‘Prices will be going up’: The cost of grocery store supply woes

Many Canadian grocery stores are struggling to keep the shelves stocked. Richard Southern looks at how long the problem could last, and how much extra money it could cost shoppers.

By Mike Visser and Richard Southern

The perfect storm.

That’s how one industry insider is summarizing the recent trend that’s left thousands of grocery store shelves temporarily sitting empty across Canada over the past month.

“There’s a whole host of issues,” said Michelle Wasylyshen, national spokesperson for the Retail Council of Canada. “There’s supply chain challenges in general, there’s other COVID impacts, there’s certainly labour, weather and a whole host of factors.”

Out of all those issues, Wasylyshen believes that COVID-19 remains the greatest challenge in keeping shelves stocked. Grocery stores have been seeing average employee absentee rates of up to 20 per cent in recent weeks as the country grapples with the highly transmissible Omicron variant of the virus.

“Because people aren’t able to access testing in most cases, sometimes what’s happening is that employees are isolating as a precaution,” said Wasylyshen.

“Omicron was a devastating blow to the food industry,” agrees Sylvain Charlebois, Senior Director of  the Agri-Food Analytics Lab at Dalhousie University. “I’m not surprised that there are more empty shelves out there, and Canadians should not be surprised either.”

Canadians who are wondering how long the supply problems might last could receive an answer sooner rather than later, as the current wave of COVID-19 infections shows signs of peaking.

“If you look to B.C., which has seen a peak in their Omicron variant, we have heard from our retailers there that their employee absenteeism last week was much better than even the week before,” added Wasylyshen.

Both Wasylyshen and Charlebois believe the new vaccine mandates for cross-border truck drivers likely won’t have a significant impact on the amount of product reaching store shelves. Instead, it’s the cost of getting those items to market that is quickly becoming a concern.

“Freight costs have actually increased by 25 to 100 per cent, depending on who’s buying, where they’re buying, what they’re buying and where it’s going,” said Charlebois.

“We are expecting some sections of the grocery store to be affected by that, in particularly produce and all the dry goods you find in the centre of the store.”

What remains unclear is how quickly that will translate into higher prices for customers.

“Will importers drastically increase prices all of a sudden?” asks Charlebois. “Or will they incrementally increase prices over several weeks not to spook consumers? I don’t know what’s going to happen, but what is certain is that prices will be going up.”

Even though some shelves may be empty, experts are warning against panic buying or hoarding.

“Canadians should have no concern about food availability, whether there’s an empty shelf or not,” said Wasylyshen.

“Consumers may have to be flexible. When they go to the store and the exact product they’re looking for may not temporarily be available, then it’s important to look for alternatives, substitutions, maybe come back in a day or two and that shelf may be restocked.”

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