I’ve heard fellow students suggesting a dramatic increase in grocery prices as of late, and they’re right to believe that.
Just how much have prices increased? According to Statistics Canada, the cost of meat increased by 9.5 per cent last year. The cost of dairy products increased by 5.1 per cent, and the costs of fruit and seafood increased by 2.5 per cent. The only good news is that vegetable cost decreased by 2.1% per cent, due to a strong Canadian dollar and better- than- expected harvests. This is impactful for students living on a modest budget.
What’s ahead for 2022 in terms of costs? Unfortunately, prices will likely continue to increase with the average price of food items predicted to rise by five to seven per cent, according to Canada’s Food Price Report.
This means that the average Canadian consumer aged 19 to 30 years old could pay between $226.21 to $259.79 more in 2022 than in 2021 for the same food, according to data in the report. Dalhousie students may catch a break, however, as Canada’s Food Price Report forecasts Nova Scotia experiencing a food price increase below the national average this year.
Why are prices increasing?
What is being experienced here is inflation. Put simply, it’s a decrease in the purchasing power of our dollar, or a general increase in the prices of goods and services.
According to Canada’s Food report, one macro level force driving the inflation of food is COVID-19. COVID-19 has created labour market challenges and supply chain issues due to self-isolation and lockdown measures.
The effects of climate change, rising oil prices, global trade, currency exchange rates and geopolitics are also driving up the cost of food in their own respective ways. Above average levels of inflation in the economy, which impact food prices, are also currently being driven by low interest rates and large federal government budget deficits.
Rising costs, stagnant wages
As many students live on a fixed income, or are low income, they spend a large portion of earnings on basic needs. As the cost of these necessities rise, students are experiencing a hard time trying to maintain quality of life.
Further compounding this challenge is that, according to the Conference Board of Canada, wages and salaries have not kept pace with the increase in prices. Inevitably, students are looking for ways to cut costs. Credit Counseling Services of Canada suggests that students change their diets. In fact, almost 50% of Canadians changed their meat purchasing habits in response to its price increase last year.
With products like meat and dairy having large increases in 2021 and being set to further increase in 2022, many consumers are moving towards adopting a diet with relatively more fruit, vegetables and seafood. These products are projected to have smaller price increases.
Saving on student groceries
As students, we could attempt to take steps to reduce food waste to save. We could also take advantage of sales and avoid buying ingredients at peak cost.
Many grocery stores offer significant discounts on products that have approaching expiration dates or minor imperfections. If you are going to be using the product relatively soon, I have found this to be a great offer to take advantage of.
Students can also continue to rely on student discounts offered on certain days of the week by many large grocery chains like Sobeys and Atlantic Superstore. I have found the 10 per cent student discount that Sobeys offers on Tuesdays to be a simple and direct way to reduce costs, compared to convoluted and indirect loyalty programs like Air Miles or PC points.
While grocery costs are rising, it’s still the most economical option for students compared to eating out. The cost of groceries is predicted to rise less than the cost of restaurant meals due to labour market challenges.
According to a report by TD bank, the restaurant industry is increasing the cost of meals due to the rising cost of labour. I still believe it’s critical that we support local businesses. Perhaps when students eat-out, we could choose more local restaurants instead of big chains.
Can we stop the climb?
Whether inflation continues for food products depends on many variables. Some major questions to consider are: Will COVID-19 and associated supply chain issues recede? What’s the impact of increasing adverse effects from climate change? What impact does a rising carbon tax and potentially rising oil price have on transportation costs?
As the answers to these questions become clearer, so will the anticipated changes in food prices in the future.
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