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Food prices set to rise another 5-7% in 2023 after record inflation year: report

Click to play video: '‘2023 won’t be much of a break’: Food prices expected to keep soaring in 2023'
‘2023 won’t be much of a break’: Food prices expected to keep soaring in 2023
WATCH: The cost of food is set to soar by up to seven per cent in 2023, according to the 13th edition of Canada's Food Price Report, following a year where inflation levels hit highs not seen in four decades. Ross Lord looks at how much more groceries could cost a family of four, and when food inflation could finally cool – Dec 5, 2022

After a year that saw food prices climb by numbers not seen in decades due to record inflation, the cost of groceries in Canada is expected to continue rising in 2023, a new report suggests.

The latest Canada Food Price Report released Monday estimates food prices will increase by another five to seven per cent on average next year, adding hundreds of dollars to the average family’s annual expenses.

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“Living is expensive, and we are not bringing good news,” Samantha Taylor, a senior instructor of accountancy at Dalhousie University and one of the researchers behind the report, acknowledged in an interview with Global News.

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Click to play video: 'Food prices set to rise another 5-7% in 2023 after record inflation year: report'
Food prices set to rise another 5-7% in 2023 after record inflation year: report

The report predicts price hikes will be seen across all food groups, but expects vegetables to see the biggest cost increase of six to eight per cent. The cost of eating out at restaurants is set to go up four to six per cent, along with the price of seafood.

Fruit prices are expected to see the smallest bump of up to five per cent, while every other category — meat, bakery products and dairy — will go up between five and seven per cent.

Researchers say a typical family of four will be forced to shell out an average of $16,288 on food over the course of 2023 — an increase of $1,065 from this year. A two-adult household will spend $7,711, a bump of more than $500 from 2022.

Those increases will come as food inflation remains above 10 per cent, according to the most recent Statistics Canada figures released last month. October saw food prices rise by 10.1 per cent, down slightly from the 10.3 per cent hike in September.

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Inflation rates hold steady in October as economists expect another rate hike

The rate of food inflation exceeded researchers’ predictions in the last Food Price Report, which anticipated a five to seven per cent bump for 2022 — a number Taylor noted was seen as “relatively high” and “aggressive.”

That was before COVID-19 pandemic-fuelled supply chain issues drove inflation to a 40-year high, while Russia’s invasion of Ukraine further squeezed global food supplies. A weaker Canadian dollar also hurt grocers’ buying power, Taylor added.

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Those issues are expected to remain through at least part of 2023, though the report also predicts a light may soon appear at the end of the tunnel.

“We are hoping that we will see a peak and, hopefully, a tapering off of food inflation toward the end of 2023,” Taylor said.

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“A strengthening Canadian dollar will have more purchasing power so that when we’re buying items from outside Canada, our dollar will go further and therefore have (fewer) cost increases to consumers in the grocery store.”

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The annual report is led by teams from Dalhousie University, the University of British Columbia, the University of Guelph and the University of Saskatchewan that use price data from the past 100 years to help create prediction models. Global events and other potential impacts are also factored in to form a detailed outlook for the months to come.

With food inflation already forcing Canadians to change their buying habits and consider alternative diets to save money, Taylor says researchers are hoping the new report gives shoppers the information they need to plan accordingly for further price hikes.

“Information is power,” she said.

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She said buying in bulk, freezing soon-to-expire vegetables and other perishables for later use, and group meals can further help people cut down on ever-rising costs.

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“Hopefully there is a way for people to take a look at the economic reality and work through ways that actually excite them to get together and share those meals and save their pocketbooks as well,” she added.

— with files from Anne Gaviola

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