Waterloo region's food stores hope to minimize impact to customers as food prices rise, but have concerns

Food inflation has reached five per cent and across the country Canadians can expect both sticker shock and "shrinkflation" as prices rise dramatically while portion sizes diminish.

In his research as director of Dalhousie University's Agri-Food Analytics Lab, Professor Sylvain Charlebois says there are three main factors contributing to increased food prices across Canada.

"The grain market is pushing costs higher for processors and livestock producers that we're feeling at the grocery store. Labour and not having enough people or the right people has been problematic in the agriculture sector for quite a long time. It just got worse with COVID. Lastly, transportation is now more costly, whether it's on water or land," Charlebois said.

Food production is an energy intensive economic sector, and food prices and transportation costs are closely connected within shared food economies that span the globe.

But at the local level too, food costs had already been rising slightly during the pandemic, though businesses have tried to hold them down. Now, they are playing "catch up" says Carmine Caccioppoli of Vincenzo's in Waterloo. He's anticipating increases of five to six per cent across the board.

"Like most businesses, we tried to be careful about price increases during the pandemic. The last thing you want to do when things are so fragile is to all of a sudden hit people with prices that were already creeping up," Caccioppoli said.

At a smaller but equally busy grocer, Ammar Market in Kitchener, co-owner Bashar Al-hendi says the store can probably hold down prices for a while.

"We're trying to not raise the price of meat right now. The increases for us are approximately 10 per cent to 15 per cent. We can maintain our current prices if our costs don't go higher," Al-hendi said.

If prices continue to rise over the next six months, he says that holding off on increases will be difficult. That, in turn, could be trying for any customers with less ability to absorb a big hit to their food bill.

Caudle's Catch in Kitchener supplies fish and seafood to both a large wholesale grocery sector and retail customers at their store and the farmers' markets. Like all other food suppliers, owner Ron Caudle expects prices to rise.

"Especially in the last few years, there are costs associated with fuel prices, and logistics costs are through the roof. We're impacted but not like other food sectors," he said.

"There will be slight price increases, especially for products that are processed, but we don't see 30 per cent increases, however."

Caudle says that Lake Ontario is an excellent source of local fish.

"With this industry, you can buy local seafood like walleye, perch and rainbow trout right in Ontario rather than fish from Chile or Norway with those transportation costs," he said. "Over 10 per cent of our product line is from Ontario and has lower transportation costs."

In fact, all three stores sell goods from Waterloo region and surrounding areas alongside products from around Canada and the world. Al-hendi says buying local can be less expensive, but expect price increases that are determined by packaging, containers, shipping costs and labour.

For instance, you can buy honey from Guelph at Ammar, but the packaging may have travelled from 10,000 kilometres away — and at a cost four or five times higher than before the pandemic.

"Local products could still be packaged in plastic, jars and small containers. Those containers are mostly imported from China. Everything coming from China has increased in price big time," Al-hendi said.

While buying local can help reduce food costs, Charlebois' research and polling about food inflation in September shows that Canadians are resorting to other cost-saving strategies: that includes the 41.2 per cent of Ontarians who say they are using coupons and e-coupons as well as digital or paper-based flyers more than they were 12 months ago.

"They're doing some price comparison and showing up at grocery stores more informed about food costs," said Charlebois, adding that there's more "food rescue" taking place.

"Interestingly, 36.5 per cent of Ontarians are buying discounted food products with best-before expiry dates within a few days more often than they were in 2020."