Canadian supermarkets switch focus to fruit, veg

Meat has historically been the money maker for grocery stores, but as the trend for healthy eating continues, fruit and vegetables have taken the lead. Eating healthy is getting costlier by the month, thanks mainly to the sustained drop in the value of the loonie. In response, Canadian grocery stores, are ramping up efforts to sell more fresh foods.

Grocers import roughly 80 per cent of the fresh food Canadians consume, experts say. Average fruit and veggie prices popped 6.9 and 8.7 per cent respectively in September – registering multi-year highs, according to Statistics Canada.

No relief
A plunging loonie has been fanning food inflation for some time now: Grocery prices have jumped by more than three per cent for 13 consecutive months Scotia’s note said, as supermarkets have passed higher import costs onto consumers.

And the trend isn’t about to let up. Economists at TD Bank suggested in their latest outlook that the Canadian dollar will fall to 73 cents U.S. through early 2016 (before rebounding to 75 cents by the end of the year).

More than half of the country saw average prices rise more than four per cent for food sold through stores last month, with consumers in four provinces seeing the cost of their basket of groceries climb more than five per cent in September compared to last fall.

Some experts say the country’s largest grocers – Loblaw, Empire (which owns Sobeys and Safeway) and Metro – have had an easier time passing on higher costs to consumers as competition between them and the likes of Walmart has eased, an easing enabled in part by the departure of Target Canada earlier this year. Consolidation has also served to dampen price competition and promotions, some experts suggest.