By Tom Parkin
Pump prices rise 21.7 per cent, food prices up 4.8 per cent, all the rest were up 0.0 per cent.
In March, the Consumers Price Index — excluding food and fuel — rose by 0.0 per cent from the month before, according to Statistics Canada data released Monday.
But with food and fuel included, the Consumers Price Index rose an annualized 2.4 per cent in March.
Food prices up twice as fast in past 12 months
For nine of the past twelve months, food prices have run ahead of the CPI excluding food and energy. Over the past 12 months, food inflation, at 3.9 per cent, has run twice as fast as price other than food and energy, which are up 1.9 per cent.
Food retail is highly concentrated in Canada with about 80 per cent of food sold in stores owned by Loblaw (Weston family), Sobeys (Sobey family), Metro, Walmart and Costco.
Various governments are now investigating options to address persistent food inflation. Earlier this year, the Manitoba government launched an investigation into the causes of inflation and possible solutions. In March, the City of Toronto was directed by Mayor Chow and council to investigate public grocery stores to deliver lower prices, a move that last week was encouraged by a city councillor in Ottawa.
Also last week, Walmart announced all its U.S. stores will switch to digital price tags this year, enabling the company to instantly reset prices nation-wide to take advantage of demand shifts, emergencies or supply constraints.
In contrast to the the Walmart news, the Manitoba Kinew government last month introduced legislation to ban “predatory pricing,” a move encouraged for Ontario by Opposition leader Marit Stiles and federally by new NDP leader Avi Lewis. Both the Ford and Carney governments quickly ruled out joining Manitoba’s ban.
What is predatory pricing ?
From a CBC News report: Manitoba is targeting grocers that make customers pay different prices for the same items online, based on evidence of it happening in other jurisdictions.
New Democrats announced in December that they would begin cracking down on what’s known as differential or predatory pricing. That is when retailers charge different amounts for the same products based on the timing of customer purchases, where they live or other personal data.
The NDP introduced Bill 49, the Business Practices Amendment Act, last week but made it available for the first time Tuesday.
“This bill makes it clear that that practice is not acceptable in Manitoba,” Finance Minister Adrien Sala said Tuesday.
“You shouldn’t pay more for groceries just because of who you are, where you live or how you shop. We’re strengthening consumer protection so that prices are fair, transparent and consistent.”
The proposed legislation would render the use of “personalized algorithmic pricing,” both online or in store, an unfair business practice.
In theory, any retailer caught using consumer purchase history, socio-economic status or income data, credit or medical history, or customer geographic location to get a buck or two more out of an online shopper could face penalties.
The consumer protection office will investigate any complaints. A person found at fault could be fined up to $100,000 or an imprisonment of up to 12 months, while a corporation could be fined up to $300,000 for a first offence.
The minister was asked what evidence government has of differential pricing happening in Manitoba. He said the fact it’s been documented in other jurisdictions is enough to warrant getting ahead of the problem.
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Totally agree with Michael.
The markup on groceries is very low, perhaps 2%. One has to take into account that groceries now come from all parts of the world.
Transportation charges make up a large part of grocery prices.
When I was growing up we didn’t have strawberries or blueberries or avocados or pineapple in the winter. Our vegetables consisted of squash, squash and more squash.
The grocery stores now provide vegetables and fruits that provide these products year round.
Everything comes at a cost.
This argument is getting old, blame the grocery chain. Co-ops are have been around for a century, how are customer owned and subject to the same food inflation prices as larger chains – how do you explain that? Look at Costco’s financial statements, it makes its money from selling memberships, net profit from groceries and merchandise is very very low. Maybe we need to look at the marketing boards in Canada, why is has milk increased from $4.49 to well over $6 for 4L in 2 years? What about the impact of the industrial carbon tax and clean fuel standard tax? I’m waiting for some smart liberal MP to say food inflation is a result of higher fuel costs caused by the war in Iran, but these two fuel taxes do not cause food inflation -maybe it already happened and I just missed it.
The food supply chain is labour intensive, we’ve seen big increases in minimum wage as a result of inflationary government spending.
And of course everyone wants to forget the Nobel Prize research of Milton Friedman, government deficit spending is the primary driver of inflation. Just look at the low inflation in Switzerland that does not run deficits and subject to all the same global pressures.
I get it, some Canadians seem to fall for the lazy boogie man theory, big grocery chains bad, orange man bad, etc., the math and economics require a little more thinking.
Editor’s note: So does the monopolistic role the supermarkets play.