Grocery prices start to rise as cost increases take hold

The price of beef and other groceries has begun to climb as coronavirus costs bite into stores’ bottom lines, says the vice-president of the Canadian Federation of Independent Grocers.

Gary Sands told Postmedia News that his B.C. members had told him “beef has increased in price and produce is starting to increase.”

On April 1, Sands sent a letter to B.C. Premier John Horgan outlining the challenges his members are having in maintaining access to a full range of groceries at fair prices.

The first problem is the low Canadian dollar (linked to low oil prices) that makes it more expensive to buy goods from the U.S. and elsewhere.

“Already the deep depreciation in the Canadian dollar is having an impact on buying power,” Sands wrote, adding that some truckers are refusing to cross interstate and international borders.

“Compounding the situation, panic buying on the part of consumers has in many cases wiped clean grocery-store shelves for a number of products.

The resulting increase in demand by retailers taxes the ability of the current supply chain and distribution system to catch up.

That in turn further increases costs throughout the supply chain.”

Sands wrote that grocers are also being hit with COVID-19 related costs like installing Plexiglas barriers, rigorous and stringent in-store cleaning, enhanced safety protocols, increased wages and supplying hand sanitizer.

“Operating in a sector with margins much lower than other sectors (1.5 per cent) and so dependent on cost issues that impact other parts of the supply chain, there is no way any front-line grocer can avoid passing on increases in costs.”

Sands said Horgan hasn’t replied to his letter.

According to special food prices released by Halifax’s Dalhousie University and the University of Guelph in Ontario, there will be price increases in 2020 for all types of food due to the coronavirus.