Feeling squeezed

Canadians aren't feeling the pinch of rising inflation and food prices: it’s more like a body slam. That’s according to Ransom Hawley, CEO at Caddle, commenting on rising food prices on a recent webinar with Sylvain Charlebois, senior director, Agri- Food Analytics Lab at Dalhousie University.

The discussion was based on two waves of research conducted by Caddle in Sept. 2021 and Jan. 2022. More than 10,000 Canadians were surveyed on their attitudes and perceptions regarding food inflation. Not surprisingly, 89% of Canadians believe food prices are higher than six months ago. Hawley said there’s a “perfect storm of issues,” from high inflation (4.8%) to soaring housing prices to supply chain issues. “It’s quite alarming [but] there are opportunities for grocery retailers and brands to help Canadians, and it's good for business.”

The meat category was the hardest hit, with more than four in five Canadians noticing the change (83.3%), followed by vegetables (71.7%) and fruits (71.5%). Canadians’ perceptions of dairy price increases had the highest jump: from 47.4% in Sept. 2021 to 56.4% in January 2022.

How are Canadians coping? They’re becoming more frugal at the grocery store, said Charlebois. “They’ll be looking for deals, they’ll be trading down, and they may change their buying patterns from one [department] to another,” he said. As an example, Charlebois suspects more shoppers will switch to frozen fruits and vegetables from fresh, in light of ongoing supply chain challenges.

The survey also found one in five Canadians will change where they shop because of high costs. More than half (51.1%) have reduced meat purchases in the past six months due to higher prices. Among other money-saving options: 73.3% of Canadians follow a budget and 68.4% use phone apps to check prices.

Consumers are also trying to save money by using flyers (39.3%) and coupons (33.3%), as well as buying private label products (30.2%) and discounted “enjoy tonight” items (18.8%). “Across the board, the tools Canadians are using are increasing,” said Hawley. “So, they’re using their Swiss Army knife of ways they can save.”

This article appeared in Canadian Grocer's February 2022 issue.​​​​​​​