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Food prices forecast to rise up to 4.5% in 2024: Report

As consumers’ grocery bills continue to increase, they’re looking for ways to cut back
woman thinking in grocery store

The forecast is in: Food prices will increase 2.5% to 4.5% in 2024. For a family of four, that adds up to a $16,297.20 grocery bill for the year, up $710.79 compared to 2023, according to the 14th edition of Canada’s Food Price Report from Dalhousie UniversityUniversity of GuelphUniversity of British Columbia and University of Saskatchewan

By category, Canadians will most feel the pinch in bakery, meat and vegetables, where price increases are set to rise 5% to 7% each. Prices in dairy and fruit are both forecast to increase 1% to 3%, and seafood is expected to rise 3% to 5% higher. The researchers say the factors driving rising food prices include geopolitical conflicts, inflation and energy cost, among others. 

“It’s starting to ease a bit. We’re already seeing that, and we’re going to see that through the end of this year,” says Janet Music, research coordinator at Dalhousie’s Agri-food Analytics Lab. “There are categories that are higher than others – bakery, for example, is dependent on grain, so we’re still seeing residual effects from the war in Ukraine.” Meanwhile, vegetables are energy-dependent and meat is dependent on both energy and grain. While other categories are stabilizing, Music says, “the problem is it’s slowing, but it’s still high.” 

READ: Millennial, gen Z grocery shopping habits change as cost of living increases

The ever-rising cost of food comes as Canadians face financial strains on all fronts. The report states: “Canadians are facing stricter budgets as they contend with higher costs of living as rent continues to increase, interest rates have risen, and household debt is up.” Canadians are also still feeling the effects of inflation, and household expenses like rent and utilities are also increasing year over year. Stats Canada data cited in the report found Canadians reduced the amount they spent in food and beverage retail by 3.26% between 2022 and 2023. 

“Because shelter is taking so much of that discretionary spending, people are switching to lower-quality food or even less food, which becomes alarming if people are switching away from healthy nutrients and towards cheaper, calorie-dense food, which could have health impacts in the long run,” Music says. 

The report also highlights the issue of food insecurity, which is hitting home for more Canadians. Food Banks Canada’s 2023 Hunger Count revealed there were nearly two million visits to food banks in Canada, a 32% increase compared to March 2022 and a very significant 78.5% increase over March 2019. This is the highest level of food bank use in Canada on record.

“Food bank usage is through the roof… That is a serious concern and it shows the flip side of the ‘people spending less on food’ statistic,” says Music. “[People] can’t not eat, so where is that food coming from? In part, it’s coming from food banks.” 

As prices soar and many Canadians struggle to put food on the table, trust in grocers is eroding. The report notes there were widespread concerns about corporate behaviour, with allegations of profiteering by Canada’s major grocery chains frequently reported in the media and the subject of government attention. An April 2023 survey by Agri-food Analytics Lab by Dalhousie University found that 30% of Canadians believed price gouging was the primary reason for escalating food prices. 

However, the Food Price Report notes Bank of Canada data indicated that while retailers’ measured markups grew after COVID-19, the markup was inflationary. “The grocers have been painted as the villain because I think we needed a villain,” says Music. “It kind of focuses people’s anger in a single place. But I don’t necessarily think it is the sole responsibility of the retailers. They probably bear some of the burden of inflated costs, but certainly not as much as they’ve been accused of.” 

The researchers believe the new code of conduct will help stabilize prices, among other benefits like promoting innovation and enhancing innovation. “Having retailers adhere to that code of conduct and giving the code some teeth… that could potentially impact food prices in the medium run,” says Music. “But until they make that kind of commitment, we’re not going to see a huge change because we don’t have buy-in from Walmart and Loblaws and they’re two of the biggest.” 

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