Food price growth continues to accelerate despite slowing headline inflation, but experts believe food prices will begin to stabilize later this year as retail chains supply will return to pre-pandemic levels.
Food prices rose 10.4% year over year in January, according to data released Tuesday by Statistics Canada. This compares to an overall annual inflation of 5.9% for the same month.
Grocery prices jumped 11.4% from the same period last year, up slightly from December’s 11.0% rise, while food purchased from restaurants rose 8.2%, up half a percentage point from the previous month, due to increased demand for take-out and fast food.
The federal agency said meat prices, which rose 7.3%, were behind much of the growth. At the same time, prices for bakery products increased by 15.5%, those for dairy products by 12.4% and those for fresh vegetables by 14.7%.
On a monthly basis, prices for fresh or frozen chicken jumped 9% from December, recording their biggest month-over-month increase since 1986.
But with production disruptions easing, Royal Bank economist Nathan Janzen said food inflation should start to ease. The bank’s latest forecasts are for them to decline below 3% by the end of 2023, he said.
“We expect growth in these prices to plateau and […] and we are starting to see some signs of that,” he said.
“Year-over-year growth in grocery prices is still extremely high, but has been fairly flat since last fall. What we are seeing is likely still, at least in part, the impact of these earlier global supply chain disruptions, transportation disruptions, as well as the agricultural commodity price spikes early last year. , and these shocks have dissipated to some extent. »
Janzen said Canadians shouldn’t expect to pay less for groceries in the near future.
“It’s easier for prices to go up than to go down,” he said. We do not expect prices to fall, but rather to rise at a slower rate. »
