Hoping for a break on your grocery bill next year? Don't bank on it, new report suggests

Anyone hoping for a break on sky-high grocery bills should brace themselves for a shock in 2023, as the typical family's food bill for the year is predicted to go up by more than $1,000.

That's one of the main takeaways of the 2023 Food Price Report, an annual publication by Canadian researchersthat looks at factors across the supply chain to attempt topredictwhat the cost of putting food on the table will be.

Last year, the report predicted that a typical family of fourwould would spend more than$14,000 to feed themselves for the year an increase of $966 from the previous year's level and the biggest one-year jump in the 12-year history of the report.

"Last year we were predicting prices to go up by as much as sevenper centand many, many claimed thatthosepredictions were alarmist," said Sylvain Charlebois, a professor of food distributionat Dalhousie University, who headed up the research team. "Yet here we are at 10per cent."

While Canada's overall inflation rate topped out at eight per cent this summer, food prices went well beyond that pace, clocking in at a 10.1 per cent annual gain as of the end of October.

It's why instead of the $14,767 annual grocery bill forecasta year ago, the typical yearly receiptcame in at$15,222.80 for 2022. That means last year's "alarmist" report wasactually undershooting how things would play out by more than $400.

Same issues persist

If those numbers are hard to swallow, prepare yourself for an upset stomach because all the factors that caused food bills to spike last year are expected to stick around into 2023. Charlebois and his fellow researchers say the typical grocery bill is on track to go up by another $1,065 from this year's record high level.

"There's absolutely no safe place at the grocery store," Charlebois said. "You can't really seek any sort of immunity against food inflation right now."

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The lead author of the 2023 Food Price Report, Sylvain Charlebois, says the high rate of food inflation will start to ease next year because he expects an economic downturn.

According to the report, the typical family of four, withtwo adults and two adolescent children, can expect to pay $16,288 to feed themselves next year. That's an increase of up to sevenper cent, but some categories will be more expensive than others.

Not all types of food will go up at the same pace. Bakery items, meat and dairy should be in line with the overall rate, while fruit may be a comparable bargain at just fiveper cent. Vegetables, meanwhile, are expected to go up byas much as eightper cent.

That's not what Julie Heyland wants to hear. A mother of three in Calgary, she says she couldn't believe how much her grocery bill ballooned this year, even as the quality andquantity of food she was getting for her money didn't seem to increase.

She cuts back where she can, but ultimately those ever higher food bills have meant she's had to change her family's diet. "Inorder to stay within our budget now we eat a lot less meat and I definitely shop a lot more sales and plan my menus around what's on sale," she told CBC News in an interview. "We'reeating a lot less meat and having more beans and a lot more rice and pasta during the week."

After a record-setting 2022, meat prices are not forecast to increase at a faster rate than food overall, but consumers should still brace themselves for prices to go up between five and seven per cent next year.

Jeffrey Bloom, a second-generation farmer who raises cattle on a farm in Turtleford, Sask., says he knows as much as anyone thatprices for meat have skyrocketed this year, but the amount he gets per pound has barely budged, even as his costs have doubled.

After the record-setting run up in grain prices, cattle feedthat might have once cost $300 a tonne is now going for $525, but he knows if he passes onthat costhe'll lose customers. "We're looking at inflation rates of 75 per cent, which is almost unheard of, and it really cuts into your bottom line," he told CBC News in an interview.

He recently sawan eight-pound prime rib selling at a meat counterfor $200. "Well, $25 a pound is almost unreasonable for people to pay [but] we're not seeing that kind of price ourselves, there's a lot of in-between stuff where the inflation happens, with trucking costs and people just trying to make a living."

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If he passed on his cost increases dollar for dollar he'd lose customers, so the challenge for food makers like him is "fighting the growing costs to sell the same products that everybody wants cheaper because they're paying for it over the counter."

While some of the factors that pushed up food prices have been lessened by Bank of Canada rate hikes aimed at reining in inflation, a lot of thefactors making food more expensive are global in nature, and beyond the central bank's influence.

The Russian invasion of Ukraine in February sent prices for everything from oil to grain to their highest levels in decades, for example.

The good news, Charlebois says, is that whileconsumers should brace for high prices to stick around at least into the early part of the year, he is expecting some of those increases to ease in the second half of the year as the global economic situation changes.

"We're not expecting prices to drop, but we are expecting the food and inflation rate to to stabilize somewhat," he said.

Supply chain bottlenecks are starting to move again, and the price of gasoline has fallen precipitously, which makes it cheaper to ship food across the country. On the other hand, a slowing economy could push down the loonie, which will hit grocery shoppers hardsince so much of what Canadians eat comes from outside the country, especially in the winter months.

But when you add up all the factors at play, Charlebois says the long-term outlook is better than the short-term one."Eventually all of these discounts up the food chain will catch up to consumers and we'll see that at the grocery store," he said.

Those discounts can't come fast enough for Nisha ShringiandVineet Saluja. The couple recently moved to Toronto from Burnaby, B.C., with their two children, and while they were expecting their cost of living to increase, the uptick in what it costs to feed themselves has taken their breath away.

"The costshaveincreased everywhere," Shringi said. "It's crazy."

Where they once might have enjoyed a restaurant meal out two or three times a month, and treat themselves to the odd fancy coffee at alocal cafe once in a while, they've completely eliminated luxurieslike that fromtheir budget, because they need every penny to keep food on the table.

"We have definitely cut down on things that are not necessary," she said. "We are just sticking to the essential items absolute basic necessities."

What can be done?

It sounds counterintuitive, but Charlebois says the spectre of recessionmight be what it takes to bring prices down, since consumers saying "no thanks" to expensive food items would bring prices down faster than anything else could.

"With an economic slowdown you will seefewer people willing to pay $30 for a steak and that really will help eventually."

In the meantime, his advice for anyone looking to slash their grocery bill is the same as it was last year: use foodapps to scourfor sales, clip coupons to be on the lookout for bargains, and always keep an eye out for price cutson food that's about to go past its best before date.

"You're going to have to work for your deals," he said. "You're going to have to work for those discounts."