Business-to-Business) framework. It was designed to stop big grocers from bullying suppliers with retroactive fees or “pay-to-play” demands for shelf space. While this helps stabilize the supply chain, it does not mandate price caps.
The “Trickle Down” Theory: The government hopes that if suppliers (like farmers and bakers) are squeezed less by grocers, they might pass those savings on to you. But in a year where Canada’s Food Price Report predicts a 4% to 6% increase in costs, those “savings” are likely just being absorbed by inflation.
The New Enemy: From “Shrinkflation” to “Skimpflation”
While regulators focused on the Code, manufacturers shifted tactics.
You already know Shrinkflation (the 475ml tub of yogurt that used to be 500ml). In 2026, the trend has evolved into “Skimpflation.”
This is where the package size stays the same, but the ingredients degrade.
The Technical Shift: Watch the “Ingredient Deck” on your processed foods. You will see expensive ingredients (like sunflower oil or cocoa butter) being silently swapped for cheaper alternatives (like palm oil or modified milk ingredients) while the price remains $5.99.
The Scorecard: What Changed on Jan 1, 2026?
For policy analysts and shoppers, it is crucial to understand the difference between political promises and the actual new rules.
| Feature | Grocery Code of Conduct (2026) | Consumer Expectations |
|---|---|---|
| Primary Goal | Fair Dealing between Retailers & Suppliers | Lower Shelf Prices |
| Price Controls | None. (Grocers set their own margins) | Price Freezes or Caps |
| Shrinkflation Rules | Silent. (Size changes are “operational”) | Mandatory Labels for downsizing |
| Enforcement | Adjudicator (Can fine for contract breaches) | Fines for Price Gouging |
People Also Ask
When did the Canada Grocery Code of Conduct start?
The Code was fully implemented on January 1, 2026. All major grocers (including Loblaw, Walmart, and Costco) have signed on to the voluntary agreement.
Will the Grocery Code lower food prices?
Likely not. The Code regulates the relationship between suppliers and grocers, not the price consumers pay. Canada’s Food Price Report predicts a further 4-6% increase in food costs for 2026.
What is the difference between Shrinkflation and Skimpflation?
Shrinkflation is reducing the quantity of product (e.g., smaller bag). Skimpflation is reducing the quality of ingredients (e.g., swapping butter for oil) while keeping the price and size the same.
Is Shrinkflation illegal in Canada?
No. As long as the weight listed on the package is accurate, manufacturers are legally allowed to reduce product sizes without explicitly warning consumers.