Food inflation continues to weigh on restaurants and consumers. We have watched food costs reach record-breaking levels in this last year and experts predict that it will continue beyond 2023, offering elevated numbers into 2025.
Current inflation has surpassed previously predicted numbers for 2023, reaching 10.6 per cent in February year over year, significantly above the expected five to seven per cent, and above the 5.2 per cent rate of overall inflation.
According to Sylvain Charlebois, professor of food and nutrition at Dalhousie University, significant increases are set to continue. He predicts the following inflation rates in 2025:
- Bakery (+35 per cent)
- Dairy (+40 per cent)
- Seafood (+24 per cent)
- Fruit (+29 per cent)
- Meat (+45 per cent)
- Vegetables (+ eight per cent)
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His research shows a 46 per cent increase in restaurant pricing in 2025, which may see more restaurants passing those costs onto consumers in order to survive.
The Royal Bank of Canada found that Canadians are continuing to spend money on travel, but have cut back on restaurants, with spending falling .6 per cent in the first quarter of this year (when adjusted for inflation). While this isn’t a drastic drop, according to RBC economist Carrie Freestone, she expects to see a larger decrease in discretionary spending when the Bank of Canada’s interest hikes take full effect.
Though there was a small dip in food costs in March (down to 9.7 per cent year over year), these numbers remain alarming for restaurants and consumers. And while experts like Mike Von Massow, economist at the University of Guelph, is optimistic that “… over the course of the summer, we might see some continued relief,” it’s important to note that this does not mean food inflation will cease, just that it may continue to rise at a slower rate.