Food prices are
beginning to plateau, says market analyst Kevin Grier, after several years of
significant increases.
He said two
things drive food prices – farm-gate prices and supermarket competition.
Farm-gate prices
have been either in decline or have are steady, indicating little reason for further
retail price increases for that reason.
And Grier says
supermarket competition is beginning to heat up.
Looking back,
Grier says the decline in the value of the Canadian dollar drove farm-gate
prices higher. The dollar has now stabilized.
He says
supermarket competition tends to heat up when extra floor space comes into the
market, and that’s what happened in 2014 when Target entered the Canadian
market.
But when it
closed, square footage went down and competition eased. Now square footage is
again on the increase.
Since the George
Morris Centre folded, Grier has set up Grier Market Analysis and Consulting and
for this report and some others, he works as an associate with Agri-Food
Economic Systems headed by Al Mussel, formerly chief economist for the George
Morris Centre.
