Grocers put in tough spot with empty shelves, rising food prices hurting customers
Although the COVID-19 crisis is not completely to blame for the rising cost of food, the ongoing pandemic continues to cause several challenges that ultimately take a toll on consumers.
A family of four can expect to spend $14,767 on food this year, according to Canada’s Food Price Report, which predicts a five to seven per cent increase in overall food costs in 2022.
The report, released by Dalhousie University in collaboration with several Canadian universities, specified where increases are expected to be seen.
Agri-Food Lab Research Program Coordinator Janet Music said there are several factors behind food price inflation brought on by the pandemic; such as shipping delays, a labour crunch in various industries, and the most recent vaccine mandate for truck drivers crossing the border – which came into effect in mid-January.
“There’s also been reports of bottlenecks at ports so even if the food, like meat for example, is Canadian, the packaging that the meat comes in may be coming from abroad,” said Music. “Because bottlenecking has been taking place since 2020 in some cases, it hasn’t been cleared out. When we have this sort of shrinking of supply, it raises prices a bit.”
Canadian Federation of Independent Grocers (CFIG) Senior Vice President Gary Sands said the recent vaccine mandate for truckers came at a very “inopportune time”. He said although they understand the mandate from a public policy standpoint, it may have been beneficial to push the implementation date back by a few weeks.
“This is already having an impact on prices. When you have a shortage of product, you have a shortage of truckers, you have all these logistical hurdles and staffing shortages that pushes down supply, and when you have low supply of something it increases prices. Already, our members are telling us they’re seeing price increases of 20 and 30 per cent — and a couple in [western Canada] have told us 40 per cent increases in prices.”
Sands said aside from a shortage of truck drivers, the latest wave of the pandemic has caused significant labour shortages and absenteeism in various sectors from producers to retailers, affecting the timeliness of grocers receiving products.
“You’re going to see some bare shelves for some products but it’s not going to be permanent, it’s temporary,” said Sands. “You might have to look for other brands or you might have to do without the same quantities as you did before.”
Sands said delays are currently keeping bins of fresh fruits and vegetables from being fully stocked at stores. There has also been a shipping delay of cereals and some brands of soup. However, shortages and delays of specific brands or products could change in a few weeks.
Sarnia’s Davy Jones Quality Meats Owner Kyle Deloof said even though their products are mostly sourced locally, they’re not immune to the rising cost of meat.
“It’s hard to justify the price I have to put on some products. The margins have to be there in order for the business to survive,” said Deloof. “It starts with the cattle farmer and then to the producer, then it comes to us and we kind of take the brunt of it because we have to set the prices. We have certain margins that we have to hit so we have to be at these prices but we’re kind of at the mercy of the cattle farmers and the packers.”
Sarnia Produce Co-owner Dean Troiani also said it’s difficult to put extra financial strain on customers.
“We’ve never seen it this bad. In recent weeks it’s been just tremendous and it’s not just our industry, it’s other aspects [such as] dairy and meat but produce is being affected,” he said. “With a lot of our produce being imported this time of year, it has a major effect.”
Troiani said prices now are abnormal for this time of year, adding a lot of issues have to do with transportation.
“Freight charges are outrageous right now in our industry,” he said. “These prices are uncontrollable because of the freight issues that we’re facing right now.”
On a lighter note, Sands said supply chain issues will eventually resolve.
“I don’t want to minimize or diminish the seriousness of the issues we’re facing right now. For families dealing with the challenges that they have to, to see those kinds of increases in their food bills, that’s significant, that’s serious. At the same time though, I want to reassure Canadians that we still have a strong food supply chain in Canada. We will recover,” he said. “It’s important for people to understand that and not to panic. We can’t go back to what we saw in 2020, which is the panic buying. That kind of approach helps no one and it hurts everyone.”
Canada’s pace of inflation reached a record high in December 2021 since 1991. Statistics Canada’s Consumer Price Index showed a 4.8 per cent increase compared to 2020.
The annual review showed that the price of meat went up by 4.3 per cent, eggs went up 6.3 per cent, fresh fruit saw an increase of 2.6 per cent, and dairy products went up 2.8 per cent – in part because of the high cost of butter.
Music said at this time, there’s no indication that food inflation will slow down any time soon.
“Pandemics end and this one is going to end as well so that will provide some relief. There will be this kind of recalibration that’s being talked about to the labour force as people are shipped around jobs,” she said. “Presumably the shipping industry will backfill some of those vacancies that they have so that the free-flow of goods continues unabated.”
Aside from issues caused by COVID-19, Music said climate change has also caused food prices to inch upwards. Between drought-like conditions, wildfires, and flooding in parts of Canada this past year, it has been a difficult harvest. Music also pointed to situations abroad with flooding in Europe and China.
“Climate change affecting harvest is also affecting supply. Maybe it’s a direct supply crunch because the weather is too difficult to make harvests bountiful but some of our food actually eats food from abroad so when China is experiencing difficulties harvesting grains that maybe our food eats, then we’re going to see a crunch in supply as well.”
The food price report also indicated that consumers appear to be making healthier and environmentally-friendly changes overall. Music said if Canadians shop for what they need at the best price possible, it offers an opportunity to improve food waste.
“As a country we waste a lot of food, which is really impactful on greenhouse gas emissions. I think if we’re shopping and we pick up maybe fruits and vegetables that are not perfect or items that are a little bit closer to the end of life, we may end up actually getting some deals and impacting the amount of food that gets wasted.”
Music said in the long run, discussions will need to be held at a national level in regards to climate change and manufacturing so Canada can become more food secure and less reliant on other countries.
“In the winter months we’re really reliant on the United States for food and so is there an investment to be made in manufacturing?” she said. “Also, [with] climate change, what do we need to do as Canadians to make sure that harvests are bountiful and that farming in the warmer months reaches normal levels and is not impacted by adverse weather effects?”
In the meantime, the CFGI is calling on the provincial government to provide COVID-19 rapid test kits to ensure that absenteeism isn’t made worse by employees isolating when they don’t need to.