The COVID-19 crisis will change how Canadian consumers shop for groceries more significantly than the prices they pay, according to an updated Food Price Report.
The updated report released March 31 maintains that overall food prices will increase by 2 to 4 per cent over 2020, unchanged from earlier forecasts. The most significant change will be in how those purchases are made and the delivery costs that may result.
The public pleas to minimize non-essential excursions, combined with rising fear of visiting grocery stores, has lead to a dramatic uptick in online shopping. The report, created by researchers at Dalhousie University and the University of Guelph, referenced recent surveys that show that “76% of Canadians now consider a visit to the grocery store as an inherent risk to their health” and that “9 per cent of Canadians who have never ordered food online are now doing so”, though the specific surveys citing those figures are not disclosed.
“The food retail and processing sectors are under extreme pressure to change food safety practices, to make customers feel safer,” the report concluded. “Online purchases and delivery will likely increase the cost of food over time.” It expects grocery stores to realign resources to cope with the growth of online ordering, and notes that “delivery costs will be mostly downloaded to consumers” and that customers will expect to wait “3 to 7 days” for their online orders to be delivered.
The report also noted that falling oil prices will reduce transportation costs, and the continued decline of the Canadian dollar will increase the costs of imported foods. But overall, the forecast for most of the eight food groups is unchanged from the original forecasts published in December. The forecast price increases for baked goods and vegetables have been adjusted higher, and the price increase for restaurant food has been adjusted lower. In aggregate, food prices are still expected to increase by 2 to 4 per cent.
The report noted that consumers should expect grocers to continue rationing high-demand items. Social media shaming should also limit price gouging, but discount “flyers” will also decrease. Higher labour costs as employees undertake new sanitation tasks will also affect grocers.
More information about the original Food Price Report is available here.