Loblaw sees grocery prices cool in Canada, but tariff tensions could change that
Grocery shoppers in Canada experienced a bit of relief in June, but Loblaw’s latest report says that could easily change with the ongoing tariffs spat.
According to the grocery giant’s July food inflation report, food prices in June rose by 2.8 per cent compared to last year. It’s a slower pace than the 3.3 per cent increase seen in May, but still higher than the headline inflation rate of 1.9 per cent.
Loblaw says the drop in fresh vegetable prices, which fell by 3.1 per cent, helped ease cost pressure on grocery bills, encouraging shoppers to buy local heading into the summer.
“The summer months bring some of the best quality and lowest pricing options for certain fresh produce for Canadians,” reads the report.
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Veggies like locally grown lettuce, celery, beans, eggplant, and zucchini come into season, hopefully lowering your grocery bill.
“As international options include higher freight costs and foreign exchange rates, during peak growing season, the cost of these can typically be 15 to 30 per cent cheaper than spring months,” explained Loblaw.
The grocer’s report found that the cost of coffee beans fell again in June, “thanks to good weather and stronger global supply.”
Canadians who love chocolate paid less for it as inventories grew and demand softened. Sugar prices also dropped as India allowed more exports and Brazil produced more than expected, according to the report.
Unfortunately, beef prices continued to climb in June, “pushed up by tight cattle supply and strong demand heading into barbecue season.”
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However, Canada and the United States’ tumultuous trade war still looms over shoppers’ wallets.
“The U.S. government continues to throw trading partners into chaos with shifting goal posts during negotiations,” reads the report.
On Thursday, U.S. President Donald Trump signed an executive order to raise tariffs on Canada to 35 per cent starting Friday at midnight.
Canadian goods not covered under the Canada-United States-Mexico Agreement (CUSMA) will be impacted by these tariffs.
Loblaw says food prices in Canada will fluctuate depending on how the tariff spat plays out.
The corporation says if the federal government imposes further counter-tariffs on the U.S., grocery prices are likely to increase.
U.S. tariffs on other countries also affect Canada because ingredients sourced from those places could potentially see higher prices on finished goods destined for Canada. This includes vegetables, proteins, spices, packaging, and more.
Loblaw says prices will go down if new trade agreements are signed and tariffs are removed.