Canadian households are continuing to pay more at grocery stores as food inflation climbed four per cent in September compared with the same month last year.<\/p>\n
Annual price hikes at the grocery store have largely trended higher since a recent low in April 2024, Statistics Canada said on Tuesday. Food inflation in August was up 3.5 per cent from a year ago.<\/p>\n
The federal government ended 25 per cent counter-tariffs, which contributed to higher costs for food imports, in September as the two countries continue to negotiate on trade. <\/p>\n
CIBC senior economist Andrew Grantham said high food inflation came as a surprise, given retaliatory tariffs on the U.S. were dropped in September.<\/p>\n
\u201cWe\u2019d actually expected that with the retaliatory tariffs being reduced, that maybe we could get a little bit of an ease in food price inflation,\u201d Grantham said. <\/p>\n
Michael von Massow, food economist at the University of Guelph, said the removal of counter-tariffs is having a varied impact on grocery prices.<\/p>\n
For example, the price of oranges came down in September because the fruit moved faster through the supply chain. However, coffee is still seeing higher prices from tariffs because of its long shelf life.<\/p>\n
\u201cIt comes in, it gets roasted, it gets packaged, it sits on a store shelf, and then it\u2019s less perishable, so it will take more time for that product that was tariffed to move through the system,\u201d von Massow said.<\/p>\n
Coffee prices have also remained elevated globally as climate change and dry weather impact major coffee-producing countries. <\/p>\n
Short supplies of beef and coffee are persistent factors fuelling higher prices, StatCan said.<\/p>\n
Von Massow said beef prices added to food inflation as dry weather in the west made it harder for ranchers to carry cattle over the winter.<\/p>\n
\u201cCows are the factory of beef production and if we don\u2019t have as many cows, it takes a while,\u201d he said.<\/p>\n
Fresh vegetable prices were up 1.9 per cent annually in September after a decline in August, and sugar and confectionary costs also accelerated to an increase of 9.2 per cent compared to 5.8 per cent the previous month, the agency said. <\/p>\n
\u201cWhen it comes to grocery prices, we have seen that there are environmental factors that play into some of those, particularly fresh fruits, vegetables,\u201d said Grantham. He suspected a weak loonie also contributed to higher grocery bills. <\/p>\n
Annual inflation accelerated to 2.4 per cent last month, StatCan said. That\u2019s a jump of half a percentage point from 1.9 per cent in August.<\/p>\n
RBC Capital Markets analyst Irene Nattel said food inflation reached a 21-month high in September, and was up 27.8 per cent on a cumulative five-year basis.<\/p>\n
She said food prices are likely to remain elevated for the rest of the year as grocers look for local suppliers and U.S. alternatives amid ongoing tariff tensions and relatively strong Buy Canadian sentiments. <\/p>\n
Grocers swiftly pivoted to local suppliers earlier this year as the Buy Canadian movement gained steam in response to the U.S. tariff war. <\/p>\n
Nattel said consumers are also expected to continue their hunt for value.<\/p>\n
\u201cAgainst this backdrop, we expect ongoing consumer trade-down to discount banners\/channels and private label products with sustained promotional\/competitive intensity,\u201d she wrote.<\/p>\n
Major grocers \u2014 Loblaw, Empire and Metro \u2014 reported their internal inflation measures remained lower than or generally in line with the fixed basket of StatCan\u2019s inflation metrics during their second quarters.<\/p>\n
Nattel said that\u2019s \u201cindicative of consumer trade-down to discount and private label to moderate impact of higher food prices.\u201d<\/p>\n
She expects a similar outcome from the grocers during the upcoming earnings.<\/p>\n
This report by The Canadian Press was first published Oct. 21, 2025.<\/p>\n
Ritika Dubey, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"Canadian households are continuing to pay more at grocery stores as food inflation climbed four per cent in…\n","protected":false},"author":2,"featured_media":230412,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-230411","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/230411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=230411"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/230411\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/230412"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=230411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=230411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=230411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}