Loblaw report finds global factors are keeping food inflation elevated
Loblaw’s November Food Inflation Report found that Canada’s food inflation rate slightly decreased in October by 3.4%, while the overall inflation rate was 2.2%.
“The decline was driven in part by the removal of tariffs from U.S. imports, and lower costs for some processed foods and fresh vegetables. Higher prices for fresh and frozen chicken and beef moderated the decline,” notes the report.
When many foods follow the same pattern, the CPI’s food category rises, creating broader inflation.
Food inflation from farm to table
“Food inflation becomes clearer when you follow coffee from farm to cup,” notes the report.
At the farm level, growers are paying more for key inputs like fertilizer, energy and labour, while weather and currency swings add additional strain. These inputs increase the cost of green coffee beans. Roasters then face higher bean, energy, packaging and wage costs and as a result, raise wholesale prices. Distribution adds another layer of costs as fuel and freight costs rise.
Retailers like grocery stores and cafés are also managing rising rents, utilities and wages. As a result, the consumer sees higher prices.
“When many foods follow the same pattern, the CPI’s food category rises, creating broader inflation. Coffee’s path shows how global factors—from weather to shipping—combine to keep food prices elevated,” states the report.
READ: How are rising food costs impacting your business?
Looking ahead
The Loblaw report predicts that food inflation in Canada is likely to stay elevated over the next few months, with the expectation that at the end of the year food prices will be about 3-5% higher than in 2024.
The report attributes this increase to persistent cost pressures, including a weak Canadian dollar, supply chain disruption, and climate-driven volatility.
While there is some relief on key commodities, proteins like beef and chicken have seen recent spikes and will remain higher over the coming months.
