Here’s how much more Canadians will likely spend on groceries in 2019
The average Canadian family is going to spend $411 more next year to fill the grocery cart, according to a report released on Tuesday by Dalhousie University and the University of Guelph.
Overall, food prices are projected to rise between 1.5 per cent and 3.5 per cent, the study indicated.
Leading the increase will be vegetables, with prices likely to climb between four per cent and six per cent. The return of El Niño next year will likely bring heavier rainfall to South America and certain parts of Asia, but North America’s crops might suffer from drier weather, the report said.
“In Canada we’re reliant on the U.S. and Mexico for a lot of the vegetables that we need,” said report co-author Simon Somogyi, who holds the Arrell chair in the business of food at the University of Guelph. “Much of those vegetables come from California. We’re expecting to move from a La Niña to an El Niño weather pattern, which means drier conditions, particularly in California.”
He also thinks that increased demand for vegetables might contribute to higher prices.
WATCH: Study finds Canadians will likely spend more on groceries in 2019
But if Canadians will likely have to spend more on the likes of tomatoes and leafy greens next year, they will probably save at the butcher’s.
For the first time in its nine-year history, the report is predicting that both meat and seafood will be cheaper.
Somogyi said that the predicted decrease in seafood costs is due to a stabilization of the global market. Meat is a different story.
“In the market, supply and demand seems to be levelling out.”
“I think part of that has to do with changing consumer diets. We’re seeing a decrease in the consumption of meat.”
A survey of 1,027 Canadians published by Dalhousie in November found that 13.2 per cent of respondents reported some kind of meat-related food restriction, while roughly a third were considering reducing their meat consumption within six months.
“We are seeing a rise in vegetarian-based diets, particularly spearheaded by young female consumers who are very much focusing on vegetarian-based diets,” Somogyi said.
The shift seems to affect beef most of all. Canadians collectively consume 94 million kilograms less of it per year than they did in 2010, according to the study.
“In 2018, many local butchers closed their doors due to lack of demand, and this trend is expected to continue in 2019,” it reads.
But Canadians’ pullback from meat may also, at least in part, reflect an effort to trim the grocery bill. Meat prices soared in 2014 and have since held at record prices, the report shows. Somogyi doesn’t think that a small decrease in meat prices will affect demand much, though. While price is a factor, “It’s the animal welfare issue, it’s the environment issue, but I think the main one is, it’s the healthy diet issue.”
But Canadians will have few avenues to cut down their grocery costs next year. Dairy prices, for example, are projected to climb by between one and three per cent. This, despite the U.S.-Mexico-Canada trade agreement (USMCA), which will open doors to American dairy, egg and poultry exports worth about 3.6 per cent of the total current Canadian market.
And this year’s bread price-fixing scandal doesn’t seem to have put the brakes on bakery product prices.
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Earlier this year, grocery chain Loblaw revealed it had been part of a 14-year scheme to inflate the price of packaged bread. But while bread prices declined 1.8 per cent this year, this isn’t expected to continue in 2019, the report said.
When it comes to eating out or ordering in, Canadians are anticipated to spend $143 more next year. That’s a relatively small increase after a period that has seen growing demand for both restaurant food and ready-made meals from the grocery aisle. Still, noted Somogyi, it’s still going up. “People like the convenience,” he said. “And they’re willing to pay the price for that.”
Across the country, British Columbia, Alberta, Ontario and Saskatchewan are expected to see overall food prices increase on average. The Atlantic provinces, on the other hand, are all in for price declines, according to the report, which Somogyi attributes to prices stabilizing after big weather events two years ago disrupted food delivery and led to higher prices. In Manitoba and Quebec, prices are forecast to remain stable.
Last year, the study projected food prices to rise by between one and three per cent between October 2017 and September 2018. The actual increase was 1.8 per cent according to Statistics Canada.
Fruit was the only category where the forecast proved inaccurate. While prices were expected to climb by between one and three per cent, they remained stable.
In general, actual prices increases were at the low-end of the predicted range, with the exception of seafood and meat.
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