Is Canadian inflation cooling? Certainly grocery inflation isn’t!

February 22, 2023February 22, 2023 Top Quality Canada canada, canadian inflation, food prices in Canada, foor, grocery stores, inflation, meat prices, ontario, rising inflation, toronto, vancouver

As many inflation specialist predict, Canadian inflation is cooling. This may be true in other sectors, but certainly in grocery store it isn’t the case! New data from Statistics Canada, released on Tuesday, reveals that food costs are rising despite a slight decline in headline inflation at the beginning of 2023.

The government reported that while the remainder of the Consumer Price Index (CPI) components slowed to a yearly pace of 5.9 percent in January, food prices increased by 10.4% year over year, up marginally from December.

For 13 consecutive months, the price of food has increased faster than overall inflation. And while StatCan’s CPI tracks a representative basket of goods to show overall trends in Canada, Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, warns that if consumers’ diets primarily consist of the fresh foods and grains that are particularly hard hit, they may find their personal inflation rate is even higher.

Prices for meat (up 7.3%), bakery goods (15.5%), dairy (12.4%), and fresh vegetables increased in grocery stores in January (up 14.7 per cent).

Yet, there were some aisles of relief: in particular, lettuce saw a 5.8% price drop last month, along with oranges (down 1.8%), pasta (down 0.5%), and breakfast cereals (down 0.5%). (down 2.9 per cent). Fish prices decreased little, whether it was canned, fresh, or frozen.

Many international causes causing increasing food prices were identified by Statistics Canada. In January, chicken prices increased 9.0 percent year over year. The agency attributed the price increases to avian flu outbreaks, high seasonal demand, and ongoing supply chain problems.

Grocery price transparency

The heads of Canada’s three largest grocery chains, Empire Co. Ltd., Metro Inc., and Loblaw Co. Ltd., were called before a House of Commons committee last week to discuss the causes of food inflation. At previous committee hearings on the subject of rising food prices, executives from all three firms gave testimony, but not their CEOs. Loblaw recently recognised that it has become the “face of food inflation,” but it also claimed that it only earned less than $4 in profit for every $100 spent on groceries in response to consumer dissatisfaction expressed online.

Canadian meat prices gone through the roof

Canadian food prices were always higher compared to European food prices, with one exception, meat. Meat prices in Canada were cheap in relation to European meat prices. But that might also be a thing of the past! Canadian food inflation did not spare meat industry or at least it did not spare the consumers. While Canadians love their barbecues, this Spring and Summer, most likely, less meat will be consumed due to extreme meat prices. Favourite steaks like Flank steak, T-bone and Tenderloin steak could be luxury for many. But why is that? Most of Canadian meat isn’t imported. Cattle did’t get more expansive, or did they? What is left is slaughter houses charging more, transportation, grocery stores and butcher shops.