March 28, 2023

Can price freeze inflation? What to Know When Grocers Fight for Your Dollar – National |

As eye-popping inflation hits most grocery store aisles, some chains are working harder than ever with deals and promises to entice shoppers.

Grocery and Finance experts tell Global News that switching stores to get the best deal can sometimes help shave cents off your final bill, but few expect recent promises from major grocers to help Canadians fight inflation.

Food bills have been a source of particular pain for households this year, as food price increases have consistently outpaced headline inflation over the past 10 months, according to Statistics Canada.

Inflation for grocery products rose by 11.4 percent last month, which is a new record for 41 years.

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According to Statistics Canada, the prices of many basic grocery items rose in September.

Sylvain Charlebois, director of Dalhousie University’s Agri-Food Analytics Lab, says it was a well-timed decision for Loblaw to announce a price freeze on No Name brands on Monday to get ahead of the latest CPI. figures.

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Charlebois is giving Loblaw a “credit” for the move, which covers more than 1,500 products and runs from November to January — covering the grocery giant’s lucrative holiday shopping season.

He adds that the line’s wide selection allows shoppers to create a complete “product portfolio” if they want to adjust their habits to take advantage of the price freeze.

While Charlebois tells Global News it’s a month or two “too late,” he says many Canadians are pointing the finger at grocers themselves for skyrocketing food prices, and it’s up to the chains to show they take Canadians seriously.

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“I’m not sure it’s really going to combat the effects of inflation. It’s going to provide Canadians with predictability instead of looking at labels,” Charlebois says of Loblaw’s price freeze.

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“Predictability has a lot of currency.”

Metro responded the next day, claiming that maintaining prices through the holiday season is standard grocery practice.

The grocer also said at the time that it would not accept cost increases from suppliers for around the same period, although Charlebois said the move “caused a lot of confusion” and “didn’t really do anything”.

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Others are also unconvinced that Loblaw’s price freeze will have a material impact on families struggling with inflation.

Personal finance expert Rubina Ahmed-Haq points out that in order for Loblaw to freeze prices now, they’re just maintaining higher costs that have already risen with inflation.

“It’s not like they’re lowering prices and really making it feel like when you shop this week it’s a little bit more affordable than last week,” he tells Global News.

“I would have liked to see grocery stores … actually make a difference by lowering prices to reflect the fact that transportation is costing less and inflation is cooling.”

Full service stores are likely to cost more

Switching up your grocery store may make sense for some shoppers feeling the pressure of inflation, but experts say there are a few caveats to keep in mind before changing your routine.

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Ahmed-Haq says he is hearing that more and more buyers are dropping “brand loyalty” as prices rise.

“We used to go to the same grocery stores because they’re close to our house and we like the products they sell, and maybe we get great points there because of an existing credit card,” she says.

“Now consumers, Ruokauppa buyers go where the prices are the cheapest.”

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A recent study by the Agri-Food Analytics Lab reveals how consumer buying habits are changing.

A survey conducted in September showed that 21 percent of shoppers choose private label brands such as No Name more often.

About one in three shoppers use coupons more often, while 32.1 percent read weekly brochures more often.

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About 19.1 percent of shoppers go to discount stores more often to buy food, and 11.5 percent buy food regularly at the dollar store.

University of Guelph food science professor Simon Somogyi tells Global News that as a rule of thumb, grocery stores with more in-store services, such as a large deli counter and in-house bakery, will be more expensive than discount options, such as the aptly named No Frills or Food Basics.

However, the total amount at the end of the receipt is not the only price to remember. Somogyi points out that the further you have to travel to get there, the more you have to travel to get there, the more profit you lose from shopping at discount stores.

“If you happen to travel across town or drive long distances to get one cheaper product, you’d spend a lot on fuel. It’s also a bit of a waste of money,” he says.

When can buyers expect relief?

While Canadians have been able to blame Russia’s invasion of Ukraine and inclement weather for driving up grocery prices, Charlebois says Canada’s own loonie is increasingly to blame for food inflation.

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He says that as the winter months approach, Canada will have to rely on fresh food shipments from the United States and Mexico. When the Canadian dollar fluctuates against the US dollar, goods from south of the border cost importers more and prices are passed on to consumers.

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“It’s a dangerous time of year to see currency becoming an issue as we slowly march into winter,” says Charlebois.

Despite these short-term headwinds, Charlebois says that after Ruokakauppa’s record year of price increases, he expects 2023 to be “kinder” to consumers.

Somogyi points out that with the Bank of Canada raising interest rates, the Canadian dollar may strengthen a bit more this year and keep import prices somewhat under control.

But he also says Canadians can mitigate the rising cost of fresh fruits and vegetables heading into the winter months by buying them frozen.

Food that has been “frozen” when collecting food stamps and is usually sold for less at the grocery store, Somogyi says. Consumers also tend to waste less frozen produce because it is resealed and put back in the freezer when opened, unlike fresh options that can expire before use.

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Somogyi also points out that part of the inflation rate in the grocery trade is products containing grain – for example pasta, cereal and bakery products.

Although the prices of grain raw materials have fallen globally in recent months, those reductions have not yet reached grocery store shelves, he says.

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Somogyi says Canadians would be wise to buy products that don’t contain grains or compare prices on those products to avoid the sharpest pinch of inflation.

“It may mean I have to cut back on these items to some extent. Look for cheap options,” he says.

“I think it’s important to be a smart shopper in this day and age when the prices of all food items are going up pretty dramatically.”

– The Kyle Benning Files of Global News’ Ross Lord

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