Industry Snapshot: COVID-19 and rising food prices in Canada

Ottawa – July 9, 2020 – The financial impact of the COVID-19 on the grocery sector has been good news for major grocery chains, but for shoppers, it’s another story. With bars and restaurants mostly shut down, people are cooking at home more often and the demand for groceries has remained higher than usual, with some chains reporting a profit increase of much as 35% from a year ago. What’s also increased is the price they are charging shoppers. New data from Statistics Canada’s Consumer Price Index reveals that food prices are on the rise with significant increases to the prices of meat, as well as for basic, non-perishable items that people stock up on.

• Consumers paid 7.8% more for meat in May 2020 compared to just one year ago, with fresh and frozen beef prices seeing the biggest gains (+13.7%) since 2015. This increase was due to a series of supply disruptions including plant closures as a result of COVID-19, and higher import prices from a weaker Canadian dollar.

• Prices for canned tuna increased by 13.9% compared to the same month in 2019.

• Prices for flour and flour-based mixes went up by 9.4% compared to 2019. As well, prices for rice and rice-based mixes also increased significantly (+9.3%), coinciding with higher demand for non-perishable foods.

• While chicken consumption increased by 7% in May 2020, the protein is still relatively cheap compared to beef and pork.

With rising food prices, food affordability continues to be a greater concern among Canadians, with recent reports suggesting that overall food prices could increase by as much as 4% over 2020.

The graph shows food inflation leaders in May 2020.

Sources: Canadian Chicken Market Report. Kevin Grier Market Analysis and Consulting. June 2020.

Accessed Online: https://www.kevingrier.com/publications, Consumer Price Index, May 2020. Statistics Canada.

Accessed Online: https://www150.statcan.gc.ca/n1/daily-quotidien/200617/dq200617a-eng.htm?indid=3665-1&indgeo=0