Grocery prices expected to remain high for first half of 2023

Inflation has hit pretty much every sector this year, but it’s been most notable at the grocery store where prices have shot right up.

But are things going to get better in 2023? Canadian researcher of food distribution policy, Sylvain Charlebois, tells CityNews the first half of 2023 will be challenging

“We’re not out of the woods yet. Unfortunately, we are expecting the food inflation rate to remain higher than the general inflation rate for the first half, but things will calm down and things will get better,” said Charlebois.

Prices for food purchased from stores rose 11.4 per cent in November compared with a year ago, up from an 11 per cent gain in October, according to Statistics Canada numbers released earlier this month

Grocery prices have now risen at a faster pace than overall inflation for 12 months in a row as the country’s annual inflation rate edged down slightly in November to 6.8 per cent.

He said the average family of four’s food bill could increase by as much as $1,000, or around five to seven per cent.

“The three categories we’re following very closely for next year are meat products, beef in particular, dairy as well, [and] we are expecting a hike in fruit and vegetables,” explained Charlebois.

This is caused by a weaker currancy, said Charlebois. “As a result of higher interest rates in the US and we are expecting the Bank of Canada to not increase as much and so that may actually have an impact on our importers buying power.

“Supply chains aren’t going to be as much of an issue but energy could actually be an issue. Although we are going to go through an economic slowdown,” added Charlebois.

He said however, things in the frozen aisle are expected to be stable. “They weren’t this year. There was no safe place at the grocery store this year at all. But we are expecting the center of the store and the frozen aisle to be a little bit more friendly towards consumers.”

“We are expecting some breaks in some parts of the store. We are expecting consumers to remain frugal. They will continue to look for deals. They will continue to look for private labels as well,” said Charlebois.

“Consumers have been quite aggressive and we’re seeing more traffic towards discount stores in Ontario and elsewhere.”