Grocery inflation to fall this spring, report says
Grocery inflation will fall below two per cent by the spring and stay roughly between one and two per cent for the rest of 2024, predicts a new report on the food and beverage industry.
Farm Credit Canada, an agricultural lending firm, said it expects food price increases beyond 2024 to stabilize around pre-pandemic levels as the pressures driving prices higher are easing.
The outlook for food and beverage manufacturers this year is more positive than last year, FCC said, though some sectors still face headwinds amid elevated interest rates and tighter household budgets.
“However, population growth and stabilizing — in some cases, falling — input costs are providing optimism for margin improvement for 2024.”
The organization’s annual food and beverage report offers up forecasts for consumer spending, as well as specific food items such as sugar and flour.
Canada’s annual inflation rate was 2.8 per cent in February, and grocery prices were one of the main factors pushing it lower. Grocery inflation was 2.4 per cent that month, down from 3.4 per cent in January as the cost of many items declined year over year. Slowing inflation doesn’t mean prices overall are dropping. Statistics Canada noted in its latest release that between February 2021 and February 2024, grocery prices rose 21.6 per cent.
As they grapple with higher prices, not just on food but on shelter and other daily costs, Canadians have been cutting spending on food and beverages, FCC said. They have been buying more items on sale, gravitating toward less expensive brands, buying more canned and frozen foods, shopping more at discount retailers and simply buying less food.