Eating out and La Nina to raise Canadian food spending in 2018

The average Canadian family of four will spend $348 more on food in 2018, according to an annual food price report released on Wednesday.

Published by Dalhousie University and the University of Guelph, the 8th edition of “Canada’s Food Price Report” forecasts higher restaurant spending and La Nina will drive food costs higher next year, with a family of four spending a total of $11,948.

The price of vegetables is expected to rise by 4%-6% due to La Nina and below-average precipitation in the southern U.S., explains Sylvain Charlebois, lead author and dean of the Faculty of Management at Dalhousie University.

Canadians will also spend more than ever before on restaurants and on ready-to-eat meals, with almost 30 percent of food budgets going to food service, says the report.

“We predict that Canadian consumers will eat out more frequently in 2018, and that will come at a cost,” notes Charlebois.

Overall food prices are expected to rise 1%–3% in 2018, which is lower than last year’s forecast, but higher than what transpired in 2017 due to major discounting and competition between players such as Walmart, Costco and Amazon.

Here’s how the predicted 2018 price increases break down by food type:

  • Restaurants 4% – 6%
  • Dairy 0% – 2%
  • Fruits 1% – 3%
  • Bakery 0% – 2%
  • Meats 0% – 2%
  • Vegetables 4% – 6%
  • Seafood 0% – 2%
  • Food 1% – 3%

Provincially, Ontario and Alberta see more competitive marketplaces in 2018, putting pressure on prices. The report also predicts higher minimum wages will not have an impact on food prices, since most companies are “finding innovative ways to cut operating and labour costs” to protect margins.

(Source: Canada’s Food Price Report 2018)

As for food trends in 2018, the anticipated changes to Canada’s Food Guide will encourage plant-based diets and avoidance of processed foods, says Catherine Mah, co-author of Canada’s Food Price Report and an associate professor in the Faculty of Health at Dalhousie University.

“The new food guide will promote taking time to eat,” says Mah. “However, consumers have tough decisions to make when budgeting their time as well as their grocery shopping.”

You can read the entire 2018 food price report here.

Related: Surge in Food Prices Expected in 2017