HALIFAX, N.S. — While the year-over-year inflation rate slowed to just over 5 percent in February, food inflation is double that. And that’s cutting into ...
HALIFAX, N.S. — While the year-over-year inflation rate slowed to just over 5 percent in February, food inflation is double that. And that’s cutting into everyone’s budget these days. Last month, the CEO’s of Canada’s major food retailers were called to testify in front of a Parliamentary committee. It was an event labelled by some as little more than political theatre. Sunil Sarwal is a bit of an insider in the food world in Canada.
So we get angry about the food and at the same time. food inflation is quite a bit higher than regular inflation in Nova Scotia, the regular inflation rate I think, is around six and a half percent. Food inflation like you said though Sheldon, is in double digits. Were around 10 percent right now and it might be even higher for 2023. So, people are really noticing that.
A lot of the commentary so far has just been about the price on the shelf, and the margin that the grocery store is making on that. But where I'm coming from, where I'm working with the people who actually make the food product, I get to see sometimes the numbers of how this breaks down and what goes into it.
A distributor might add as much as 30-50 percent to the cost of a product before it gets to the grocery store. So, there's another increase. And when your cost goes up a few percent at each step, and then they're adding 30 percent, that gets magnified. Then your grocery store will add their margin as well, you know, the famous 4 percent that they're adding. Four percent is an average figure though, it depends on the category and in some categories, it can be as high as 50 percent.
Also, grocery stores charge manufacturers a lot of fees. I think we're starting to hear about that a lot more. There's an enormous amount of fees that go into the thing. They're not charging the no-name brands, their own brands, those kinds of fees, as well. So, all of those little things add up to a huge amount. So, the cost of the actual package, the cost of the ingredients might stay the same. All the other costs are either gone, or radically reduced.
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