Food prices in Canada keep rising faster than rate of inflation

No, you haven't been imagining it: your grocery bill may have gotten more expensive recently, at least according to Loblaw's September Food Inflation report, which states that food prices have remained above the general rate of inflation due to external pressures.

The report, released on Sept. 30, shows that food inflation in Canada rose 3.5 per cent in August compared to the overall Consumer Price Index (CPI) at 1.9 per cent.

"Much of this gap is tied to broader global factors — such as commodity volatility, higher transportation and energy costs in the supply chain, and weather-related disruptions affecting produce and meat," reads the report.

One of these weather-related disruptions is due to the unusually low rainfall seen in the Atlantic provinces, Quebec, and parts of Ontario. Due to this, Loblaw said that crops like corn, soybeans, blueberries, and root vegetables were "stressed during critical growth phases," which in turn reduced yields, in some cases by anywhere between 10 and 25 per cent.

"This could mean grocers will need to transition to imports earlier, or that products may be a bit smaller," said Loblaw.

Additionally, dry conditions have also increased the cost and logistical burden of irrigation and feed, specifically for forage crops and livestock, with some produce sectors facing noticeable reductions in both quality and quantity.

Loblaw also noted that tariffs have been a persistent headwind to food inflation, with coffee in particular being hit the hardest, with its price climbing back near its 2025 highs after the U.S. imposed a 50 per cent tariff on Brazilian imports.

"The tariff has disrupted trade flows," said Loblaw. "At the same time, Brazilian producers are holding onto their beans and taking a more cautious approach to selling, which is tightening available supply."

However, despite these increases, things might start to look a little better in the coming months.

"Similar to earlier this year, when tariffs were introduced, customers can expect to see tariffs come off in waves."

The most immediate price decrease will be seen on produce, followed by fresh items like meat, poultry, and dairy, and then by packaged and pantry goods as retailers sell through inventory.

So what does this mean for you? Well, items like orange juice (which was one of the most notorious tariff-impacted products from earlier this spring) will see a reduction in price on shelves.

Loblaw also noted that, despite the increase in food inflation, its internal food inflation rate remains below the CPI, which it said means "customers are finding more savings in stores."