Inflation seems to be cooling — except at the grocery store. What’s going on?

The cost of food continues to soar even as the overall inflation rate cools in Canada. Here's what's behind the higher prices at your local grocery stores and restaurants.

The overall inflation picture is improving for many line items on Canadians’ household budgets — with at least one notable exception.

Fresh data from Statistics Canada released Tuesday shows the price of food continues to soar, even as the headline inflation figure ticked down at the start of 2023.

The agency said food prices were up 10.4 per cent year-over-year in January — up slightly from December — while the rest of the Consumer Price Index (CPI) items decelerated to an annual pace of 5.9 per cent.

Food inflation has outpaced the general inflation rate for 13 months in a row. And while StatCan’s CPI tracks a representative basket of goods to show general trends in Canada, Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University, says consumers might find their personal inflation rate is even higher if their diets are made up of the fresh foods and grains that are being hit particularly hard.

“I suspect a lot of people are saying, ‘Well, 10.4 per cent is unbelievable. Well, they’re right. Actually, it’s probably more than that,’” he says.

January’s grocery store prices were higher for meat (up 7.3 per cent), bakery products (up 15.5 per cent), dairy (up 12.4 per cent) and fresh vegetables (up 14.7 per cent).

There were some aisles of relief, however: lettuce, specifically, saw a 5.8 per cent price drop last month, as did oranges (down 1.8 per cent), pasta (down 0.5 per cent) and breakfast cereals (down 2.9 per cent). Fish — be it canned, fresh or frozen — also saw some modest price drops.

Statistics Canada pointed to a few global factors driving up food prices. When it comes to chicken, which saw costs rise 9.0 per cent year-over-year in January, the agency pointed to avian flu outbreaks, strong seasonal demand and continued supply chain issues as fuelling the price hikes.