Grocery prices unlikely to fall anytime soon, experts say
Despite the declining headline inflation fee, the meals inflation fee in Canada has remained excessive, and specialists say it could be some time earlier than grocery costs head within the different course.
“I’m afraid I can’t be the bearer of good news,” Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers, advised CTV News Channel on Tuesday. “I don’t see any relief in the short-term coming.”
Numbers from Statistics Canada’s newest inflation report, revealed Tuesday, confirmed that in January, meals costs noticed a year-over-year improve of 11.4 per cent, up from 11 per cent the earlier month. Since final August, the meals inflation fee has been above 10 per cent.
In a analysis notice revealed on Friday, RBC economist Claire Fan mentioned international financial situations counsel that the meals inflation fee might decelerate this 12 months.
“Growth in grocery prices ticked slightly higher again in January, to 11.4 per cent year-over-year. That is still an exceptionally high rate of price growth, but lower agricultural commodity prices and easing global supply chain pressures are expected to slow food price growth this year,” Fan wrote.
But even when the meals inflation slows, David Macdonald, senior economist with the Canadian Centre for Policy Alternatives, says that does not imply meals costs are coming down.
“This is one of the things, I think, that’s misunderstood about inflation. These prices aren’t going away. They might just slow a bit,” he mentioned in an interview with CTV News Channel Tuesday.
D.T. Cochrane, economist with Canadians for Tax Fairness, calls the meals inflation “the most disconcerting category, because it’s the one we face week after week.”
“A lot of our housing costs were locked into, but food, we see it all the time, and I think it will continue to rise for a couple more months,” he advised CTV News Channel on Tuesday.
Climate-related occasions over the previous few months, similar to flooding in B.C and droughts in California, have had a big affect limiting imports and manufacturing, Sands defined, along with the continuing warfare in Ukraine.
“We’ve also experienced significant increases in fuel surcharges and transportation and, you know, input costs throughout the supply chain continue to be passed on to the retailer,” he mentioned.
The unfold of avian flu in North America has additionally wreaked havoc on the poultry trade, which has needed to cull tens of millions of chickens. Chicken costs rose 9 per cent from December to January, quicker than virtually each different grocery merchandise.
“There’s just a myriad of factors that are impacting the grocery supply chain,” Sands mentioned.
Sands acknowledges many of those components which have led to excessive meals inflation are out of the federal authorities’s management, however says the federal government might assist ease the associated fee burden on the subject of gasoline prices and different transportation points.
“Those are the subjects of a lot of fun discussions right now with the government and industry,” he mentioned.
Cochrane additionally desires to see the federal authorities apply extra scrutiny into the revenue margins of main grocery shops. The CEOs of the three main grocery chains — Loblaw, Metro and Empire — are set to testify earlier than a House of Commons committee as they face accusations of profiting off of inflation.
“The government needs to figure out what needs to be done. And so first, they need to explain to us exactly what’s going on here. There’s no easy solution to this,” he mentioned.
