Retail data highlight concerns in food spending

The latest food sales statistics indicate Canadians are getting poorer at an alarming rate.

Canada appears to be a “trading down” market, a trend that may persist for some time. Recent data from Statistics Canada on the food retail and service industries, as well as fresh GDP figures, paint a concerning picture, especially for those looking to attract more food companies or grocers to our country.

Our population grew by more than three per cent last year, yet our GDP increased by less than one per cent. While other industrialized economies are experiencing worse economic headwinds, Canada's economy is highly integrated with the world's most robust economy.

Despite our proximity to this economic superpower, however, the benefits of our geography seem to have stalled. The most alarming aspect of the January GDP numbers is Canada's hottest economic sector is the public service, while private investments have stalled.

The gap in GDP per capita between Canada and the United States has widened by 106 per cent since 2015, and this trend shows no signs of reversing.

In other words, despite our growing population, Canada is becoming poorer, not richer.

Statistics Canada's reports on food and service sales confirm that consumers are dealing with less wealth while facing higher food and menu prices.

As of January, the average Canadian is spending $248 a month on food retail sales per capita, down from $258 in January 2023 and $282 in February 2017. These figures are all in real dollars, which makes the situation even worse. Based on Canada's Food Price Report 2024, an individual's monthly expenditure for a healthy diet should be $339.

Canadians are either wasting less or finding alternative ways to source food, such as dollar stores and non-traditional grocery discounters.

One might think that grocers are struggling with this situation, but they are readjusting their strategies and putting more pressure on suppliers with higher fees and lower prices. These are perfect conditions for a potential price war this year.

The data on food service offers a different perspective. On average, Canadians spent $169 at restaurants in January, which is about the same as last year and an increase from $149 in January 2018. These sums are in real dollars. The current retail/service split in Canada is about 41 per cent of all money spent on food is at restaurants, compared to a split closer to 54 per cent in the U.S., favouring food service.

Considering the frugality of the market, it's astonishing to see so much money being spent at restaurants.

Food inflation is causing Canadians to spend less at grocery stores, which may seem counterintuitive, but that's what the data are telling us. Currently, about 18 per cent of all retail dollars are devoted to food, compared to 21 per cent in 2017.

Simply put, the cost of living is a problem for many Canadian households, and trading down is much easier with food.

Statistics Canada figures merely represent an indicator, and Canadians have no other way to know what is really going on out there. Regardless of how we interpret the data, the numbers are simply not encouraging.