Business

Food keeps getting more expensive even as overall inflation slows

Published

2 years ago

October 19, 2022

Canada’s official inflation rate slowed for the third month in a row in September, even as many goods and services continued to get more expensive.

Statistics Canada reported Wednesday that the consumer price index declined to 6.9 per cent in September, down from seven per cent in August.

The rate seems to have peaked at a 40-year high of 8.1 per cent in June.

Economists had been expecting an even bigger drop off, to about 6.7 per cent, but food prices pulled the headline number up.

Food purchased at stores increased at a pace of 11.4 per cent. That’s the fastest pace of increase in grocery bills since August 1981.

Some of the price increases in the grocery aisle in the past year are eye-popping:

Cereals are up 17.9 per cent.
Baked goods are up 14.8 per cent.
Fresh fruit is up by 12.9 per cent.
Fresh vegetables are up by 11.8 per cent.
Dairy products are up by 9.7 per cent.
Meat prices are up by 7.6 per cent.

The number means food inflation is almost twice as much as the overall inflation rate. Food inflation has now been higher than the overall rate for 10 months in a row.

Food prices may keep climbing

Worse still, there’s reason to fear that food prices may keep going higher for seasonal and currency reasons.

“We have a weak Canadian dollar right now and we import a lot of what we consume,” economist Derek Holt with Scotiabank said in an interview.

Drought conditions in food-producing parts of Europe and the United States will also push up prices for Canadian shoppers.

“We’re headed in the right direction, I think, as supply chains adjust — but it’s still going to require some patience,” Holt said.

Independent grocer Sue Ghebari says her wholesale costs have increased by more than her prices have this year. (CBC)

While major grocery chains have enough control over their supply chains to put pressure on suppliers to keep prices low, that isn’t the case for independent grocers like Sue Ghebari, co-owner of MRT Family Foods in Calgary.

She says her costs on the wholesale side are up by between 25 to 30 per cent, an increase she can’t pass on to customers because she’ll lose them.

“We’ve tried not to increase prices too much because increasing prices doesn’t necessarily mean you’re going to sell the item,” she said. “If it’s too expensive it’s not going to get bought.”

Shoppers blame big grocery chains

In Toronto, shopper John Romanelli says the cost of food is “atrocious” right now and he places the blame squarely at the feet of the big grocery chains.

“They’ve never made more money than they are today,” he told CBC News in an interview Tuesday. “We just went through two years of COVID and they’re making millions off us. … All they’re doing is pocketing everyone’s hardship.”

Increases in the price of food are out of control, and on the streets of Toronto on Tuesday, Canadians told CBC News about what they are doing to deal with them.

Gasoline prices, which were a major contributor to inflation earlier in the year, have now fallen for three months in a row. They’re still, on average, 13 per cent higher than they were a year ago, but they fell by more than seven per cent during the month of September.

The lone exception to the pump price trend was B.C., where unexpected oil refinery shutdowns led to the price of gasoline spiking all over the province. Pump prices were up by 27 per cent during the month.

Gas prices have risen this month across the country, something that may lead to an unpleasant surprise in next month’s inflation data. “Given that those prices have since reversed, the next month could see headline inflation temporarily heading in the wrong direction,” said CIBC economist Karyne Charbonneau.

Food and energy prices are always volatile, which is why the data agency strips those out of some of its numbers to calculate to get a better sense of the underlying price pressures in the overall economy.

The data agency tabulates three measures — CPI-median, CPI-trim and CPI-common — that taken together are known as “core inflation.”

The core rate was unchanged at 5.3 per cent during the month, a disturbing sign that inflation is starting to become entrenched even as the Bank of Canada has been hiking rates aggressively to rein it in.

Charbonneau says the biggest thing the central bank will take away from the latest inflation numbers is the need for higher rates to further cool demand.

“The Bank of Canada has clearly not slayed the inflation dragon yet and is therefore set for another large rate hike next week.”

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Business

Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

Published

3 days ago

September 13, 2024

Anne Joseph

TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Business

Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

Published

4 days ago

September 12, 2024

Anne Joseph

VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

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Business

Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

Published

4 days ago

September 12, 2024

Anne Joseph

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.

Companies in this story: (TSX:TRZ)

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