Food Prices Decrease Overall, But Grocery Costs Have Skyrocketed Compared to Previous Years

Although food inflation has decreased from its peak, grocery prices remain significantly higher than they were a few years ago.

Statistics Canada reported that grocery prices have increased by 21.4 percent compared to three years ago, despite food prices being a major driver of lower inflation in April.

Inflation on groceries was just 1.4 percent in April, contributing to an overall decline in inflation to 2.7 percent from 2.9 percent in the previous month.

This decrease in inflation does not erase the price growth that has occurred over the past few years.

Between April 2021 and April 2024, grocery prices have gone up by 21.4 percent according to Statistics Canada.

Related Stories

RBC analyst Irene Nattel noted that consumers are still facing the effects of this significant price increase.

As a result, shoppers are likely to continue seeking out lower prices through discount stores, promotions, and private-label products.

Higher food prices have prompted many consumers to change their shopping habits, with more people turning to discount stores and looking for sales and store-brand items.

Canada’s major grocers have been expanding their discount offerings across the country to meet the demand.

While prices on some food items have decreased year over year, others have seen double-digit increases, such as sugar, grapes, carrots, and onions.

Restaurant price inflation also eased in April, growing by 4.3 percent compared to 5.1 percent in March.

Political and public pressure on major grocers is mounting as consumers struggle with higher food prices. The government has urged grocers to help stabilize prices, and some consumers are boycotting Loblaw-owned stores.

The increase in inflation has also led to higher levels of food insecurity in Canada.

Market analysts are watching for a potential interest rate cut from the Bank of Canada in June as inflation continues to decline.

BMO chief economist Douglas Porter noted that while there have been several months of positive news on the inflation front, June remains uncertain, with any rate cuts from the Bank of Canada expected to be gradual.