Grocery prices on the rise next year

Canadian consumers should expect to pay more at the grocery checkout next year.

A new report says the average household in Canada will spend $8,631 on groceries and restaurant meals next year, up by $345 because of food inflation.

The University of Guelph's latest forecast estimates that food inflation could be between two and four per cent in 2016 — compared with 4.1 per cent this year.

The school's Food Institute estimates food inflation in 2015 cost the average Canadian household an extra $325 this year.

The Food Institute says a combination of factors are pushing up prices, including the impact of climate change and the high value of the American dollar, which increases the price of imports from the United States.

"For every cent the dollar drops, foods that are imported likely increase one per cent or more," said Sylvain Charlebois, lead author of the sixth annual report. "For fruits and vegetables, unlike with meats, it’s more challenging to find substitutes in Canada, so shoppers will have to cope with higher prices.”

In 2015, a currency drop led to fruits, vegetables and nuts increasing in price by nine to 10 per cent. Researchers anticipate that those prices could increase in 2016 by up to 4.5 per cent. The report also suggest that meat prices, which rose five per cent in 2015, could rise by 4.5 per cent in 2016.

Researchers do not anticipate Canadian grocery shopper patterns to be affected by a statement from the World Health Organization earlier this year saying processed meats increase cancer risk, but higher food prices could lead consumers to seek alternative protein sources like fish, lentils or chickpeas. Higher prices may also lead consumers to seek out better quality or specialty cuts of meat.

The latest Statistics Canada data shows overall consumer prices were up one per cent in the 12 months to October, with a decline in fuel prices offsetting increases in most other spending categories.