Average family grocery bill to go up another $700 next year: Canada's Food Price Report

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There’s no doubt that Canadians struggled with food prices in 2023. Facing elevated costs, people spent less on groceries and at restaurants this year, highlights Canada’s Food Price Report 2024, conducted annually by four universities from coast to coast.

Retail sales data suggests that Canadians either compromised on the quantity or quality of the food they bought and ate less or slashed waste. According to the report, changing shopping habits meant a family of four cut their food spending by $693 in 2023.

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Contending with rising rent and utilities costs and mounting debt, Canadians responded by trading down, shopping at different stores and buying cheaper brands, says Sylvain Charlebois, project lead and director of the Agri-Food Analytics Lab at Dalhousie University. “Shelter costs have hit a lot of Canadians quite hard this year, which prevented them from spending the money they wanted to spend at the grocery store.”

In March alone, 1.9 million people visited a food bank somewhere in Canada, marking the highest increase on record, according to the Food Banks Canada HungerCount 2023 report. Visits were up 32 per cent compared to March 2022 and 78.5 per cent compared to March 2019.

“It’s been a really rough year for Canadians,” says Charlebois. “The fact that people were spending less for a while on food is just not something we were expecting.”

Though the report predicts a total increase in food prices between 2.5 and 4.5 per cent and estimates that a family of four will spend $16,297.20 on food in 2024 (an increase of $701.79), things are looking up.

By now, inflation is a mainstay of our collective vocabulary, but “deflation” might make a dent in 2024. Models predict “a mild deflationary trend,” with prices expected to drop for many foods. “The first part of the year will be about the end of the food inflation storm. So we’ll get back to some sort of normalcy when it comes to food inflation.”

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The report forecasted that prices for bakery, meat and vegetables could see the highest increases in 2024, from five to seven per cent. Restaurant and seafood costs could jump three to five per cent, and dairy and fruit one to three per cent. Prices across all categories could rise by as much as 4.5 per cent.

“Climate change stands as the most substantial threat to the agri-food sector, and it will persist in driving food prices upward,” the report underscores. Geopolitical conflicts in Ukraine and the Middle East are also factors. If oil prices rise, commodity prices typically increase as well.

Looking for deals is now second nature for Canadians, says Charlebois. For grocers to win over a frugal market, it’s not enough to match prices. They’ll have to beat them. “2024 should be a better year for consumers operating on a tight budget.”

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