Food Inflation Rises in May for the First Time in Almost Twelve Months

Canadian households are feeling the pinch of higher grocery prices, as food inflation rose in May for the first time in almost a year, according to Statistics Canada.

In May, grocery prices increased by 1.5 percent, slightly higher than April’s 1.4 percent rise, marking the first acceleration since June 2023.

With food costs already elevated in Canada, overall prices have surged by 22.5 percent since May 2020.

RBC Capital Markets analyst Irene Nattel noted that these high prices continue to burden consumers, leading them to adopt cost-saving strategies like seeking discounts, promotions, and sales.

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Ms. Nattel stated that the continuous rise in food prices remains a major challenge for household budgets, driving consumers to continue seeking value in their purchases.

Statistics Canada attributed the May food price growth to higher prices for fresh vegetables (up 3.5 percent), meat (up 1.3 percent), fresh fruit (up 2.2 percent), and non-alcoholic beverages (up 2.4 percent).

The increase in meat prices was primarily due to rising costs of fresh or frozen beef, driven by high demand and limited supply.

A survey by Lightspeed Commerce Inc. revealed that increasing food prices are influencing Canadians’ dining habits, leading them to tip less and look for happy hour specials.

According to the survey, 70% of diners have noticed higher prices at restaurants over the past year, with 40% experiencing smaller portions of their favorite dishes, known as “shrinkflation.”

Despite cost pressures, 44% of respondents plan to continue dining out. The survey also highlighted a rise in money-saving behaviors, such as using coupons (39%), choosing value meals (33%), and taking advantage of happy hour specials (26%).

Additionally, 25% of Canadians mentioned reducing their tips as a way to manage dining expenses.