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The cost of eating Part I: Groceries

The cost of eating Part I: Groceries

Posted on: 9/25/2017 | Author: ATB Financial's Economics + Research Team

Albertans may disagree on many things, but one thing unites many of us: we love to complain about food prices. It turns out that we may be justified. Over the last 10 years, food prices have increased at a much faster rate than most other things we buy.

The orange line in the graph below shows the trend in prices of groceries purchased from stores, while the blue line shows the all-items consumer price index. With the index of prices in August 2007 set at 100, the index for groceries was at 127.0 last month—or an increase of 27 per cent. The all-items index had risen by only 15 per cent.

In 2016, shoppers got a bit of a reprieve when certain food prices were falling in grocery stores. The index fell from a value of 130.5 in January of 2016 to a low of 121.6 in October, a drop of eight per cent. Much of this was due to falling prices for vegetables (which plunged 20 per cent); prices also fell for meat, fruit, dairy and baked goods.

More recently, grocery prices are once again on the rise. From the low set last October, prices have jumped about four per cent. Overall food prices haven’t yet surpassed the record set at the beginning of 2016—and in fact, they could start falling again. The rapid rise in the Canadian dollar over the last several months should help to lower the prices of imported fruits and vegetables.

Tomorrow The Owl will explore the trends in prices for food purchased in restaurants.

Trends in consumer prices, graph?

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