Canadians cutting back food purchases due to rising grocery store prices
A new survey (above) has found 24 per cent of Canadians have cut back on the amount of food they are buying due to rising prices at grocery stores.
The survey, conducted at Dalhousie University’s Agri-Food Analytics Lab on Sept. 8 and 10 and included 5,000 Canadians across the country, found that: eight per cent of participants have changed their diet to save money on food; seven per cent skip meals to save money for groceries and 15.5 per cent have started growing their own food as a result of inflation over the past year.
“We are going to see increases in inflation to be higher than what we were observing two or three years ago,” Christos Shiamptanis, associate professor at the department of economics at Wilfrid Laurier University said.
With inflation at a 40 year high of eight per cent, it can be expected that Canadians will continue to face challenges with high grocery prices.
“There is a high probability that we will continue seeing higher food prices. However, it’s really hard to pinpoint the duration, and it’s also really hard to identify if these increases could amplify or shrink as we go into the future,” he said.
The lifting of COVID-19 restrictions has contributed to the reality of the economy: high inflation caused by three big factors, according to Shiamptanis.
The first factor is supply challenges.
“The pandemic, unfortunately, has forced a lot of individuals to stop working, especially in countries, states or provinces where there’s a lot of manufacturing. Once you close down a particular region, you create a sequence of events where items cannot be produced on time and then cannot be shipped on time,” he said.
“That’s the supply chain challenge: producing things and then moving these things around the world.”
There is a high probability that we will continue seeing higher food prices. However, it’s really hard to pinpoint the duration, and it’s also really hard to identify if these increases could amplify or shrink as we go into the future.Christos Shiamptanis, associate professor at the department of economics at Wilfrid Laurier University
The second factor is related to energy prices.
“One of the key reasons energy has gone up is the war in Europe between Ukraine and Russia. It also drove up the prices of gas and oil, and given that gas is a world commodity, the prices are affected throughout the world, contributing to inflation,” Shiamptanis said.
The third factor is government policies.
“Government policies now can break into the monetary policy––the central bank, and fiscal policy––the Ministry of Finance. What the central bank has done during the recession, is they’ve lowered the interest rates, making it easier to borrow,” he said.
“On top of that, in order to help during the pandemic, the Ministry of Finance provided different programs––stimulating the demand. When you’re stimulating the demand too much, it drives up prices.”
These three factors attest to the difficult times of COVID-19, and the struggles Canadians will continue to endure- particularly
“There are always certain socioeconomic status and income status struggles and that, unfortunately, is going to continue. We know that the federal government has made some announcements to support and treat them, but this is a group that is going to be hit the hardest by inflation,” Shiamptanis said.
Additionally, higher inflation will cause the central bank to increase interest rates.
“We are expecting them to continue to increase the interest rates, so they’re going to reverse what they’ve done during the pandemic. The main reason is to slow down the demand of people borrowing to curb the price increases, but that is also going to have a negative effect on some individuals,” he said.
As the last months of 2022 approach, inflation will increase the price of groceries, which could force Canadians to continue cutting back on the amount of food they buy.