The average Canadian family will pay up to an extra $695 for food next year, as the pandemic, wildfires and changing consumer habits drive up grocery bills to the highest increase ever predicted by an annual food price report.
Rising bread, meat and vegetable prices are expected to lead the overall food price increase of three to five per cent, according to Canada’s Food Price Report 2021 released Tuesday.
For an average family of four, that means a $13,907 grocery bill.
“We don’t expect a break at the grocery store any time soon,” said Sylvain Charlebois, lead author and Dalhousie University professor of food distribution and policy.
“This is the highest increase that we’ve ever expected.”
Biggest meat price hike expected for poultry
The 11th edition of the food price report, published annually by Dalhousie University and the University of Guelph, has expanded this year to include the University of Saskatchewan and the University of British Columbia, making it more national in scope.
Researchers said in the study that COVID-19 will continue impacting food prices next year, with the meat industry particularly vulnerable to potential labour shortages, logistics disruptions, food-plant and distribution-centre slowdowns, and shifts in consumer demand.
While meat prices could increase as much as 6.5 per cent overall, the biggest price hike could be for poultry, a supply managed industry in Canada.
Poultry prices are up seven per cent since July, Charlebois said, noting that as production costs continue to rise, so will retail prices.
“We are expecting poultry prices to be a bit of an issue,” he said. “If farmers are asked to spend more on equipment and COVID-19 cleaning protocols, consumers will eventually have to pay more.”
Meanwhile, climate change — including heat waves, ice loss, wildfires, floods and droughts — will also influence how much we pay for groceries next year.
Vegetables could be particularly hard hit, with prices expected to jump as much as 6.5 per cent, according to the report.
Much of the produce Canadians consume comes from California, a state that has been ravaged by one of the worst wildfire seasons on record.
With California’s crops heavily compromised by smoke and ongoing challenges with COVID-19, Stuart Smyth with the University of Saskatchewan said prices will be pushed up.
“Vegetables are where people are going to notice the greatest impact,” said Smyth, associate professor in the Department of Agricultural and Resource Economics.
While the price of root crops like potatoes and carrots should remain stable, he said leafy greens and more perishable produce like tomatoes and cucumbers will be more expensive.
Yet some of the biggest price increases could be for vegetables like cabbage, cauliflower and asparagus, said Smyth, the chair of Agri-Food Innovation and Sustainability Enhancement.
Baked goods to jump as much as 5.5%
Meanwhile, the study warned consumers to expect bakery prices to increase as much as 5.5 per cent.
The cost of a bushel of wheat hit about $6 in November, Smyth said, up from about $4 roughly 18 months ago — a 50 per cent increase.
The price of baked goods is expected to go up by 5.5 per cent next year because the price of wheat has risen by almost half this year. (Gian Paolo Mendoza/CBC)
The issue is about supply and demand, he said, noting that while “wheat acres,” or the amount produced, has remained relatively stable in Canada, demand has steadily risen.
“If we hold supply constant but the demand goes up, essentially we’re falling a little bit behind,” Smyth said.
Meanwhile, the latest report has broken down average food costs for individuals based on age and gender, allowing consumers to estimate their potential food expenditures based on their own situation.
While it continues to provide the estimated cost of feeding a family of four, the report also shows that a man aged 31 to 50 can expect to pay $169 more for food next year, while a woman of the same age can expect to pay $152 more.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
