Supply chain crunch, higher prices affecting Winnipeg specialty grocery stores

Chickpeas, flour and dairy products are staples at Blady Middle Eastern, but theyare going up in price forgrocery shoppers.

The Winnipeg specialty store is far fromthe only grocery store in the provincedealing with a surge in prices stemmingfrom a food supply shortage in Canada, and the reasons for this aremore complicated than one might think.

The hardest part about priceincreases is relaying that information to consumers, says Issa Qandeel, owner of the Blady market.

He acknowledges that about 70 to 80 per cent of his customers understandthe store is caught between a rock and a hard place. Grocery stores simply haveto bump up prices to reflect the increased costs of raw materials and shipping costs that are passed on to them from distributors and shipping organizations.

"Shipping internationally has gone up all over the world, not just in Canada. The farther you go away from Canada, the more expensive you pay for shipping," Qandeel said Wednesday.

His store brings in a bevy of products from the Middle East and surrounding areas, all of which are obtained through suppliers and distributors.

Qandeel said he started to notice price increases on some products last June, but notes there has been a noticeable increase in coststhis month.

"We used to, for example, add fiveto sevenper centon the product itself for shipping but right now we have to add around 10 to 12 per cent on the shipping costs on each product that we get from Canada not internationally," Qandeel said.

Big cost jumps

Certain products have seen a bigger increase than others, with charcoal from Indonesia and Vietnamjumping in cost by 30 to 40 per cent.

Since opening the market in October 2018, Qandeel says flour, chickpeas and dairy products have also gone up.

"If it's not double, then at least 50 per cent [more] than what we used to buy it for," Qandeel said.

He added that the Canadian Dairy Commission has raised prices by about12 per cent, while flour has almost doubled in price since the store opened. Chickpea prices haveonly recently gone up.

"We can't basically just stop an item because theprice has increased on this item. We can still bring it but we have to notify people before thatthis item is going to be a little higher in price," Qandeel said.

There are some items Qandeel is temporarily not bringing in due to increased costs: rumi cheese from Egypt and Indomie noodles from Indonesia. The former has seen a jump of approximately 75 per cent in cost, says Qandeel.

He's not the only small grocery store owner who has been forced to increasehis costs.

Yusuf Abdulrehman opened the province's first halal meat shopHalal Meat Centre andSpecialty Foods more than 35 years ago. Like Qandeel, his store specializes in foods from the Middle East and surrounding regions.

Abdulrehman says if he places an order for 10 products, one or two of those items aren't usually available. This has become normal of late.

The products he is able to bring in are more costly.

"Nobody has a choice. I don't have a choice either," Abdulrehman said. "If I don't increase the price, then I don't make the money."

But he isn't afraid to lower his cost if it means a sale, noting that price juggling has become more important than ever.

Whether it's COVID-19, shipping backlogs,the convoy of truckers on their way to Ottawa to protest vaccine mandates or more, Abdulrehmansays the Everyman can't control the manyissues that are contributing to higher costs from shippers and suppliers.

"We just have to be patient. That's it," he said.

Supply chain unpredictable

Barry Prentice isn't sure exactly how long the supply chain issuesand thus increased grocery store prices will last.

Prentice, a professor of supply chain management at the University of Manitoba, says the increases are directly tied to issues that started to arise last year.

Drought conditions contributed to a drop in grain production, whichresulted in a feed shortage affecting cattle herds.

Delays resulting from these issues may not be felt immediately, says Prentice, "but they will eventually come back to haunt us."

Prentice says the supply chain is unpredictable and whilethe shipping backlog is slowly alleviating itself, he doesn't think the supply chain crunch will be a long-term concern.

"All of a sudden you've got not enough ships, a lot of goods and then of course at the other end trying to unload them," he said."It's a huge tie-up so that has forced up the prices and because people want these goods there's just a bidding war to get available space."

WATCH | Shopkeepers speak out on supply chain woes:

Prices and competition rise for overseas goods

3 years ago

Duration 2:34

Supply chain crunch, higher prices affecting Winnipeg specialty grocery stores