Charlebois said the aluminum tariffs United States President Donald Trump was going to enact played a slight role in the price of canned tomatoes increasing, but COVID-19 is the main reason.
“Typically, canned goods are sold as loss leaders,” he said, referring to products sold below cost to attract customers into a store.
He said there are fewer loss leaders since COVID-19 started, which is why canned goods in general have become more expensive.
“COVID has eliminated most of the discounting at the centre of the store,” he said, referring to the area where most packaged foods are found.
4. Potatoes (12 per cent)
Charlebois said he expected the price of potatoes to go down, because farmers had an oversupply of them.
“When it comes to demand elasticity, often in food, retailers are very afraid of reducing prices even though their own prices have dropped,” he said. “To increase prices again is very difficult, especially for a staple like potatoes.”
He said people will buy a 10-pound bag of potatoes at $6, and will walk away when grocery stores start pricing that bag at $9.
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“They try not to play around too much with prices,” he said.
5. Processed cheese (11 per cent)?
Charlebois said dairy is an interesting field to assess, because Canada’s supply management system should stabilize prices.
“A bunch of things could have played out,” he said. “Labour costs, new protocols and less competition, maybe.”
He said the prices of processed food should fluctuate more, because these products are further away from farm gate prices. The United States-Mexico-Canada Agreement changed the supply management system, but it had the opposite effect of what was intended.
“We were expecting prices to soften a little, not increase,” he said.
6. Oranges (9.6 per cent)
7. Stewing beef? (8.2 per cent)??
Charlebois said beef has been problematic all year.
“Ranchers actually did make some good money at the end of 2019,” he said. “As the beef went through the supply chain, wholesalers charged more and it caught up to us as COVID started.”
He said beef prices experience a fluctuation every five to six years. Beef prices are cyclical, and a price increase was overdue.
“Beef prices were up 26 per cent from January to May, but things have calmed down now,” he said.
8. Macaroni (8 per cent)?
9. Apples (6.5 per cent)
10. Canned soup (6.1 per cent)?
11. Bacon (5.7 per cent)
12. Flour (5.6 per cent)??
Charlebois said he expected flour to go up in price more because of the high demand for it.
“Flour, I believe, is 39 per cent higher than it was in 2000,” he said. “This year, we saw a bit of a bump, but flour has always been a non-story for the longest time.”
He said there has been higher demand for flour because more people are eating at home and taking up cooking and baking as hobbies.
“This year, all of the things you need to cook became in fashion,” he said.