Skip to main content
Open this photo in gallery:

While Canadian households are spending roughly the same at grocery stores, their money isn't buying as much as it did before the pandemic due to inflation.Graham Hughes/The Canadian Press

In December, grocery stores in Canada sold about $9.3-billion of goods – not much more than two years earlier. But during that time, grocery prices have soared by 17.4 per cent and counting, much to the chagrin of consumers.

After adjustments for inflation, sales volumes at grocery stores have tumbled by 11.5 per cent since the end of 2020, according to recently published figures from Statistics Canada. Put another way, households are spending roughly the same at supermarkets, but because of inflation, are getting far less bang for their buck.

There are, however, other factors at play. For instance, people are diverting more of their dollars to restaurants after COVID-19 restrictions were loosened. Royal Bank of Canada says its cardholders are spending about 30 per cent more at restaurants, compared with before the pandemic. “There’s still pent-up demand for restaurants, despite higher prices,” RBC economist Carrie Freestone said.

Grocery executives have also said that shoppers are trading down to discount brands, or are switching to cheaper supermarket chains altogether, for price relief.

Loblaw says grocery prices to keep rising, as grocer reports profit increase amid inflation

General merchandise stores – which include the likes of Walmart Inc. and Costco Wholesale Corp. – are drawing more interest from grocery shoppers, Statscan said. In the third quarter of 2022, such retailers sold $8.2-billion of food, an increase of 20 per cent from a year earlier. Food sales at grocery stores rose by 5.1 per cent in that time.

Still, there is another grim possibility lurking in the data: Some people are simply buying less food or are skipping meals to cope with inflation. A study from Britain’s Office for National Statistics, published last year, found that the lowest available prices for some items had experienced eye-watering gains. Over the 12 months to September, 2022, the cheapest vegetable oil rose 65 per cent in price, pasta by 60 per cent and tea by 46 per cent.

Shoppers are left with a tough choice: Pay more or buy less.

Decoder is a weekly feature that unpacks an important economic chart.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe