Food prices continue to climb despite overall inflation easing
February 25, 2023 | By Sammy Hudes
TORONTO – The cost of food continues to climb despite overall inflation easing, but experts predict grocery prices will begin to stabilize later this year as supply chains return to pre-pandemic levels.
Food prices grew by 10.4 per cent year-over-year in January, according to data released Tuesday by Statistics Canada. That compares with an overall annual inflation rate of 5.9 per cent for the month.
Grocery costs saw an 11.4 per cent jump from the same time last year, up slightly from December’s 11 per cent rise, while food purchased from restaurants rose 8.2 per cent _ up half a percentage point from the month prior driven by higher demand for takeout and fast food.
The federal agency said the price of meat, which saw a 7.3 per cent bump, drove much of the uptick. Meanwhile, the cost of bakery products was up 15.5 per cent, dairy products 12.4 per cent and fresh vegetables 14.7 per cent.
On a monthly basis, fresh or frozen chicken prices jumped nine per cent from December, marking the largest month-over-month increase since 1986.
But with production disruptions easing, Royal Bank of Canada economist Nathan Janzen said food inflation should start to slow. He said the bank’s latest forecast shows it dipping below three per cent by the end of 2023.
“We are expecting growth in those prices to plateau and … and we are starting to see some signs of that,” he said.
“Year-over-year price growth in grocery prices is still extremely high, but it’s been kind of flattish since last fall. What we’re seeing is probably still, at least in part, the impact of those earlier global supply chain disruptions, transportation disruptions, as well as spikes in agricultural commodity prices earlier last year and those shocks have unwound to an extent.”
Janzen cautioned that Canadians shouldn’t expect to pay less for their groceries in the near future.
“It’s easier for prices to go up than down,” he said. “We’re not expecting prices to decline, just to just to grow at a slower rate.”