Up and up and up! New report fore

from Canadian Grocer December/January 2023

by ensembleiq

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UP AND UP AND UP!

New report forecasts food prices to rise 5% to 7% in 2023

By Rebecca Harris

CANADIANS WON’T see relief at the checkout in 2023.

Food prices are forecast to increase 5% to 7%, according to the 13th edition of Canada’s Food Price Report from Dalhousie University, the University of Guelph, the University of British Columbia and the University of Saskatchewan.

By category, vegetables are forecast to see the highest price increase (6% to 8%), but no section of the grocery store is immune. Prices in bakery, dairy and meat are expected to rise 5% to 7%, while seafood comes in at 4% to 6% and fruits at 3% to 5%. Food prices at restaurants are forecast to rise 4% to 6%.

In 2023, a family of four can expect their annual food spend to reach up to a whopping $16,288.41. That’s an increase of $1065.60 over the total annual cost in 2022, according to the study.

Last year’s report predicted an overall food price increase of 5% to 7% in 2022. The researchers say some considered that “alarmist,” but it turned out to be on the conservative side. The actual figure was 10.3% as of September 2022.

“To understand the forecasts for 2023, it’s useful to first look at what happened in 2022 that was either unexpected or was to a greater extent than what was expected,” says Samantha Taylor, senior instructor of accountancy at Dalhousie University.

For example, the ongoing war in Ukraine impacted production and supply of three major commodities in Canada: wheat, sunflower oil and fertilizers.

“We also had inflation at a 40-year high and ongoing effects of the COVID-19-related supply chain disruptions, paired with high fuel prices and a falling Canadian dollar,” says Taylor. “So, in our 2023 numbers we are seeing the effects of the larger-than-expected increase to the 2022 numbers.”

The report lays out how rising prices are negatively impacting Canadians. Citing data from Statistics Canada, the report states food affordability is a nationwide problem with 5.8 million Canadians living in food-insecure households in 2021. And Food Banks Canada research finds the lack of affordability Canadians are facing because of rising food prices resulted in an estimated 23% eating less than they should, while use of food banks has increased by 15%.

Canada's Food Price Report also states that for many Canadians this year, food choices were motivated by the ability to save money at the grocery store. More consumers attempted to save by reading weekly flyers, using coupons, taking advantage of volume discounting and using food-rescue apps.

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