Each week, Melanie Morrison collects data on the prices Canadian supermarkets charge for tens of thousands of items.
But these days, Morrison, who runs a Saskatoon-based company called BetterCart Analytics, is primarily interested in the price of just three of them: condensed milk, peanut butter, and old butter.
Based on the data she has collected on these three products, Morrison is convinced that Statistics Canada’s efforts to track food price inflation data may require a big rethink.
Poor data collection on food prices means Canadians can find it much more difficult to put food on the table than the federal government acknowledges, after all.
Take the federal agency’s own findings, Morrison said. In September 2019, Canadians paid an average of $ 2.82 per 500 grams of peanut butter, according to Statistics Canada.
By September 2020, that price had dropped to $ 2.69. And by September 2021, it was back at $ 2.82.
“I don’t see this in my data,” Morrison said. “We see a range of $ 3.39 to $ 5.59 in the current price. And at the highest level, we see up to $ 9.99. “
And then there is the butter. By Morrison’s estimate, Statistics Canada data showing that the average price of 454 grams of butter has grown 5.9 percent over the past year is appalling.
“Our data indicates that the actual rate of butter price inflation over the past year was 19.8 percent on average in Canada,” Morrison said.
“I am concerned about the validity of a lot of this data.”
She is right to be: millions of Canadians live on tight food budgets and low fixed incomes that are tied to the rate of inflation for the cost of living, including inflation in the prices of staples like butter, cooking oil, meat and potatoes.
And it’s not just food prices and inflation figures that Statistics Canada reports that Morrison is concerned about.
She said the size of the containers is not accurately reflected in some cases, which means that the amount of food for the price may be decreasing.
Take evaporated milk, for example. Statistics Canada tracks the price of 385-millimeter cans. But those cans no longer exist in Canadian supermarkets.
“Now it’s sold in 354-millimeter cans,” Morrison said. “The cans have shrunk.”
Prices, on the other hand, have not. That may mean, due to what’s known as a “shrinkage,” that the cost of items like evaporated milk may have risen in a way possibly overlooked by Statistics Canada, even though the agency makes efforts to adjust for different. container sizes.
Each month, Statistics Canada provides data on food prices, as well as data on everything from footwear to cars, in a monthly report called the Consumer Price Index (CPI). For more than 90 years, the CPI has tracked the prices of dozens of Canadian products help governments and businesses adjust their payments to millions of pensioners and welfare recipients in accordance with prevailing cost inflation rates.
But Morrison believes Statistics Canada’s food price tracking efforts, and its annual food cost inflation figure of 4.2 percent over the past year, may be based on data that is too far from Canadian stores and kitchens. . If the government isn’t accurately tracking the inflated cost of something as basic as butter, how reliable is the rest of the CPI?
Until recently, Statistics Canada had a near-total monopoly on the data needed to calculate inflation rates for food prices.
But the Internet has changed that, said Morrison, whose company claims it can track real-world food prices more completely than Statistics Canada to help supermarkets make what it calls “real-time data-driven decisions.”
Morrison’s cornucopia of grocery price data is collected from thousands of grocery stores, both chain and independent, across the country, using online sources such as grocery store brochures and their websites.
It is a complex business, driven by massive computing power that involves Tasks of “web-scraping” and data mining. It now has nearly a billion products registered in its databases.
However, not all Morrison’s customers are shopkeepers who think of cutthroat price competition.
He also collaborates with Sylvain Charlebois, Director of the Laboratory for Agri-Food Analysis at Dalhousie University in Halifax. Together, they are testing the accuracy of the CPI food price inflation figures and Statistics Canada data collection as it pertains to food prices.
Charlebois and Morrison emphasized that Statistics Canada has “a stellar reputation” for measuring macroeconomic metrics for policy makers, industry and consumers alike.
The CPI, Charlebois said, is “probably accurate in many aspects of our economy,” including durable goods, cars, energy and housing. ”
But food distribution, he said, “is getting more complicated as the market dynamics are much more intense than it used to be.”
In Charlebois’ view, Statistics Canada’s biggest problem in tracking food prices is that it likely relies too heavily on just three national chains within Canada’s highly concentrated grocery industry for much of its price data.
