Canadians are taking drastic steps to save on groceries as experts say soaring food prices will continue

Economists were even dismayed to see food price inflation rising at the fastest pace in more than 40 years in August, as new figures from Statistics Canada show that grocery prices continue to rise seemingly unabated.

The new numbers have left many consumers concerned about how long this trend will last, and while there are some signs that food inflation may begin to moderate in the coming months, several factors contributing to higher prices remain.

Meanwhile, some Canadians have already begun taking increasingly drastic steps to save on groceries, including eating less or skipping meals altogether.

In response to rising grocery costs, about 75 percent of Canadians have changed the way they buy food over the past year, according to the The poll was published on Tuesday. New habits include checking weekly flyers for deals and using coupons, switching to in-store brands, shopping at discount and dollar stores, and buying foods that are about to expire.

The survey of 5,000 Canadians, published by the Food Analytics Laboratory at Dalhousie University, in partnership with Consumer Insights. Caddle, on the same day Statistics Canada reported that food price inflation in August came at a rate not seen since 1981.

While growth in the overall CPI slowed slightly to 7.0 percent last month (down from 7.6 percent in July), the annual increase in food prices was 10.8 percent.

“What we see from this data… is that the average Canadian is beyond feeling distressed,” said Ransom Hawley, CEO of Cadel, who noted that the survey was conducted between September 8 and 10, it seems like they are feeling the blow.

Nearly 24 percent of survey respondents said they reduce the amount of food they buy, and Hawley noted that female consumers are doing so in greater numbers, a potentially worrying trend for children and single-parent families. Even more worrying, he said, 7.1 percent said they now skip meals.

“I think he crossed the point of, ‘Okay, I’m going to tighten my belt a little bit. “This is changing consumer behavior that may actually affect their health,” Hawley said.

“People are struggling. They are finding ways to navigate this food-bulge storm, but there is a sense of desperation for many Canadians,” said Sylvain Charlebois, director of the Dalhousie Agri-Food Lab.

Canada’s three biggest grocery chains, Loblaw, Empire (which owns Sobeys) and Metro, have said in recent months that they are seeing consumers shift some of their shopping from premium brand stores to the discount chains they also own, such as No Frills, FreshCo and Food Essentials, on straight.

Andrew Walker, a spokesperson for Empire, said people are also making less impulsive purchases, shifting their spending to less expensive alternatives (eg beef to pork) and hoarding during promotions.

“We fully understand that customers simply will not and often cannot accept cost increases at some of the levels we’ve seen, while also paying more at the pump and for other essential purposes,” he said.

Grocery store CEOs have indicated during recent calls with financial analysts that they see some signs that inflation may have peaked and could improve in the coming months.

However, Walker noted that some parts of the food inflation puzzle remain a problem, including shipping delays, transportation slowdowns, labor shortages, and shortages of raw materials and packaging.

“While fuel costs have decreased recently, they also remain a pressure point. This is what we see across the industry,” he said.

In response to the shift in consumer behavior, Hawley said retailers are more likely to promote their own store-bought products and offer more rewards through loyalty programs, rather than implementing broad price cuts.

Charlebois said consumers can expect more targeted deals and discounts in the coming months.

“We all have to eat,” said Simon Somogyi, professor of food trade at the University of Guelph, noting that while there is some evidence that people are eating less, there is not much difference in demand that repricing by food retailers. retail. “I don’t think we’ll see the effect of lower food demand on price.”

Whether Canada’s top grocers have taken advantage of inflation to raise their prices has become a hotly debated topic in recent months. The three dominant chains vigorously deny these claims.

a star achievement Earlier this year, it was found that the three companies’ gross margins (the difference between what they charge for goods and how much they pay for those products and other costs such as labor) have risen slightly during the pandemic.

The investigation found that even small increases in profit margins accounted for hundreds of millions of dollars in additional profits for companies, and concluded that if gross profit margins remained constant at 2019 levels, shoppers would have Save $1.4 billion on their purchase bills during the previous year.

Grocers told The Star that it’s not true that their increased margins are caused by charging higher prices, instead citing operational efficiencies, lower costs and changing consumer habits, including increased sales at their pharmacies.

Last week, Empire CEO Michael Medline described allegations that grocers are profiting from inflation as “reckless and incendiary attacks.”

Speaking at the company, Medline said: “I am tired of those armchair operators who make so little effort to understand even the basics of our business, but are comfortable sitting on the sidelines to express how Canadian companies are making unreasonable profits on the back of inflation.” Annual meeting of shareholders. “This is absolutely not true.”

Charlebois said he looked into the case of “greed swells” and found no evidence of abuse by grocers.

“Now that that has been said, I actually think there is some work to be done when it comes to the grocery business creating a new social contract,” he said on Wednesday.

One way to show empathy with consumers is for retailers to voluntarily freeze prices on some key staple foods for a period of a few months, something he said some grocers did in Europe.

“Hopefully, one grocer will come up with a bold strategy like price freeze,” Charlebois said, contrasting that with some price-matching grocers, in which case the price may still be high, even if it’s the lowest in the market. “Freezing prices will actually send a clear signal in terms of food inflation.”

The three major grocery chains on Wednesday did not comment on the idea of ​​a temporary price freeze on basic commodities.

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