The 14th annual food price report was released on Thursday with a focus on how Canadians are spending less despite inflation, either by reducing the quantity or quality of food, or by substituting less expensive alternatives.
In all, Canada’s 2024 Food Price Report predicts an increase of 2.5 to 4.5 per cent in overall food costs in the new year, with a rise across the board.
Sylvain Charlebois, professor and director of the Agri-Food Analytics Lab at Dalhousie University, says that in 2023, all sections of the grocery sector were impacted by inflation. Charlebois says they expect a “soft landing,” with inflation expected to cool for the new year.
“We’re expecting some price wars. Things are tightening up right now for grocers and suppliers,” Charlebois told CityNews. “We’re expecting an inflation rate of 2.5 per cent to 4.5 per cent … but we wouldn’t be surprised if it falls below that threshold.”
Charlebois says that while Canadians vilify inflation in general, it’s something this sector needs.
“We need [inflation] for investments, you need it to increase competition, and you need it to get companies to innovate and make sure that our food is safe,” he said.
“The challenge we have had over the last couple of years is that the rate has been much too high for far too long. We wouldn’t be surprised that in 2024, we go back to that proverbial sweet spot.”
2024 Canadian food prices table
Bakery: 5% to 7%
Dairy: 1% to 3%
Fruit: 1% to 3%
Meat: 5% to 7%
Other: 2% to 4%
Restaurants: 3% to 5%
Seafood: 3% to 5%
Vegetables: 5% to 7%
Provincial breakdown of food prices
According to the report, retail food sales data indicates a decline from a monthly expenditure of $261.24 per capita in August 2022 to a monthly expenditure of $252.89 per capita in August 2023.
The rise in prices can be attributed to various factors, including climate events that have had adverse effects on harvests, such as wildfires and flooding throughout the country.
Coffee, flour, vegetables and meat: Food items that will cost more or less
Charlebois said consumers should feel better about the costs of certain food products. He mentions coffee, flour, wheat and dry pasta as some to look out for in terms of lower prices.
“Even dairy. We got some good news in the fall from the commission. Farm prices will go up by 1.7 per cent to 2 per cent, which is quite reasonable, to be honest. We’re not expecting major jumps in the dairy section at all.”
Charlebois says the meat section will be problematic in terms of high costs, as well as the costs of vegetables and the bakery sector.
According to Statistics Canada’s food retail data, Canadian consumers are spending less. Photo: Unsplash.
“The vegetable play is about the dollar. It’s been a story for about two or three years now. Because of the interest rate and a potential recession, we may see the dollar weaken … That is going to impact the purchasing power of importers,” Charlebois said.
“In the meat section, beef is going to increase because of droughts in the U.S. and Canada. Poultry is going to increase because of the Avian Flu. Pork got cheap this year, so we have fewer farmers farming hogs. There is less supply … eventually, we are expecting more prices to increase over the next little while.”
As for whether Charlebois thinks this is good news for Canadians, he mentioned that the latest report indicates that it won’t be as alarming in 2024 as in years past.
“If you’re looking at prices to drop, you won’t celebrate. What this report is telling Canadians is that things are not as dire as in 2023 or even in 2022,” Charlebois said.
“I think that the worst is behind us, which is good news … I don’t know if consumers want deflation or if they understand what it means. It would mean companies would divest, and prices would skyrocket again. You don’t want prices to drop in the food industry, but you want deals … that didn’t happen in the last couple of years.”
Managing food costs vs. the costs of living
Another indication of how the cost of living is impacting how residents spend on food, the report shows Canadians are facing additional pressures, including higher costs for rent and utilities and rising personal debt.
“Based on the 2023 predictions, the total annual expenditure for a family with the following demographic composition: man (aged 31-50), woman (aged 31-50), boy (aged 14-18), and girl (aged 9-13), was originally projected to be $16,288.40, based on what we considered to be a healthy diet,” the report states.
Food inflation is the gradual rise in the cost of all food products, whereas food price increase refers to the higher pricing of a product at the retail level. Photo: Unsplash.
“This year, in recognition of the reduced spending habits of Canadians, a more accurate estimate for the annual spending of a family of four in the past year is $15,595.40.4. In other words, they spent $693 less due to changes in shopping habits, despite higher food prices.”
Experts say Canadians will continue to experience the strain of food inflation in 2024, compounded by increasing costs of housing, energy, and various other expenditures.
Further, Canada’s 2024 Food Price Report indicates that the new year may witness a “mild deflationary trend,” resulting in lower prices for numerous essential food items.
Corporate behaviour and the profits of major grocers
Canadians are trading down and going to discount stores, but also eating more at home to try and save money, which benefits the grocers.
Major Canadian grocers, such as Loblaw, have been under pressure to stabilize Canadian food prices. The federal government has called on them to provide detailed plans to address rising food costs through discounts, promotions and other measures.
The 2024 report mentions the prevalent issue of food affordability and how it has remained a top concern as prices
continued to rise throughout the year.
“There were widespread concerns about corporate behaviour, with allegations of profiteering by Canada’s major grocery chains frequently reported in the media and the subject of government attention,” the report states.
“A significant 30.3 per cent of Canadians believed that price gouging was the primary reason for the escalating food prices.”
Canada’s Food Price Report of 2024 is an annual publication collaboratively produced by Dalhousie University, the University of Guelph, the University of British Columbia, and the University of Saskatchewan.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
