Loblaw inflation report highlights rising food prices in July

As consumers suspected, food prices are rising, says Loblaw Companies Ltd. in its August Food Inflation Report.

The food and pharmacy retailer points to Statistics Canada’s latest Consumer Price Index release earlier this week, which shows food prices rising from 2.8% in June to 3.4% in July.

For instance, coffee and confectionery saw double-digit increases, while fresh fruit rose 3.9%, driven largely by a nearly 30% surge in grape prices. Unfavourable weather in key growing regions is cited as a major factor behind the higher costs.

What’s the beef?

Loblaw says beef demand remains strong this grilling season, with U.S. prices surging to record levels. “This stems from shrinking cattle herds (the smallest since the early 1950s), prolonged droughts, rising feed costs and concerns over future herd growth,” per the report. 

While efforts are being made to rectify this, Loblaw says economists warn that recovery will take a couple years.

At home, potential U.S. tariffs on imported beef trim will impact supply and will increase demand for Canadian imports, says Loblaw. This will put pressure on prices in Canada, where beef trim is the primary ingredient in products such as hamburgers and meatballs.

Full of beans (and watermelon and eggplant)

With summer winding down, Loblaw’s August Food Inflation Report says consumers can expect to see fresh locally-grown watermelon and field vegetables (beans and eggplant, especially) in the produce department.

“Prices for these commodities are often down 15% to 30% at this time of year, as local growers bring their products to market and offer good value compared to international options - which carry higher freight and foreign exchange-related costs (USD to CAD).”