Unlike the US, where the Economic Research Service of the Department of Agriculture relies largely on a vast network of consumers to obtain food price data from 120,000 households, Statistics Canada relies heavily on data from the three chains with which it “partners”. Due to “corporate confidentiality,” Statistics Canada cannot reveal the names of the three chains, said Heidi Ertl, StatCan’s director of consumer pricing.
“We have oligopolistic conditions in the grocery industry,” Charlebois said, referring to the very small number of chains that control about 80 percent of the grocery market. With only three companies providing much of Ottawa’s food price data, “I suspect Statistics Canada’s methodologies may be a victim of that,” he said.
Charlebois also wonders if Statistics Canada is doing enough to track prices at independent grocery stores in Canada.
All of these questions fuel his basic concern that the federal government is underestimating the budget pressures on low-income Canadian families, especially retirees and welfare recipients whose income is often tied to the inflation rate set in the CPI.
Contacted by phone and email, Jason McLinton, vice president of the grocery and regulatory affairs division of the Retail Council of Canada (RCC), declined to discuss whether there are “oligopolistic” market conditions within the Canadian retail food industry and whether, Partly because of this, the retail price data that Statistics Canada receives from grocery retailers does not sufficiently represent the actual prices Canadians pay for food.
“It is not surprising that the results of the Statistics Canada report, whose data and methodology are easily accessible online, may differ from research whose data and methodology are not,” McLinton said in response to questions about Charlebois’ research with BetterCart. .
Charlebois, however, noted that Statistics Canada’s food price inflation calculations are based on raw data from grocery stores that is not available online and is not easily accessible to the public or independently verifiable. .
It is collected through a data collection process that, according to him, is not explained in sufficient detail to be considered transparent to the public.
It is “very ambiguous,” he said.
Overall, Charlebois gives Statistics Canada rather low ratings for public disclosure of its raw data and data collection methodologies for the food section of the CPI, although it feels it may now be changing as public dismay over inflation rises. of food prices.
Of Canada’s top five supermarket chains – Loblaw, Metro, Sobeys, Pattison and Walmart – only Metro responded to interview requests on the subject of its role to help Statistics Canada track food prices.
But it was not because Metro wanted to discuss the issue. “I’m sorry, but we don’t have anyone who can speak up on this issue,” Metro communications manager Stephanie Bonk said in an email.
Statistics Canada Ertl said in a phone interview and in emails that it considers Charlebois’s criticisms of the way food prices are documented unfair and incorrect.
Before the COVID-19 pandemic, interviewers visiting stores collected food prices, he said, adding that “now this is replaced by online prices using store websites or brochures.”
Beyond this, he explained, food prices are now primarily captured using weekly scan data collected directly from the three unnamed supermarket chains.
“The data is collected weekly and includes sales and promotions where appropriate,” Ertl said.
Food prices are collected at approximately 500 grocery outlets in all regions of Canada, and “17,000 target products are sourced from grocery retailers,” he added.
However, Ertl acknowledged that Statistics Canada may not be getting enough data, adding that it has been pushing to persuade other major national supermarket chains to participate in the data collection.
“We are close to reaching an agreement with a fourth chain,” he said. “We are trying to cover the whole country. We would love to get data from as many retail scanners as we can. “
That’s good news, Charlebois said.
But in an era where a supermarket sells up to 40,000 food products, tracking 17,000 products, impressive as it may sound, may not be good enough, he said, given that Statistics Canada should be able to harness the computing power necessary to do so.
And even if another supermarket chain proves to cooperate, Charlebois worries that Statistics Canada is still missing a large chunk of total known grocery prices that it could track much better if it took the US consumer-oriented approach. like the BetterCart website. -scouring, along with existing ones, including data you get from your three unnamed grocery “partners.”
Ertl said a CPI modernization program has been in place since 2018 to review its methodologies and expand its scope of data collection.
“There is always room for improvement,” he said.
Back in Saskatoon, Morrison said she is willing to help Ertl in any way she can.
“We are not looking for a fight with StatCan,” he said. “In an ideal world, we could help them.”