Prepare to dish out even more for your groceries next year.
A new report released today predicts that in 2023, Canadians can expect an overall food price increase of 5% to 7%.
“We were hoping to have better news for Canadians, given the difficulties experienced in 2022, but our models tell us a different story,” authors of Canada’s Food Price Report 2023 wrote.
“Like 2022, we anticipate 2023 to be challenging for Canadians at the grocery store, especially for households with lower means.”
The 13th annual edition of the food price report notes the same family of four featured last year can expect an annual food expenditure of up to $16,288.41 in 2023.
That’s an increase of up to $1065.60 over the total annual cost in 2022.
Vegetable prices expected to rise most
While the cost of foods in all categories are expected to rise, vegetables are predicted to climb the most with an anticipated increase of 6% to 8%.
Bakery, dairy, and meat are expected to rise by 4% to 6%. Seafood will jump 4% to 6%, fruit 3% to 5%, and restaurants 4% to 6%.
“In 2023, it is expected that Canadians will continue to feel the effects of high food inflation, and food insecurity/affordability will also be a big issue with rising food prices,” the report’s authors wrote.
“The effects of climate change and the impact of high transportation costs, as a result of higher oil prices, will also continue through next year.”
The report’s authors said all provinces could see price increases of up to 7% next year.
‘Feeling a bit anxious’
For families already struggling and pinching pennies, the news is concerning.
“The cost of living has just increased dramatically. I’m not sure how many more changes I can actually make,” one Cole Harbour woman told the Halifax Examiner in an interview.
“I’m feeling a bit anxious. We’ve already cut cable, we’re trying not to turn the heat on if we don’t need to. We’re feeling very strained.”
Shannon, who didn’t want to use her last name over concerns about work-related repercussions, said the rising cost of food and its impact is a regular topic of discussion among her friends and family members.
It’s also a hot topic of discussion on many of the social media sites and in the groups she frequents. Friends and family share photos of some of the more outrageous prices they find on grocery items.
“I’m not personally feeling this, but I know that people out there literally wonder where their next meal might be coming from, and that shouldn’t be happening anywhere,” she said.
‘It really is quite startling’
Shannon, who lives with her husband and six-year-old son, now finds herself sometimes skipping lunch and just working through until supper. She regularly uses apps to track down weekly grocery deals, no longer goes to restaurants, and finds she and her husband are both eating smaller portions.
Her grocery shopping environment looks a bit different these days too. She said while she used to frequent the top grocery chains, she almost exclusively shops at Walmart and Giant Tiger because of the money she saves.
“If a month goes by and I go into one of the main grocery chains to get one or two things, I’ll walk around and I’m like, ‘Oh my God, oh my God, oh my God,’” she said.
“There are TikTok stories of people just walking around doing that, so there’s definitely something going on here. We’re not alone, this is happening all over the country, and it really is quite startling.”
Not being able to regularly afford fresh fruit for her six-year-old son’s school lunches is also a source of frustration. Finger foods like grapes, fresh raspberries, or blueberries are often beyond Shannon’s budget.
She also expressed frustration over the escalating cost of food at the same time reports show huge profits for major grocery retailers.
“I saw an article about how people are using food banks more than they ever have before, and some are doing it for the very first time,” Shannon said.
“Then I’m scrolling a bit further and see another article that says grocery chains have pulled in record profits compared to last year’s earnings and I want to throw my phone out the window. We can see what is going on here and we’re helpless to do anything about it.”
10.3% increase in 2022
Many of Shannon’s concerns and experiences are reflected in the 2023 food report.
Authors found that for many Canadians in 2022, food choices were motivated by savings.
Consumers did this by reading weekly flyers, using food rescuing apps and coupons, and using volume discounting.
“Avenues like volume discounting…seem to be more popular with Canadian shoppers, however 54% feel it is unfair to smaller households/single people, and 47% feel volume discounts lead to more food waste,” the report found.
It also noted rising food prices has resulted in an estimated 23% of Canadians reporting they eat less than they should.
“In normal years, food banks tend to see a slow-down of use in summer months, but last summer there was no slow-down and food banks faced their toughest summer in 41 years,” the report said.
Although last year’s food report predicted an overall 2022 food price increase of 5% to 7%, many factors-including Russia’s invasion of Ukraine–led to an increase that surpassed that.
“At 7%, our forecast a year ago was considered by many to be alarmist, yet here we are with a food inflation rate above 10%,” the report said.
Supply chain disruptions and labour shortages due to ongoing pandemic repercussions, adverse climate events, high oil prices, a falling Canadian dollar, rising geopolitical tensions, and the highest rate of food inflation since the 1980s were all identified as contributing factors.
‘Constants’ going forward
The 13th annual food report is a collaboration between researchers at Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.
Andrea Rankin, one of the report’s co-authors and a research associate at Dalhousie University’s Agri-Food Analytics Lab, said in an interview that they really had hoped to have better news to share.
“Everyone is going to be feeling in the next year a bit of that pressure…But I don’t think that it should be entirely a panicking situation,” Rankin said.
“Nova Scotia is a lot of smaller communities, so we know a lot of our friends and family, and I think that’s something that you may be able to rely on as far as trying to be able to mitigate some costs…relying on the Nova Scotia community that we have, there’s a lot of different and creative ways to kind of mitigate some of the prices that we might see.”
Rankin said one of her concerns when considering food costs going into 2023 are the “constants,” including the impact of climate-related events.
“The cost of transport is another one, so the inputs that go into transporting food are more expensive because of carbon taxes, which are obviously a necessary measure to be able to kind of curb our carbon footprint,” she said.
“Those are the ones that are going to remain constant going forward into the next years.”
80% of Canadians believe there’s abuse in the system
The report also touched on “greedflation,” highlighting the Competition Bureau’s announcement in October about its launch of a study examining grocery store competition in Canada.
Ottawa also announced it would investigate food prices and the alleged abuse by large grocery store chains. Despite Canada having the third-lowest inflation rate among G7 countries, the report noted food inflation has exceeded general inflation for 13 consecutive months.
“Although there is not currently any evidence to suggest that there is abuse by grocers, almost 80% of Canadians claim there is abuse in the system,” the report stated. “Both the study and investigation will provide Canadians with more clarity on the changes in grocery store prices.”
Rankin said she sees the Ottawa study into alleged abuse by grocery store chains as a silver lining to take from the dark clouds of the past year.
“That’s something that is really helpful for consumers, to be able to understand how food prices are changing,” Rankin said.
“I think that’s one big thing that this report gives. It provides an insight into why things are happening instead of just being…blindsided by the way things are changing. The past few years have been abnormal, to say the least.”