Despite inflation, StatCan data suggests Islanders spending less on groceries

Despite inflation driving up food prices around the world, P.E.I. residents have found a way to reduce their overall grocery bills, according to a report from Statistics Canada.

The report looking at distributions of household economic accounts, income, consumption and saving examines where Canadians are earning their money and where they are spending it. It suggests that in the face of inflation at the grocery store, Islanders changed their buying habits.

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While the annual inflation rate for groceries in 2022 was 10.9 per cent, household spending on groceries was down 1.2 per cent.

It's a trend that Crystal Hardy, general manager of Riverview Country Market, started to notice toward the end of last year.

"They're getting more back to basics," said Hardy. "They're not purchasing so much of the processed foods. Those are the things that have gone up quite a bit in price, versus the non-processed foods like produce."

And while produce prices have also been rising, they are not up as much, and starting from scratch makes for cheaper meals, she said.

Hardy said her customers are telling her the adjustment is not all bad.

"I hear lots of excitement about the meals that they're making at home with fresh produce, versus [frozen] lasagna," she said.

Hardy said she is watching the trend continue this summer, particularly as more local produce becomes available.

Food inflation could persist

Overall annual inflation has fallen below three per cent on P.E.I. in recent months, but inflation on groceries has stayed high. The rate for July was 8.4 per cent, for example, meaning a typical basket of goods cost 8.4 per cent more than it had a year earlier.

University of Prince Edward Island economist George Jia said there is no single reason why food prices have continued to climb.

"A lot of people want to find the demon that's pushing up the price, but it's really not just one factor," he said. "Multiple factors are combining their effects."

The war in Ukraine is still having an impact on the world supply of food and the fuel that is used to transport it, he said. Extreme weather events, including droughts and wildfires in Canada, are also hitting the food supply.

The labour shortage is also an issue. Worker recruitment is a problem both in agriculture and in retail. That leads to a need for employers to offer higher wages, and those costs are passed along to the consumer, said Jia.

In addition, the Canadian dollar has lost value against the American dollar, and that affects all of this country's international trade.

We are a large agricultural producer, for our size, so in that way when world food prices increase, P.E.I. is actually there to gain from it.— George Jia

None of these factors shows any sign of going away, which could lead to continuing high prices, said Jia.

Yet he also noted that higher food prices are a worldwide phenomenon, and this has an upside for P.E.I.

"We are a large agricultural producer, for our size, so in that way when world food prices increase, P.E.I. is actually there to gain from it," he said.

"It's not necessarily all a bad situation for us."

Food insecurity increasing

While some Islanders are changing their buying habits at grocery stores, others are struggling to afford food at all. 

Pauline Howard, a volunteer with the P.E.I. Food Exchange, a non-profit that works to improve food security on the Island, says her organization is seeing high demand across the board. 

The organization has a number of community fridges across the Island, and Howard says communities are struggling to keep those fridges stocked.

The non-profit also holds community cook days once a month, with volunteers getting together at St. Paul's Church in Charlottetown to cook about 100 meals for those in need.

The team donates those meals to the community fridge on Connolly Street, which is open 24/7.

"Anybody who wants to can come and collect them," Howard said of the meals. "There's no judgment."

Really the solution to that is to put more money into the pockets of the lowest-income earners in Canada, and that will affect our food security rates.— Pauline Howard

The food is being collected so quickly that the Food Exchange is considering expanding community cook days to have volunteers make enough meals for a week.

Despite initiatives like these, Howard said there's no way her organization can eliminate need. 

"Really the solution to that is to put more money into the pockets of the lowest-income earners in Canada, and that will affect our food security rates," she said.