Cost increases from grocery suppliers still remain at record but seem to have plateaued with a 10.0 percent yearly increase for January 2023. Costs still rose between December 2022 and January 2023, but the month-to-month increase was softer.
“Although it seems like there is potential for supplier cost increases to have plateaued, we’re not certain about the change in trend yet. The usual summer cost change moratorium was in place until the end of January, and so it’s still unclear if supplier cost pressures are stabilising,” said Brad Olsen, Infometrics Principal Economist and Chief Executive.
While shipping costs and fuel prices have moderated, food prices still highlight the persistence of inflation. International products are similar, with food prices plateauing instead of dropping. The world Bank Commodity Price Index showed food prices rose 0.4 percent in January, keeping international prices two percent above the same time last year.
“Supplier costs remain higher than a year ago across all departments. Produce costs have risen considerably in the last year, up by 22 percent per annum in January 2023. Recent bad weather across the country is expected to reduce production and yields of some food items, which, combined with sustained inflationary pressures, will keep supplier costs high.”
“The government’s subsidy of Road User Charges (RUCs) has been important to prevent even more transport-related cost pressures flowing into grocery supplier costs. The recent announcement of an extension to the RUC subsidy will continue to reduce otherwise higher cost pressures.”
