Grocery wars: How inflation is impacting options at the grocery store

By Melissa Nakhavoly

If you’re looking for a bag of Lays chips, chances are you won’t find them at Loblaws grocery stores.

This is the latest example of how inflation is impacting the food industry, and now the Retail Council of Canada (RCC) says it has received an unprecedented number of calls from grocery retailers noting what they’re describing as a flood of price increases.

In an email statement to CityNews, it said, “RCC has received an unprecedented number of calls from small, mid and large grocery retailers across the country noting a flood of price increases in January from vendors, many of whom are large global companies.”

“This follows an already alarming number of increases in the preceding quarter (2021). In many cases the increases are unprecedented and far exceed typical food inflation levels. Grocers continue to do everything in their power to ensure that Canadians have access to food, choice and competitive pricing,” the statement read.

The friction between Frito-Lay and Loblaws is one example of how vendors are trying to recoup higher costs by charging retailers more to carry their items. However, experts suggest this could be a sign of tension in Canada’s food industry, which some say could get much worse as supply chain issues continue.

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

“I wouldn’t be surprised to see other companies do the same thing affecting other parts of the grocery store. And perhaps healthier parts of the grocery store, like dairy for example, and a stop sell in dairy would be disastrous because you could see dairy farmers actually dump milk all over the place as a result,” said Sylvain Charlebois, Director of Agri-food Analytics Lab at Dalhousie University.

According to a Statistics Canada report released last week, the price of food at grocery stores went up by 6.5 per cent in January 2022 — which is an increase the country hasn’t seen since 2009.

If consumers see more price showdowns, such as with Frito-Lay and Loblaws, the question remains, who should be absorbing the costs?

“Honestly there’s a new normal out there. I think it’s important for people to realize that it’s been difficult,” said Charlebois, “Prices are actually rising and they won’t drop anytime soon. We’ve been spoiled as consumers for really the last several decades. But things are shifting rapidly right now. And I do believe Canadian families will be expected to pay more for food moving forward unfortunately.”

Charlebois said what could help level out pricing before it gets worse is the implementation of a code of practice by the federal government that could then offer an arbitrator to settle these types of disputes.

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