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The cost of groceries is changing the way Canadians shop. Here's how


The high cost of groceries isn't just taking a bite out of Canadians' bank accounts, it's also devouring any hope that prices may decrease.

A new Leger survey has found that 64 per cent of Canadians think that the rate of inflation at the grocery store is worsening.

Sylvain Charlebois, food analytics professor at Dalhousie University in Halifax, N.S., believes "people may have forgotten that just last year in January, the food inflation rate at the grocery store was over 11 per cent, now we're at 3.4 per cent, so things are actually getting better but perhaps not fast enough for most Canadians."

Charlebois says the truth lies in the middle of the supply chain.

"Are grocers to blame for gouging consumers? Not really," he says. "But are grocers gouging someone? Yes they are, especially Loblaws and Walmart, they're gouging suppliers."

Speaking to Parliament in Ottawa last week, Charlebois shared that "what is really hurting Canadians and perceptions is price volatility and the shenanigans happening between suppliers and grocers is pushing prices higher, bringing more volatility at retail in categories like meat, produce and bakery."

As a result, more Canadians say they've switched grocery stores in the past year in search of better deals.

A separate survey by Dalhousie's Agri Food Analytics Lab and the marketing insight firm Caddle says almost two-thirds of Canadians have swapped stores. Once they're inside shopping, the report found that nearly 60 per cent of customers consistently seek out discounted food products, with expiring or clearance items at the top of their shopping lists.

The study, according to Charlebois, "underscores the importance for retailers to strategically prioritize discounting initiatives to remain competitive in an increasingly dynamic market."

This all comes as Loblaw shared its fourth quarter earnings today, which increased 3.7 per cent, or $524 million, to $14.5 billion, from the same period last year.

This will no doubt lead to even more skepticism from shoppers in the grocery aisles wondering why they're paying an increasing amount for essential items, Charlebois said.

However, food price watchdogs say gross margins have largely remained the same over the last five years, according to the ratios.

Canada currently has the second lowest food inflation rate in the G7 behind the United States.

This week, Loblaw announced that it's growing its store network as part of a record $2-billion capital investment plan.

Charlebois says it's part of the company's annual public relations push.

"They do this every year, basically, to show that they're good corporate citizens," he said. "I'm expecting more of these kind of announcements over the next little while just to show Canadians that there are people working in these companies, and they do care about Canada's food security."

Though Canadians can expect further sticker shock at the grocery store this May – a period where large grocers increase their annual fees for suppliers, and in turn suppliers will raise prices – the price war will once again leave Canadians footing the grocery bill. Top Stories

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