The cost of food is expected to go up in 2024, but you may see some items become cheaper.
The 2024 Food Price Report released by Canadian researchers suggests that while food prices won’t drop right away, there could be some savings as inflation slows down.
The report predicts a 2.5% to 4.5% increase in food prices, which is less than the 5% to 7% predicted last year. This means an average Canadian family of four might spend about $700 more on groceries in a year. The prices of bakery items, meat, and vegetables are expected to rise the most, while dairy and fruit are expected to see smaller price increases.
This review happens while people from large grocery chains in Canada are talking with the House of Commons agriculture committee. They’re sharing their ideas on how to make sure the prices of food stay steady.
Canadian families adapt to rising food costs
The monthly grocery bill shrunk in 2023 despite the rising cost of living. Canadians spent less because they bought less food or food of lower quality, or they substituted for cheaper options.
According to retail food sales data, monthly spending on groceries has gone down, dropping from $261.24 in August 2022 to $252.89 in August 2023. The rise in prices is attributed to factors such as adverse climate events affecting harvests, including wildfires and flooding.
The report acknowledges the impact of food inflation on family spending, with a recognition that families are spending less due to changes in shopping habits despite higher food prices. As household debt is historically high, Canadians are expected to continue feeling the strain of food inflation this year, compounded by rising costs in housing, energy, and other expenditures.
The report also highlights concerns about corporate behaviour, with allegations of profiteering by major grocery chains. A significant portion of Canadians believes that price gouging is a primary reason for escalating food prices.
Some companies use a sneaky tactic called shrinkflation to make more money. They do this by making a product smaller but still charging the same price. They may do this when their production costs go up, and they want to keep their profits high without you noticing.
What Affects Canada’s Food Prices?
Various factors influence the cost of food in Canada. The connection with the global market is a significant driver, with fluctuations in international commodity prices, weather patterns, and even political events influencing the cost of imported goods. In recent years, problems in the global supply chain, like higher transportation costs and not enough supplies, have made food prices in Canada go higher.
After the 2020 pandemic there have been challenges in the supply chain. Not having enough workers and problems with transportation, make it more expensive for the people who make and deliver food. These higher costs often get passed on to us, the consumers, making food prices go up.
Climate change also affects agriculture in Canada. Extreme weather events can hurt how much food is produced. Even though there are new farming methods and technology to help, they can be expensive at first and make food prices go higher.
The government also plays a part in how much food costs. They might give money to help keep prices steady for essential foods to make them more affordable. When we want to buy organic or local products or want more plant-based options, this may also affect what’s available in the market and how much it costs.
Strategies to Deal With High Food Costs
As everything gets more expensive, including food, families in Canada might find it harder to afford. This is especially tough for families with less money, where a bigger part of their income goes to buying food.
With all these things in mind, here are some simple ways to help you manage your grocery budget in 2024:
- Budget and Plan Meals: Making a comprehensive budget and planning meals ahead can help you make informed choices about your food expenditures. By creating weekly or monthly meal plans, you can streamline your grocery shopping, reduce food waste, and make cost-conscious decisions.
- Buy Local and Seasonal: Supporting local farmers and choosing seasonal produce can be a cost-effective and sustainable approach to grocery shopping. In addition to potentially lower prices, local and seasonal items often boast freshness and nutritional benefits.
- Try Alternative Protein Sources: With the rising cost of traditional protein sources such as meat, you may want to explore alternative protein options, including plant-based proteins and grains. Diversifying protein sources not only provides economic benefits but also aligns with sustainable and health-conscious choices.
- Use Loyalty Programs and Discounts: Many grocery stores offer loyalty programs and discounts that can significantly impact the final food bill at the checkout. Taking advantage of these programs, along with keeping an eye on promotions and coupons, can help stretch the grocery budget further. A great way to save is also to buy in bulk.
- Take Advantage of Price Match Guarantees: Retailers offering price matching will adjust the cost of a product to align with a lower advertised price found at a competitor. Simply present a digital or printed copy of the competing offer to the store associate, and they will sell you the item at the lower price. In certain cases, they may even go beyond matching and offer a price lower than that of the competitor.
- Leverage Community Initiatives and Food Assistance Programs: For Canadians facing financial constraints, community initiatives and food assistance programs can provide valuable support. Local food banks, community gardens, and programs aimed at reducing food insecurity can be resources for those in need.
- Educate Yourself on Food Labels: You can make informed choices by understanding food labels, including information on packaging, nutritional content, and pricing per unit. This knowledge can contribute to cost-effective and health-conscious shopping decisions.
- Advocate for Affordability: Engaging in conversations about the cost of food and advocating for policies that address affordability concerns is crucial. By participating in community discussions, consumers can contribute to a broader dialogue about creating a more inclusive and affordable food system.
Making Changes to Live Better
If you discover that your entire income is allocated to living expenses and you are relying on credit to get you by, it may be time to seek help.
Allan Marshall & Associates offer free, no-obligation consultations. Whether you need assistance with budgeting or debt relief, we’re here to help. Contact us today at (888) 371-8900.
