By Ian Holmes

Prices at grocery stores in Canada take a tumble

Sep 29, 2016 | 11:52 AM

NANAIMO — One of Canada’s top food experts says prices at grocery stores are falling and he expects Canadians will be paying less to put food on the table for at least the next few months.

Dr. Sylvain Charlebois, professor of food distribution and policy at Dalhousie University, says Statistics Canada data from August shows deflationary food prices in Canada for what he believes is the first time in nearly four years.

“Both fruits and vegetables are down on average five to eight per cent and so that’s quite dramatic in just a month and that’s due to our strong dollar,” says Charlebois.

Charlebois says prices have been tumbling at Canadian grocery stores over the last 30 to 60 days for a number of reasons, including a strong North American agriculture sector leading to extra inventory and a competitive grocery store market in Canada.

“The American dollar is much higher than before so Asian markets aren’t necessarily interested to buy North American products and so that’s why there’s lots of products remaining on our continent.”

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Charlebois says bread products are also down four to five per cent, while the prices of meats, seafood and dairy have remained stable for the most part.

Charlebois says while consumers benefit from cheaper groceries, there are victims further down the “food chain” as grocery giants react in light of their profit margins narrowing.

He says large grocery companies have put pressure on their food producers to drop their prices.

“It’s been tough for processing in Canada for the last little while and that pressure will likely continue.”

Charlebois points out that a few underlying factors in Statistics Canada data for August indicate how profiit margins for of grocery stores are impacted, noting a rise in sales in food from convenience stores, combined with a 1.5 per cent drop in sales from specialty stores.

Overall, Statistics Canada data shows that grocery sales have actually risen 1.6 per cent since last year.

Consumers can expect more favourable prices for groceries for at least the next few months, according to Charlebois.

“It’s very difficult to see how prices will go up by Christmas or even in the new year.”