Rising food prices force us to change shopping habits
Canadian consumers are noticing food prices rising at the grocery store, as well as “shrinkflation,” and are changing how they shop in response.
A new report from Dalhousie University’s Agri-Food Analytics Lab, in partnership with research firm Caddle, surveyed more than 10,000 Canadians this fall about food prices and how they’re responding to them.
The prices of many staples such as meat and dairy have increased recently, the report notes, in part due to the pandemic but also due to challenging weather.
Consumers have noticed. Eighty-six per cent of the survey’s respondents said they believe food prices are higher than six months ago.
“Based on the results of the survey, clearly people have noticed that there is a difference in terms of prices and food affordability,” said Sylvain Charlebois, Dalhousie professor in food distribution and policy, and director of the lab.
In particular, the survey found consumers are noticing prices going up most for meat products.
According to Statistics Canada, the average retail price of beef products has gone up between March and August, though some more than others. For example, according to Statistics Canada’s data on monthly average price changes, the price of a blade roast per kilogram went up 17 per cent, while the price of a sirloin steak went up almost 10 per cent.
The average retail price of chicken, bacon and pork all rose as well.
Almost three-quarters of the respondents said they have noticed “shrinkflation,” which is when a product’s price doesn’t change significantly, but its size, volume and/or quantity goes down.
This phenomenon can mask price increases, and is therefore more difficult for consumers to track.
For example, earlier this year, Mondelez Canada Inc., which makes Oreo cookies, decreased the size of some of its cookie packages by around 10 per cent, due to a number of factors including higher commodity costs, The Canadian Press reported.
Shrinkflation is harder to measure than rising food prices, said Charlebois, though it is still a product of those prices.
It’s something that mostly affects packaged and processed foods, he said, and companies are pretty good at masking it. Often the package remains the same size even if the weight goes down. For example, a company might add a “bubble” to the bottom of an orange juice jug but otherwise keep the jug the same size, he said, adding these changes often happen over an extended period of time.
“It is subtle,” said Charlebois. “They’re trying to sell you the illusion that you’re buying the same thing, but you’re not.”
Charlebois doesn’t think shrinkflation is necessarily a bad thing; it’s just another way companies try to address rising food costs.
After all, the companies know that consumers will be more upset if the price of a box of cookies goes up than if the price remains the same but the weight of the package goes down, said Charlebois.
“I don’t think that people walk away from products just because of shrinkflation,” he said.
In response to rising food prices, half the survey’s respondents said they are buying less meat; in Alberta, almost twothirds are buying less meat. Overall, more than two in five respondents have changed their grocery shopping behaviour in response to higher food costs.
More than a third said they are buying private labels such as Compliments or President’s Choice, grocery stores’ inhouse brands, which are often a little cheaper than other products.
As well, consumers say they are increasingly paying attention to flyers, using coupons, and looking for discounted items, such as meat close to expiry. In fact, more than a quarter of respondents said they are buying food with the “enjoy tonight” label more often than they did in 2020.
The survey found that older respondents were more likely to have noticed food prices going up.
Charlebois thinks older generations are more bothered by rising food prices simply because they have a longer-term perspective; they remember much lower food prices in their lifetime.
Canadians are aware food prices have gone up this year, said Charlebois, but he thinks they may not know by how much.
For the past several years, Charlebois has questioned the accuracy of Statistics Canada’s Consumer Price Index (CPI).
Recently, Charlebois has been comparing Statistics Canada’s data on food prices to data collected by BetterCart, a Canadian company that collects daily data on food prices and compares them for consumers, and is a partner with the Dalhousie lab. He’s noticed a big difference in the price hikes on some items as reported by Statistics Canada compared to BetterCart.
For example, between January and August 2021, Statistics Canada’s monthly average retail price data showed that the price of butter went up 2.2 per cent. BetterCart reported a rise of 35.5 per cent, said Charlebois.
“I think the methodology is robust, but ... we’re not convinced that (Statistics Canada’s) data-capturing approach fully assesses or accurately assesses the impact of price fluctuations,” he said.
In an email, Statistics Canada spokesperson Anna Maiorino said the CPI is designed in accordance with international standards, and captures most food prices using weekly scanner data taken directly from grocery retailers and representing 17,000 target products.
The list of representative products is updated every year, and is chosen to emphasize products that are widely available and most popular among Canadian consumers, said Maiorino. She noted that smaller packaging of food products is reflected as a price increase according to the CPI.
Maiorino also said that Statistics Canada’s table of monthly average retail prices (which the Star used for all average food prices in this article attributed to Statistics Canada) is measured and calculated differently than the CPI, which she said is a more accurate measure of price change over time.
For example, while the monthly average retail prices table shows the price of butter going up almost seven per cent between August 2020 and August 2021, the CPI for butter shows a growth of 10.2 per cent during that time, she said.
Charlebois noted that the statistics on rising food prices are averages, which means in certain categories some prices are rising more than others.
For example, the price of certain cuts of beef might go up at a higher rate than ground beef, he said.
“As consumers, we’re actually being impacted by extremities.”