Grocery Basket | Canada is getting poorer and our grocers know it

Data on food sales tells us that Canada is becoming poorer at an alarming rate. According to Canadian Food Prices Report for 2024, a person would have to spend $339 per month to ensure a healthy diet. The current average monthly expense totals $248. Until July 2021, Canadians on average spent more than their desired budget to support a healthy diet. This is unfortunately no longer the case.

Canada appears to be a savers’ market, a trend that could persist for some time. Recent data from Statistics Canada on retail food sales, as well as values ​​measuring gross domestic product (GDP), paint a worrying and bleak picture, particularly for attracting more food businesses or grocery stores to our country .

Even though our population increased by more than 3% last year, our GDP showed an increase of barely 1%. Canada’s economy remains highly integrated with the most robust economy in the world, that of the United States. Despite our proximity to this economic superpower, the advantages of our geographical position seem to be dwindling. The most alarming aspect delivered by the January GDP values ​​tells us that one of the most dynamic economic sectors in Canada is based on public services.

The GDP per capita gap between Canada and the United States has widened by 106% since 2015, and this trend shows no signs of reversing. In other words, despite a growing population, Canada is getting poorer.

For those who work in the food sector, this news does not please anyone. Through Statistics Canada, we also learned that in January 2024, the average Canadian spent $248 per month on retail food purchases, compared to $258 in January 2023 and $282 in February 2017. These data are all in dollars real. According to the Annual report on food prices in Canada for 2024, a person would have to spend $339 per month to maintain a healthy diet. Until July 2021, Canadians on average spent more than their desired budget to support a healthy diet. Subsequently, the trend unfortunately reversed (see graph).

Canadians are wasting less or finding other ways to obtain food outside of traditional channels like dollar stores and non-traditional sales. Per capita food spending in our country has never been lower than it is right now.

You might think grocers are struggling to overcome this situation, but they are readjusting their strategies and putting more pressure on suppliers by juggling higher fees and lower prices. A perfect set of conditions for a potential price war later this year!

Foodservice data offers a different perspective. On average, Canadians spent $169 at restaurants in January, roughly equal to last year’s spending and an increase from $149 in January 2018. However, these amounts are still in real dollars . About 41% of all money spent on food in the country is in restaurants, a ratio that hasn’t really changed. The distribution in the United States is around 54%, in favor of food service. Given how frugal the market is, it’s surprising to see so much money spent in restaurants, where you generally get less food for your money.

Inflation is forcing Canadians to spend less at grocery stores, which may seem counterintuitive, but that’s what the data tells us. Luckily, the population is increasing. Currently, about 18% of all retail dollars spent go on food, up from 21% in 2017. In other words, the cost of living is a challenge for many Canadian households and balancing their budgets they choose to reduce food-related expenses. People are opting for takeout orders more often to avoid tipping, delivery fees and overpriced drinks.

Regardless of how we interpret this data, it simply remains discouraging. This is unfortunately what happens when our population increases, but our collective economic wealth stagnates or slows down.


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