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09/21/2022

Grocers, it’s time to freeze food prices

Perhaps it’s time for Canadian grocers to take a cue from their European counterparts and freeze prices as consumers take drastic measures to cope with meteoric food inflation
Sylvain Charlebois
Professor, Dalhousie University
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While inflation is showing signs of dissipating, food inflation appears to be on a totally different path, outpacing our general inflation rate for over 12 months now. Statistics Canada just announced that the food inflation rate for retail was 10.8% and 7.4% in food service. Canada ranks third amongst the G7 countries, after Japan at 4.7% and France at 7.7%. Canada’s rate remains below that of Italy (10.6%), the United States (11.8%), the United Kingdom (13.1%) and Germany (16.6%). Still, the cost of groceries is hurting Canadian consumers and the nightmare won’t end anytime soon.

Canadians have been trying to cope with higher food and menu prices in many ways. The Dalhousie University Agri-Food Analytics Lab, in partnership with Caddle, investigated what Canadian consumers are doing to deal with higher food prices in the last year.

The study found more Canadians (15.5%) have started growing their own food just in the last year. A total of 6.2% use hydroponics at home, and 4.5% claim they obtained livestock in the last 12 months.

Others are leveraging loyalty program points to pay for groceries (33.7%), as well as weekly flyers (32.1%) and coupons (23.9%). 

To stretch their grocery budgets further, 19.1% of Canadians have visited discount stores in the last 12 months, and 11.5% have visited dollar stores more often to purchase food. A total of 8% are visiting farmers markets more often, and 7.1% have turned to roadside stands to buy directly from farmers in the last year.

Interestingly, a total of 40.6% of Canadians are trying to waste less food now, a much higher rate than 12 months ago. 

More Canadians (21%) are opting for store labels, which are typically less expensive, while 19.7% are buying more food that is about to expire

The hidden dark side of food inflation is worrisome. Almost 24% of Canadians are now cutting back on the amount of food they purchase due to higher prices, and about 70% of those people are women. Dietary changes have been made by 8.2% just to save money and a grim 7.1% are skipping meals.

A portion (6.6%) of Canadians are paying for their groceries using a credit card without knowing when they will be able to pay it back. 

Coping with food inflation is not a simple matter of finding new strategies. 

Many Canadians are battling it out in the food aisles. In Europe, where food inflation in some regions is even higher than here, grocers are guaranteeing some prices for certain staples, for a month or two, to help low-income families get through this tough time. Those businesses are freezing prices on a limited number of important staples. Notably, these campaigns are all initiated by industry, not government. 

Perhaps it’s time for our own Canadian grocers to sympathize with struggling consumers in meaningful ways. Maybe, just maybe, if they took steps to support consumers, the baseless accusations of “greedflation” would go away, if only for a while.

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