Loblaw inflation report attributes rising costs in October to tight supply

Loblaw’s October Food Inflation Report found that grocery prices in Canada rose by 4%, with general CPI increasing 2.4% this month. 

The rises both in prices and general CPI are attributed to ongoing pressures from key categories. 

Tariff removal offers relief 

The report states that the removal of the federal government's counter-tariffs on U.S. imports has helped moderate food inflation, “which are expected to be fully realized in the coming weeks as retailers sell through inventory.” 

Key factors driving food prices

The October report also finds items like fresh and frozen meat, coffee and produce are putting upward pressure on prices due in part to lower supply.

Meat continues to be one of the biggest contributors to food inflation, with beef leading the way. 

Supplier prices have climbed due to higher feed and energy costs, as well as tight livestock supplies caused by dry weather in key producing regions. Pork and poultry have been slightly more stable, though still above last year’s levels. 

“With feed costs and transportation expenses showing little sign of easing, consumers can expect meat prices to remain high through the fall,” states the report. 

Retailers will continue working to secure affordable supply including from other source countries such as Australia and Mexico and promote value cuts where possible. 

Produce prices remain volatile and are expected to rise further as colder weather reduces Canadian supply and imports from the U.S. increase. 

California’s poor growing season will likely push up the cost of many fruits and vegetables over the coming months. Freight and labour costs add to this pressure, meaning produce could continue to increase compared to last year.

Good news commodities 

Demand for chocolate has decreased, pushing cocoa prices down. Improved crop forecasts in West Africa are also easing supply worries.

Sugar prices are expected to drop due to large harvests in Brazil and Thailand.

Brazil’s bigger-than-expected orange crop is easing concerns about shortages, helping prices to settle.