Canadian grocery prices continue their meteoric rise, rising at the fastest rate since 1981

Shea McInnis loved to cook.

But higher prices have reduced the doctoral student to basic meal planning on a shoestring budget.

“Now it’s just about the nutrition that I can produce with the dollars that I have,” said McInnes, who attends Saint Mary’s University in Halifax. “I make a lot of decisions based on whether there is a sale. The enjoyment and delight are gone.”

Food inflation remains stubbornly high in Canada as grocery prices rose at the fastest pace in more than four decades last month.

While headline inflation moderated in August, the cost of food purchased in stores rose a staggering 10.8 percent compared to a year earlier.

That is the fastest clip recorded by Statistics Canada since 1981.

Higher prices swept almost every grocery store aisle.

Even items once considered cheaper substitutes for more expensive products were not immune to inflation.

For example, frozen and dried vegetables, generally considered a budget option, were up 14.1% last month compared to a year ago, while fresh vegetables were up a more modest 9.3%.

A similar trend seemed to develop in the meat department.

“A few months ago, when beef and pork prices were rising significantly, you could substitute chicken,” said James Orlando, director of TD Economics.

“Now the opposite is happening, where beef and pork price inflation is slowing and chicken prices are rising.”

Several staple foods also saw significantly higher prices.

Flour prices rose 23.5% in August compared to the same month last year, pasta prices rose 20.7%, bread 17.6%, eggs 10.9% , fresh fruit 13.2% and fats and oils 27.7%.

Even the plain potato achieved double-digit price gains.

Sustained higher prices are prompting Canadians to adopt new shopping habits to save money, according to a new survey released Tuesday.

The survey found that Canadian consumers are shopping more at discount stores, buying cheaper store brands, using loyalty programs and browsing weekly flyers for deals.

“Food inflation persists and is really starting to determine where and how people buy food,” said Sylvain Charlebois, professor of food distribution and policy at Dalhousie University and director of the Agri-Food Analysis Laboratory, which conducted the survey. along with Caddle. an online data platform.

The survey also found that almost a quarter of Canadians reduced the amount of food they bought in the past year due to high grocery prices.

“Some people are actually buying less food,” Charlebois said. “Many Canadians are making dietary concessions.”

In an effort to save money, McInnis said he has cut back on both candy and healthy foods.

“I really enjoyed going to the bakery section and buying some cookies or a cake as a gift,” she said. “But now that I’m trying to get as many miles for my money as possible, I’ve eliminated that.”

He has also stopped eating so much salad. The rising cost of vegetables and the risk of spoilage with fresh food makes it not even worth it, she said.

“I’ve definitely made sacrifices at the grocery store to try to save money,” McInnes said.

Some relief from rising food prices could be expected, as lower input costs reduce pressure on food prices.

“With transportation costs and agricultural commodity prices now off their peaks, the trend in food price inflation should start to soften towards the end of this year and into 2023,” said Andrew Grantham, economist CIBC Capital Markets senior, in a note to clients.

Michael Medline, chairman and CEO of Sobeys Inc., said last week that inflation at grocery stores may have peaked in Canada as price increases from food manufacturers level off.

The amount and rate of cost increases that food suppliers pass on to the supermarket chain have started to slow in recent weeks, he said during an earnings call.

Grocers have been widely criticized for high food prices and posting strong profits during the pandemic.

But Michelle Wasylyshen, a spokeswoman for the Retail Council of CanadaHe said the shopkeepers are not to blame.

Instead, he said supply chain disruptions, extreme weather events and the invasion of Ukraine have raised costs for farmers and importers.

In turn, they have raised prices for food manufacturers, processors and wholesalers, who pass those price increases on to grocery stores.

This report from The Canadian Press was first published on September 20, 2022.

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