by webSaver
January 20, 2025
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The Agri-Food Analytics Lab at Dalhousie University, directed by Dr. Sylvain Charlebois, and in conjunction with the University of Guelph, the University of British Columbia and the University of Saskatchewan recently released their ‘CANADA’S FOOD PRICE REPORT 2025’, its highly anticipated 15th edition.
In the report the researchers are forecasting a 3% to 5% increase in Canadian food prices in 2025. This is a slight increase from the 2.5% to 4.5% increase they forecast for 2024, the rate in fact came in at 2.8%. The report utilizes a comprehensive methodology that encompasses macroeconomic factors, as well as sectoral and domestic elements. Geopolitical Risks, Input Costs, Climate Change, Energy Costs, Inflation and Currencies are just some of the factors taken into account.
The report also provides food price forecasts by food category and province. For 2025 the largest price increases are expected to be in the Meats category, at 4% to 6%, followed by Vegetables and Restaurants at 3% to 5%. And Bakery and Dairy at 2% to 4%. Regionally Quebec and the Maritime provinces are forecast to experience ‘Above Average price increases’, while Ontario and all other provinces are expected to experience ‘Below Average price increases’.
For those seeking the complete ‘Canada’s Food Price Report 2025’ click here.
The report should be taken seriously as over time it has proven to be fairly statistically accurate, but more importantly it is insightful at identifying the trends that are driving the increases in food prices as well as the forces affecting Canadian grocery consumers that ultimately have to pay these prices.
As a complement to this report we also bring notice to a recent ‘Food Inflation Report – Jan 2025’ by Loblaws, in which they put a damper on the excitement felt by Canadian consumers recently when Statistics Canada reported that food inflation had slowed in December 2024, and that for the first time in a long time its increase at 1.9%, was about the same as the overall rate of inflation at 1.8%.
From their privileged position at the front lines of the Canadian grocery industry Loblaws is predicting that food inflation will exceed the overall CPI and remain high due to a number of factors including: A weak Canadian Dollar, Supply Chain Issues, Supplier Cost Increases and Rising Production Costs. These trends have already manifested themselves in the prices of Beef, Coffee and Chocolate all of which are at all-time highs.
For those seeking the complete ‘Loblaws Food Inflation Report Jan 2025’ click here.
Regardless of whether or not Canadian consumers trust the credibility of Loblaws as an objective commentator on food prices and inflation, and clearly as the Loblaws Boycott of May 2024 illustrated most do not, the fact is the issues they raise are real and have the potential to worsen throughout the year.
Has the Loonie bottomed? Will there be more strikes in the supply chain? Will fires in California cause a hike in vegetable prices? Will the shrinking supply of Coffee and Cocoa lead to an explosion in prices? Time will tell.
The Canadian consumer is under severe financial strain
The Canadian consumer is under financial stress and having difficulty putting food on the table. The recent spike in inflation and interest rates seriously impacted the cost of housing for Canadians, which remains the major expense for most households and affects the consumption of everything else. And now the weakening Canadian dollar is having the effect of making all imported food products more expensive.
In the most recent MNP Consumer Debt Index Poll 50 per cent of those polled believe they’re $200 or less away from being unable to pay all their bills and debt obligations in a month, and are essentially living ‘bill to bill’.
The Canadian consumer is putting price ahead of nutrition when making food buying choices and they have become more price conscious than ever before. As noted in the ‘Canada’s Food Report 2025 ‘: “Our relationship with food is changing as we pay more attention to food prices than ever before, shifting our behaviours around purchasing and consumption”.
Other concerning conclusions from the report on this topic:
- Nearly half of Canadians now consider affordability as the primary factor when choosing food.
- Despite more stable food prices, food insecurity levels and food bank usage in Canada are at an all-time high.
Implications for grocery food brands of these challenging trends
Canadian consumers have never been as active and motivated to find ways to save money on their groceries as they are today, this dynamic is not likely to change in the short term. Canadian consumers now and for the foreseeable future are looking at grocery spending as an area in which they must look for and find savings.
Brands can respond to this reality by seeing it as an opportunity to engage with their consumers in ways that they will appreciate and embrace, by running active promotional campaigns with online coupons and cashback offers that help the Brands acquire new consumers, increase engagement with existing consumers, and build long term consumer relationships.
Alternatively, they can choose not to engage with their consumers at this time when they need it most and potentially lose them to competing brands, generic brands, store brands or replacement categories. All of these actions are taking place daily at every grocery store across Canada as consumers are making the hard choices on how they will save money on their groceries.
At webSaver we believe that Brands should go on the offensive and engage with their consumers with fun, exciting and interesting promotions built around the power of online coupons and cashback offers to drive purchases and engagement. This will allow them to remain top of mind for the consumer, maintain market share and grow their Brands.
Work with the experts at webSaver and see how online coupons and cashback offers can be a key contributor to attaining your strategic marketing objectives in 2025.
With over 10 years leading the Canadian online coupons marketplace and 150 Million coupon issued we know coupons. We’ve worked with 90% of Canada’s leading consumer packaged goods brands providing them with the online coupons and cashback offer solutions that generate real value for their business. Whether your strategic objective is customer acquisition, customer lift (Increased transaction size and frequency) or customer retention webSaver can help.