Grocery Prices in Canada Expected to Outpace Inflation
Rising grocery prices in Canada are expected to continue outpacing overall inflation in the near term, according to a report from RBC Economics. The largest recent spike occurred between 2021 and 2023, with food prices rising 11% year-over-year in late 2022 due to pandemic-related disruptions and the Russia-Ukraine war.
The cost of a typical grocery basket increased by 18% between the fall of 2021 and the spring of 2023. However, price growth moderated to about two percent in early 2024 as supply chains stabilized.
Higher meat prices have been a significant contributor to rising food costs, with prices increasing nine percent since the end of 2024 and more than 40% from December 2019. RBC notes that droughts and higher feed costs contributed to lower animal herd counts, constraining supply.
The report also highlights the impact of imported food costs on grocery prices, particularly for processed products, due to a weaker Canadian dollar and weather-related challenges affecting products such as coffee.