COVID-19: Higher prices at the grocery store are here to stay
Meanwhile, Canadians are spending less on food overall by cooking at home more and visiting restaurants less, analyst says
We’d better get used to spending more at the grocery store.
I previously reported that food prices are expected to rise up to four percent this year. Increased costs are likely to last well beyond the end of 2020, according to Sylvain Charlebois, professor and senior director of Dalhousie University’s Agri-Food Analytics Lab.
The cost of food is increasing almost four times more rapidly than the price of any other durable goods in the economy.
COVID-19 is making everything more expensive to produce, process, distribute, and sell, with producers having to implement things like new cleaning protocols, higher wages in some cases, and e-commerce infrastructure.
As a result, we could see the average Canadian family devote a much greater percentage of their budget to food.
Pre-COVID, roughly nine percent of household budgets was devoted to food, one of the lowest percentages in the world, Charlebois says. That could rise to 11 or 12 percent by 2022.
“In comparison, Americans are at 6% or 7%, whereas Europeans will spend about 15%,” he said in a release. “In 1970, Canadian households were spending 21% of their budgets on food. So, in a sense, we are going back in time.
“Simply put, current food economics are overwhelmingly forcing us to revisit the social contract we have with food,” he adds. “Current food economics are making us more attuned to what is happening around us foodwise. It is also making us more food literate.”
Despite food prices rising, most households are in fact spending less on food.
“Each household in Canada is saving approximately $5 a day by just cooking at home and avoiding restaurants,” Charlebois says. “That is roughly more than $345 since the beginning of the beginning of the pandemic, which far exceeds price hikes shoppers needed to absorb during the same period.
“Any way we look at it, COVID-19 will have a long-lasting impact on our relationship with food, and no one is immune to that.”