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Spring 2024 outlook on grocery meals inflation for Canada
The outlook for meals and beverage producers this yr is extra constructive than final yr, FCC mentioned, although some sectors nonetheless face headwinds amid elevated rates of interest and tighter family budgets. “Nevertheless, inhabitants development and stabilizing—in some instances, falling—enter prices are offering optimism for margin enchancment for 2024.”
The group’s annual meals and beverage report affords up forecasts for client spending, in addition to particular meals objects equivalent to sugar and flour.
What’s Canada’s inflation on meals?
Canada’s annual inflation charge was 2.8% in February, and grocery prices had been one of many predominant components pushing it decrease. Grocery inflation was 2.4% that month, down from 3.4% in January, as the price of many objects declined yr over yr. Nevertheless, slowing inflation doesn’t imply costs total are dropping. Statistics Canada famous in its latest inflation report that between February 2021 and February 2024, grocery costs rose 21.6%.
How are Canadians coping with rising meals costs?
As they grapple with increased costs, not simply on meals however on shelter and different each day prices, Canadians have been attempting to chop again their spending on meals and drinks, FCC mentioned. They’ve been shopping for extra objects on sale, gravitating towards cheaper manufacturers, shopping for extra canned and frozen meals, purchasing extra at low cost retailers and easily shopping for much less meals.
“Many shoppers say the impression of excessive rates of interest are simply starting to have an effect on their spending,” FCC mentioned.
As buyers have turn into extra value delicate, FCC mentioned processors have been responding by modifying bundle sizing and substituting cheaper inputs.
Canadians have additionally been reducing again on alcohol, the report mentioned. It forecasts a decline in alcohol gross sales and manufacturing volumes this yr.
Will meals costs go down?
The report mentioned some meals merchandise are anticipated to go down in value this yr, equivalent to flour, after a pointy enhance over the past couple of years. This may translate to decrease bakery and tortilla manufacturing promoting costs by the top of the yr.
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