Excluding gasoline, headline inflation would have been 4.0% in June, following a 4.4% increase in May.
Canadians continued to see elevated grocery prices (+9.1%) and mortgage interest costs (+30.1%) in June, with those indexes contributing the most to the headline CPI increase.
The all-items excluding food index rose 1.7% and the all-items excluding mortgage interest cost index rose 2.0%.
https://www150.statcan.gc.ca/n1/daily-quotidien/230718/dq230718a-eng.htm?HPA=1
Boy that grocery inflation sure is sticky. Almost like the cause is located within the industry itself and not a factor being forced upon it externally.
It’s almost like food is something everyone needs and has to buy no matter the cost, so there’s no incentive for grocery stores to reduce their profit margins.
Competition/survival is the only incentive to reduce profit margins. Co-ops have no profit incentive.
This, seemingly inevitable, position was a long term strategy from consolidated major players with a history of collision.
Immediate steps you can take to help:
-
If there is a co-op grocery option near you, join it. Second best is a local grocer. (Unpacking the supply chains is another beast…)
-
Join a CSA / buy direct from farms. Avoid imported foods to the extent possible.
-
Write you MP and MPP to support the removal of taxes on seeds and seedlings for food products, a tax that benifts major players and hurts non-profit growers.
-
Grow some food, share it with your friends/family. Either on your own property or, for us condoites, community gardens.
Join a CSA / buy direct from farms.
Sounds good but I can get all my groceries from Walmart and have next day delivery for like $7. I would love to ditch Walmart, but not having a car makes me value the logistics a lot.
I suspect the prices will, ironically, allow new players to enter the market and undercut.
I have farmers in my family. They talk about the pieces they got last year (high) versus this year (much lower). In fact, it’s leading to some unethical optimization problems…
Crop insurance payouts are based on last year’s price. For some farmers, they would earn more this year if they sabotaged their own crops and took the insurance payout based on last year’s prices.
My family rejects it, cause ethics is a thing. But I suspect some farmers will just see dollars and will artificially constrain their supply. And the rest of the farmers will have their insurance rates increase.
The problem with groceries is that the raw product is largely bought on futures contracts, so you’re paying last year’s price. Last year was inflated due to fertilizer issues and general concern around the Ukraine conflict. The raw product price is now down ~50% since last year, but it will take until next year to see that show up in the store.
