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A year ago, Canada’s Food Price Report predicted that 2022 would see prices go up by five to seven per cent.
Of course, it didn’t turn out that way, as they have skyrocketed by just over 10 per cent.
“Inflation in general was higher in Canada, so food prices were higher due to that. We also had some continuation of COVID-19, which had an impact on the supply chain, we had high oil prices so the cost of getting the food from wherever it is to wherever it needs to be, that all impacts the higher-than-expected prices, as well as the falling Canadian dollar,” said Samantha Taylor of the Dalhousie faculty of management and a co-author of the report.
Again, this year’s food price report, the 13th edition, forecasts that in 2023 overall food prices will increase by five to seven per cent.
“We are predicting, for example, that a family of four, including a man (age 31-50), woman (age 31-50), boy (age 14-18) and girl (age 9-13) will have an annual food expenditure of up to $16,288.41, which is an increase of up to $1,065.60 from what was observed as the total annual cost in 2022,” the report says.
The food category expected to see the greatest increase in 2023 is vegetables, but Taylor hesitated to say there could be a direct connection between higher food costs and worsening health outcomes.
“Because we have not tested that hypothesis; however, what I can say is that we’re looking this year at an increase of the cost to feed a family of four of over $1,000, versus what it cost in 2022. That, combined with increased mortgage interest rates, with a worsening economic outlook, people will have less disposable income, and people will need to make choices,” said Taylor, who asked a dietician for strategy suggestions for a family.
“She suggested buying frozen vegetables (and) freezing the vegetables that you get that don’t have as long a shelf life as they used to. The report (uses the term shelflation) and that refers to the fact that due to supply chain delays, food is not lasting as long when you bring it home.”
Fuel, labour driving costs
Food price increases vary from province to province because of differences in cost inputs, primarily fuel and labour, said Taylor, who is a senior instructor of accountancy at the Rowe School of Business and a Chartered Professional Accountant educator.
“We had labour shortages blanket Canada, but some regions are going to be hit a little bit harder, so all those cost inputs are going to increase the cost consumers pay to take those goods home,” she said.
“We’re anticipating that the Canadian dollar will be higher towards the end of 2023, so that should help ease some of the price increases that we will see next year. We anticipate prices will increase but then, hopefully, level off with that increase in the dollar. That’s because the Canadian dollar will have stronger purchasing power for those goods coming in from outside Canada.”
The research done for the report shows that two-thirds of Canadians feel they are absorbing more than their fair share of price increases
“One of the things that could help prices stabilize would be a grocer code of conduct,” Taylor said.
Other findings from Canada’s Food Price Report:
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More consumers are trying to save during grocery trips by reading weekly flyers and using coupons.
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Consumers under 35 are more than twice as likely to have increased their use of coupons, and those who earn less than $50,000 per year are using coupons more often than those with higher incomes.
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Volume discounting (buying bulk products or large quantities to save money) seems to be more popular with Canadian shoppers, however, 54 per cent feel it is unfair to smaller households and single people, and 47 per cent feel volume discounts lead to more food waste.
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The lack of affordability Canadians are facing with rising food prices has resulted in an estimated 23 per cent reporting they eat less than they should.
Canada’s Food Price Report is a collaborative effort by Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.
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