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Industry Snapshot: Retail food sector

Toronto – August 14, 2019 – Statistics Canada’s first quarter retail food sales by channel survey showed total retail food sales and supermarket food sales were up by 4 percent.

• General Merchandisers (big box stores that also sell food) sales were only up 2 percent. It is surprising to see supermarket food sales growth outpace the General Merchandiser (GM) channel. During the period going back to 2004, the supermarkets' rate of increase was rarely or never greater than GM.

• Food inflation at retail is likely going to be beneficial to grocer margins from the current quarter. Given the flat-lining of packaged goods costs at the manufacturer level, it is clear that the increased prices at retail were not the result of costing pressure.

• Once again in June, food store inflation was led by fresh vegetables. June was the ninth month in a row in which fresh vegetables have increased by double digits.

• Based on the pattern of Consumer Packaged Goods (CPG) prices at retail and total food prices at retail, it appears that the CPG (packaged foods, beverages, toiletries, over-the-counter drugs, and other household products) may be driving inflation. That is, the CPG drives food inflation with fresh items topping up and making an added 1 to 2 percent difference to the total basket.

Snapshot courtesy of Kevin Grier Market Analysis and Consulting Inc. www.kevingrier.com.

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United Food and Commercial Workers Union
Canada's private sector union