Food will cost families more than $16,000 in 2023: Report
Canadians won’t see relief at the checkout in 2023.
Food prices are forecast to increase 5% to 7% next year, according to the 13th edition of Canada’s Food Price Report from Dalhousie University, University of Guelph, University of British Columbia and University of Saskatchewan.
By category, vegetables are forecast to see the highest price increase (6% to 8%), but no section of the grocery store is safe from hikes. Prices in bakery, dairy and meat will all see a rise of 5% to 7%, while seafood comes in 4% to 6% and fruit at 3% to 5%. Food prices at restaurants are forecast to rise 4% to 6%.
In 2023, a family of four can expect their annual food spend to reach up to a whopping $16,288.41. That’s an increase of $1,065.60 over the total annual cost in 2022.
Last year’s report predicted an overall food price increase of 5% to 7% in 2022. The researchers say some considered those figures to be “alarmist,” but the prediction turned out to be on the conservative side. The actual figure was 10.3% as of September 2022. The predictions for food price increases were lower in all categories except restaurants.
“To understand the forecasts for 2023, it’s useful to first look at what happened in 2022 that was either unexpected, or was to a greater extent than what was expected,” says Samantha Taylor, senior instructor of accountancy at Dalhousie University.
For example, the ongoing war in Ukraine impacted production and supply of three major commodities in Canada: wheat, sunflower oil and fertilizers.
“We also had inflation at a 40-year high and ongoing effects of the COVID-19-related supply chain disruptions, paired with high fuel prices and a falling Canadian dollar,” Taylor says. “So, in our 2023 numbers we are seeing the effects of the larger-than-expected increase to the 2022 numbers.”
The report lays out how rising prices are negatively impacting Canadians. Citing outside sources, it states food affordability is a nationwide problem, with 5.8 million Canadians, including 1.4 million children in the 10 provinces, living in food-insecure households in 2021. The lack of affordability Canadians are facing as a result of rising food prices has resulted in an estimated 23% eating less than they should, while use of food banks has increased by 15%.
The report also states that for many Canadians this year, food choices were motivated by the ability to save money at the grocery store. More consumers attempted to save by reading weekly flyers, using coupons, taking advantage of volume discounting, and using food-rescue apps.
“When you factor in what’s going on with rent increases, mortgage interest rates, higher utility costs and an increase [in food costs] of over $1,000 per family of four, consumers are really being squeezed in all areas of their basic needs,” says Taylor.
In terms of how grocers are responding, Taylor points to Loblaw, which announced a price-freeze on more than 500 private label products until the end of January 2023. “I’ll be interested to see if that extension of goodwill and consumer empathy will extend beyond January 31,” she says. “There is a good opportunity for grocers to really show that empathy on a number of different scales and sentiments to help Canadian consumers.”
