Canadian food prices dropping for the first time in years, says expert

A food expert is noticing a big change at the grocery store checkout, something he hasn't seen for years

"Prices are actually dropping," Sylvain Charlebois said in an interview with CBC Radio's Saskatoon Morning.

Charlebois is a professor of food distribution at Dalhousie University.

The price drop, he said, comes thanks to a fairly simple recipe of economic factors. The food distribution landscape has become much more competitive, and the dollar is stronger than expected, Charlebois said. The result is a treat for consumers.

"We haven't seen prices drop in at least four or five years in Canada and that lasted maybe a couple of months and in this case it might be longer, we are expecting prices to continue to drop until the holidays or maybe after even."

The exception is for items like dairy, eggs and milk.Theyare supply-managed commodities wherethe farmers are given a set volume they are allowed to produce.

What sort of price drops is Charlebois seeing?

• Produce is down 5to 10 per cent.
• Meat prices are down 2to 3 per cent (chicken excluded).
• Bakery prices down about 5 per cent.

Adding to the mix, Charlebois said, is a glut of food products on the North American market as Asian countries, traditionally large buyers of U-S goods, look elsewhere as they struggle with the high dollar.

"There's lots of inventory," he said. "The North American Market is filled with a lot of food that's not moving."

Low prices delay new competitors

Also not moving, according to Charlebois, are some company's plans to expand. He said there had long been rumours of the arrival of a German grocer, and perhaps AmazonFresh, an online service.

"Because of what is happening with food prices I think we are less likely to see a new company coming into the Canadian market anytime soon because margins are going to be eroding a little bit."

While Canadians are enjoying a break at the grocery store, that savings will only be enjoyed around the dinner table at home.

According to Charlebois, prices at restaurants are up.