Canadians are on average making fewer grocery store runs as food inflation persists, but still spending roughly the same amount per trip, according to a report Thursday by RBC.
The bank鈥檚 consumer spending tracker showed the average number of grocery transactions in February was up 8.4 per cent relative to pre-pandemic levels, compared with a roughly 13 per cent bump relative to pre-pandemic levels seen toward the end of November 2022.
鈥淚t could very well be people are cognizant of rising prices, and instead of just going and picking up things here and there, they鈥檙e being more conscious and just making fewer trips to the store,鈥� RBC economist Carrie Freestone said.
鈥淚t鈥檚 largely a story of people continuing to have to pay more for groceries.鈥�
Grocery prices grew by 11.4 per cent year-over-year in January, despite an overall annual inflation rate of 5.9 per cent for that month, according to the latest data released by Statistics Canada.
Freestone said it could take time for food prices to fall, but it鈥檚 too soon to predict when that will happen.
鈥淕rocery spending is very much non-discretionary. I think where we鈥檙e more likely to see the pullback, as the impact of higher rates filters through the economy, is discretionary spending,鈥� she said.
鈥淲hen interest rates are really high, food prices are still a lot higher and real wages aren鈥檛 catching up with inflation. We鈥檙e going to be in a situation where people have lower disposable income and they have less money left over to spend on discretionary goods.鈥�
The consumer spending report showed discretionary spending held steady through February. Restaurant spending remained strong despite a slight decline over the last three months.
The latest inflation data indicated food purchased from restaurants rose 8.2 per cent in January compared with the same month last year 鈥� up half a percentage point from December.
Canadians also continue to book trips despite flight costs rising 28 per cent from pre-pandemic levels, according to RBC. Spending growth on international travel continued to outpace domestic flights.
鈥淭his is a unique case, but we鈥檙e coming out of a pandemic where we have this immense pent up demand,鈥� Freestone said.
鈥淧eople are willing to spend a little bit more at bars and restaurants, a little bit more travel, because they missed out on it for so long. It is somewhat unusual that we鈥檝e seen it hold up for this long, but given the context, it鈥檚 not surprising to me.鈥�
鈥擲ammy Hudes, The Canadian Press
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