Rising food prices in store for 2024

Hey there, time traveller!
This article was published 07/12/2023 (972 days ago), so information in it may no longer be current.

Canadians are spending less on food despite inflation — and in Manitoba, the prices will keep rising, according to a new report.

Four universities jointly released the 14th Canada’s Food Price Report today. The document looks at 2023 and ahead to 2024.

“It’s just been incredibly shocking,” said Sylvain Charlebois, co-author of the report and director of the Agri-Food Analytics Lab at Dalhousie University.

The report outlines a decline in monthly spending on food retail. It compares August 2022 to the same month in 2023.

2024 FOOD REPORT

 

In the former year, Canadians spent $261.24 per capita in August — $9 more than the $252.89 they spent in 2023, the report states. Researchers used Statistics Canada data.

“I started to notice this back in April, and at first I thought, ‘Numbers are wrong, that’s impossible,’” Charlebois said.

He confirmed the trend with other entities collecting similar data, he said.

Overall, the average family of four spent $15,595 on food this year, $693 less than what food price report researchers forecast in 2022.

Manitoba’s overall rate of food inflation was 5.7 per cent year-over-year in 2023.

“I think, really, consumers retreated. If you’re paying more for your mortgage and your rent, it’s easier to trade down at the grocery store,” Charlebois stated.

Going to discount and dollar stores, and buying generic brands, has likely contributed to the spend decline, Charlebois said.

He doesn’t believe theft plays a role. Shoplifting (cases under $5,000) increased 44 per cent in Winnipeg when comparing January to August 2023 to the previous year.

However, food bank use has skyrocketed, Charlebois noted.

“People just have less money to spend on food. That’s basically the bottom line,” he said.

Darren Miller has seen more gift cards and food vouchers being used at Portage Supermarket, the grocery store he co-owns in Portage la Prairie.

Local food banks give out gift cards and vouchers. The uptick in gift card use began after the COVID-19 pandemic started, Miller said.

This year, customers are buying more private-label brands and are more aware of what’s on sale, he added.

He was surprised to hear people are spending less on food.

“I think their dollar amount is less, but they’re spending it more wisely,” he said.

He and staff have devoted more of their time over the past year to changing price tags as costs keep rising.

“The price increases aren’t coming from us,” Miller said, adding they’re coming from sources such as producers and freight.

“Hopefully the price increases are slowing down.”

The new 33-page report predicts Manitoba’s food prices will increase in 2024, though it doesn’t specify how much.

It forecasts an average increase, nationally, between 2.5 and 4.5 per cent. Bakery, meat and vegetable prices are outliers — scholars expect prices for those items will jump between five and seven per cent each.

“Sticker shock season is over,” Charlebois proclaimed. “We’re basically seeing a more normalized food inflation for 2024.”

Prices likely won’t come down, though grocery stores may offer more deals and promotions, he noted.

“When inflation drops, it creates a much more predictable marketplace for the food industry. It’s easier to plan,” Charlebois explained.

Sherry Balaktsis hoped the food price increases would be temporary amid a pandemic, war and supply chain upheaval.

Contrary to the report, Balaktsis feels she’s spending more on food, she said inside a grocery store Thursday.

Other shoppers echoed her.

“I am trying to cut back, and I’m trying to buy things that are on sale,” she said.

“Groceries are crazy, crazy expensive.”

She had heard grocers were decreasing their prices — Canada’s industry minister said in October grocers will offer discounts and price freezes — but she hasn’t seen the sales, she said.

Thirty per cent of Canadians believed price gouging was the biggest reason for rising food prices, an Agri-Food Analytics Lab survey found in April.

However, the last few months of 2023 have seen people spending more money on food, Charlebois noted.

He expects Canadians will pay more for food in 2024.

A family made up of a mother, father, teenage boy and pre-teen girl will likely pay $16,297 on groceries next year, Canada’s Food Price Report forecasts.

Last year’s iteration overestimated how much each demographic would spend.

Climate change, energy costs, inflation, consumer indebtedness and disposable income are among the factors that could significantly impact food prices in the coming year, the report highlights.

“We actually don’t see any conclusive evidence showing that the carbon tax is impacting food prices at retail,” Charlebois said.

Still, academics worry about the industry’s overall competitiveness with the carbon tax, he said.

Thirty scholars from Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia created the report.

The team used predictive analytics models, including machine learning, to project future food prices.

They expect tight household budgets to continue into the new year. The Bank of Canada held its key interest rate steady at five per cent Wednesday. The rate affects mortgages and other loan payments.

gabrielle.piche@winnipegfreepress.com