My hardware store sells food grade tubing -- it is often used for water lines, and such. Are you SURE what yours sells isn't food grade? Check the packaging carefully -- it might not be that obvious.
And yes, if your racking cane/autosiphon/etc. are all the right size, you can definitely use larger diameter hose for racking. Just be careful to throttle back a bit (pinch the hose) when you first start moving beer around -- it will splash and aerate more at the higher rate of flow.