Canadian consumers are noticing the rise in food prices at the grocery store, as well as the “inflation contraction,” and are changing the way they shop in response.
A new report from Dalhousie University’s Agri-Food Analysis Laboratory, in partnership with research firm Caddle, surveyed more than 10,000 Canadians this fall about food prices and how they are responding to them.
Prices of many staples, such as meat and dairy, have risen recently, the report notes, partly due to the pandemic, but also due to inclement weather.
Consumers have noticed. Eighty-six percent of those surveyed said they believe food prices are higher than they were six months ago.
“Based on the survey results, it is clear that people have noticed that there is a difference in terms of food prices and affordability,” said Sylvain Charlebois, professor of food policy and distribution at Dalhousie, and director of the laboratory.
In particular, the survey found that consumers are noticing that the prices of meat products are rising more.
According to Statistics Canada, the average retail price of beef products has increased between March and August, although some more than others. For example, based on Statistics Canada data on monthly average price changes, the price of a razorback roast per kilogram rose 17%, while the price of a sirloin rose almost 10%. The average retail price of chicken, bacon and pork also increased.
Almost three-quarters of those surveyed said they noticed a “contraction-inflation”, which is when the price of a product does not change significantly, but its size, volume and / or quantity decreases.
This phenomenon can mask price increases and is therefore more difficult for consumers to track.
For example, earlier this year, Mondelēz Canada Inc., which makes Oreo cookies, reduced the size of some of its cookie packages by around 10 percent, due to a number of factors including higher product costs. basic, The Canadian Press reported.
The contraction in inflation is more difficult to measure than the rise in food prices, Charlebois said, although it is still a product of those prices.
It’s something that primarily affects packaged and processed foods, he said, and companies are pretty good at masking it. Often the package remains the same size even if the weight decreases. For example, a company could add a “bubble” to the bottom of a jug of orange juice, but otherwise keep the jug the same size, he said, adding that these changes often occur over an extended period of time.
“It’s subtle,” Charlebois said. “They are trying to sell you the illusion that you are buying the same thing, but you are not.”
Charlebois doesn’t think contraction is necessarily a bad thing; it’s just another way companies are trying to tackle rising food costs.
After all, companies know that consumers will be more upset if the price of a box of cookies goes up than if the price stays the same but the weight of the package goes down, Charlebois said.
“I don’t think people are walking away from the products just because of the shrinkage,” he said.
In response to rising food prices, half of those surveyed said they are buying less meat; in Alberta, almost two-thirds buy less meat. Overall, more than two in five respondents have changed their grocery shopping behavior in response to higher food costs.
More than a third said they are buying private labels like Compliments or President’s Choice, the in-house grocery store brands, which are often slightly cheaper than other products.
Also, consumers say they are paying more and more attention to brochures, using coupons and looking for discounted items, such as expired meat. In fact, more than a quarter of those surveyed said they buy foods labeled “enjoy tonight” more often than in 2020.
The survey found that older respondents were more likely to have noticed an increase in food prices.
Charlebois believes that older generations are more bothered by rising food prices simply because they have a longer-term outlook; they remember food prices much lower during their lifetime.
Canadians are aware that food prices have risen this year, Charlebois said, but thinks they may not know how much.
For the past several years, Charlebois has questioned the accuracy of Statistics Canada’s Consumer Price Index (CPI).
Recently, Charlebois has been comparing Statistics Canada data on food prices with data collected by BetterCart, a Canadian company that collects daily data on food prices and compares them for consumers, and is a partner of the Dalhousie. You have noticed a big difference in price increases for some items as reported by Statistics Canada compared to BetterCart.
For example, between January and August 2021, Statistics Canada monthly average retail price data showed that the price of butter rose 2.2%. BetterCart reported a 35.5 percent increase, Charlebois said.
“I think the methodology is robust, but … we are not convinced that (Statistics Canada’s) data capture approach fully assesses or accurately assesses the impact of price fluctuations,” he said.
In an email, Statistics Canada spokeswoman Anna Maiorino said that the CPI is designed in accordance with international standards and captures most food prices using weekly scanner data taken directly from grocery retailers and that represent 17,000 target products.
The list of representative products is updated annually and is chosen to emphasize the products that are widely available and most popular with Canadian consumers, Maiorino said. He noted that smaller packages of food products are reflected as a price increase according to the CPI.
Maiorino also said that Statistics Canada monthly average retail price table (which Star used for all average food prices in this article attributed to Statistics Canada) is measured and calculated differently than the CPI, which she says is a more accurate measure of price change over time.
For example, while the monthly average retail price table shows that the price of butter rose almost seven percent between August 2020 and August 2021, the CPI for butter shows a growth of 10.2 percent during that time, said.
Charlebois noted that the statistics on rising food prices are averages, meaning that in certain categories some prices are rising more than others. For example, the price of certain cuts of beef could rise at a higher rate than that of ground beef, he said.
“As consumers, our extremities actually affect us.”
With files from The Canadian Press
Reference-www.thestar.com