Your grocery bill’s bottom line may soon be on the way down

VANCOUVER (NEWS 1130) – If you’ve been feeling the pinch at the grocery store, some relief could be coming.

Kevin Grier with food industry research firm Kevin Grier Market Analysis and Consulting says thanks to commodity prices going down and retailer rivalry heating up, it may not cost quite as much to fill your fridge.

He says we could see very modest price increases, but we could also see decreases in other areas.

Grier tells us crop-based prices went down about one per cent in the first quarter of this year and animal product raw prices have steadily fallen.

“There is a strong relationship six months later. The direction crops go, six months later, the retail prices tend to go the same way,” he explains.

“There’s nothing about commodity prices that is pointing towards higher prices. In fact, at most levels, it should be pointing towards lower prices.”

Grier adds in terms of retailers, it’s all about how they respond to each other.

“Grocers continue to lose market share to Walmart and Costco. In other words, these alternative formats are taking share away from the grocers. Loblaw and Sobeys are starting to feel their share of the pinch. So that’s kind of an indication that the competition is still strong at retail and heating up.”

Some companies have sent letters to suppliers saying they want prices decreased.

Grier expects competitive intensity to pick up fairly significantly during the rest of this year. He says if that is the case, chances are we’ll see lower inflation, if not out-and-out declines in prices of grocery products.

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