Multiple grocery store staples saw price hikes not only ease but reverse course in January, according to Statistics Canada.
The agency on Tuesday reported an overall decline in the annual rate of inflation to 2.9 per cent last month. As part of that, food inflation at the grocery store cooled to 3.4 per cent, down from 4.7 per cent in previous two months.
StatCan says the easing was “broad-based,” with many aisles of the grocery store seeing relief.
Many food staples saw price growth drops from December to January, including breakfast cereal (down 2.3 per cent), pasta mixes (down 6.6 per cent), rice (down 1.4 per cent), frozen fruit (down 2.9 per cent) and margarine (down 4.3 per cent). (Figures not seasonally adjusted.)
Compared with January 2023, meat price growth cooled to 2.8 per cent annually. Price growth for dairy products was 1.5 per cent year-over-year, while eggs were up only 1.3 per cent annually, but down slightly (0.1 per cent) month-over-month.
The cost of making a BLT was cheaper in January 2024 than a year earlier, in fact. Bacon prices were 8.4 per cent lower, tomatoes were 9.8 per cent cheaper and lettuce cost 18.6 per cent less year-over-year, according to StatCan. (The cost of the bread was flat year-over-year.)
Eric La Fleche, CEO of Montreal-based grocer Metro, warned in late January that prices on some products including orange juice might be set to rise in February amid inclement weather and an end to the annual supplier blackout period across the industry.
While overall price hikes at the grocery store have cooled significantly over the past year, inflation continues to bite while dining out. The prices of food purchased from restaurants was up 5.1 per cent annually in January, StatCan said, down from growth of 5.6 per cent in December.
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Andrew DiCapua, senior economist at the Canadian Chamber of Commerce, tells Global News that he’s not surprised inflation has been stickier at restaurants.
He notes that running a restaurant is typically a business with thin margins, making them more “price sensitive” in difficult economic environments.
“Operating a business is really challenging right now,” he says. “You’ve got increased costs, you’ve got higher insurance, you’ve got higher rent, you’ve got to pay your workers more.”
DiCapua argues that once the Bank of Canada starts cutting interest rates, restaurant operators and other service-side business owners will have more confidence that inflationary pressures are easing, giving them more leeway on their pricing.
“When they can see that rates are going to be coming down, costs will be coming down, wage pressures will ease. I think that we’ll see some progress on that in the next couple of months,” he says.
– with files from Global News’ Anne Gaviola
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