It’s hard to avoid news about inflation from major news outlets these days, and caught up in it all is the rising cost of food.
Kevin Grier of Kevin Grier Market Analysis and Consulting has published a grocery trade report for September that includes food inflation numbers. He joined Shaun Haney on RealAg Radio recently, to talk about the report and what Canadians are focused on.
“Even during periods of recent memory, you know four or five years, when we’ve had food deflation, consumers still think that we’ve got food inflation, so Canadians are focused big time on food prices,” says Grier.
This year there is indeed food inflation, says Grier, and the latest grocery report shows food prices are up about four per cent, which is the most it’s been in a long time. For example, meat prices are up significantly, as well as egg prices.
It’s hard not to wonder if discussing inflation so much creates more inflation, a concept that Grier can explain with two things: a direct relation between the price of wheat, corn, or cattle, and food prices six months later; and, how competition between retailers drives inflation. (Story continues below player)
“The more the media talks about food inflation, the more I think that the retailers have a reason to pass it along,” says Grier, adding that he’s not saying the media and retailers are colluding, but it creates an environment for retailers to bump up prices.
Turning to the grocery trade report and consumer price indices, Grier says that packaged foods — those that appear in the middle of the store, such as crackers or condiments — are a good bellwether of competition between retailers. That’s because whether going to a high-end or discount grocery store “Heinz ketchup is Heinz ketchup,” says Grier.
The price of packaged goods have been inching higher and higher overall, which tells Grier that the level of competition is easing back in Canada.
Restaurant trends are also included in the report, with a consumer price index of around three per cent, and Grier says that the number has been surpassed by grocery pricing but will stay steady.