DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
Retail

Canadian Inflation Causing Shoppers To Focus On Essentials

By Reuters
Share this article
Canadian Inflation Causing Shoppers To Focus On Essentials

Canada's national statistics agency has revealed new weights for the basket of goods and services in its Consumer Price Index, giving more prominence to changes in the prices of food and gasoline.

The reweighting, which Statistics Canada carries out every year, has historically had only a marginal impact on the headline number. The new basket weights will be applied to May's inflation data, due out on June 27.

Rebalancing

The rebalancing reflects changes in 2022 compared to 2021. Statscan said the alterations were designed to take into account the continuing recovery from the impact of COVID-19.

"Spending that began to gradually shift back towards pre-pandemic patterns in 2021 continued and were more pronounced in 2022, with several sectors inching closer to pre-pandemic basket weight shares," it said.

Supply Chain Disruption

COVID-related measures and disruptions to supply chains helped push Canadian inflation up to a near-40 year high of 8.1%in June last year. It has now dropped to 4.4%, still more than double the Bank of Canada's 2.0% target.

ADVERTISEMENT

Gasoline prices, pushed higher by increased demand as well as Russia's invasion of Ukraine, will now account for 4.27% of overall inflation, up from 3.47%.

Gasoline is part of the larger transportation component which, for the second consecutive year, increased the most among the major eight segments, rising to 16.94% from 16.16%.

Consumer Habits

The food component expanded to 16.13% from 15.75%, reflecting increases in sales at restaurants as lockdown measures were removed.

But the shelter component dropped to 28.22% from 29.67%, in part due to lower costs for rent and other accommodation expenses as the housing market cooled.

ADVERTISEMENT

DVD players were removed from the 2023 basket as they have become less popular with consumers following the advent of streaming services. Conversely, charcoal barbecues and snow removal equipment were added.

News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.

Get the week's top grocery retail news

The most important stories from European grocery retail direct to your inbox every Thursday

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our terms & conditions and privacy policy. You can unsubscribe at any time.