Grocery prices remain high, up 21.4% in three years, even as food inflation slows
Food inflation in Canada has decreased from its peak, but grocery store prices remain significantly higher than a few years ago, according to BNN Bloomberg.
Statistics Canada highlighted that grocery prices have risen by 21.4 percent over the past three years, despite food prices contributing to a decline in overall inflation in April.
The agency reported that grocery inflation was only 1.4 percent in April. Reduced inflation on items such as meat, fruit, seafood, and non-alcoholic beverages contributed to the overall inflation rate dropping to 2.7 percent in April from 2.9 percent in March.
However, the decrease in inflation does not negate the price growth observed in the past several years. Between April 2021 and April 2024, grocery prices increased by 21.4 percent, according to Statistics Canada. RBC analyst Irene Nattel noted that consumers are still dealing with this significant rise.
As a result, shoppers are likely to continue seeking lower prices through discount stores, promotions, and private-label products.
The rise in food prices has prompted many shoppers to alter their habits, opting for discount stores and seeking sales or store-brand products. In response, Canada's largest grocers have expanded their discount offerings across the country.
Statistics Canada noted price decreases in certain food products, such as seafood, bread, fresh fruit, and margarine, while other items, including sugar and syrup, grapes, carrots, and onions, experienced double-digit price increases.
Restaurant price inflation also eased in April, growing by 4.3 percent compared to 5.1 percent in March. Recently, restaurant price growth has outpaced grocery inflation.
Political and public pressure on major grocers has increased as consumers deal with higher food prices. The government has urged grocers to help stabilize prices, and a group of consumers announced a boycott of Loblaw-owned stores this month.
Higher inflation has also contributed to increased food insecurity in Canada. In 2022, 18 percent of families reported experiencing food insecurity in the previous 12 months, up from 16 percent in 2021.
Market watchers are anticipating a potential interest rate cut from the Bank of Canada in June as inflation continues to ease.
Despite positive inflation trends in recent months, BMO chief economist Douglas Porter described June as a “close call,” emphasizing that any rate cuts from the Bank of Canada will be gradual.
