Restaurant prices poised to surge in 2018

Food costs are expected to increase in Canada next year, a new report forecasts.

From your favorite restaurant to the local grocery store, the rising cost of food expected in Canada could have you devoting more of your money to what's for dinner next year, a new report suggests.

For the typical family of four, annual food expenditures are projected to jump in 2018, increasing by nearly $350, according to recently released data produced jointly by Dalhousie Faculty of Management and the University of Guelph. This translates to just shy of $11,950 on the year for a two parent, two child household.

The increases are expected across the board, with the biggest uptick coming from dining establishments. The report indicates restaurants could charge between 4 percent and 6 percent more in 2018 than they did in 2017, potentially compelling budget-minded families to reconsider the frequency with which they dine out. Roughly two-thirds of Canadians consider eating out as more of a luxury than everyday thing, according to polling conducted by Restaurants Canada.

Sylvain Charlebois, lead author of the report and dean of faculty management at Dalhousie University, noted that those who choose eateries more often times than not – be it for breakfast, lunch, dinner or all three – are likely to feel it in the wallet the most.

"Canadians will eat out more frequently in 2018, and that will come at a cost," Charlebois explained.

Given Canadians' penchant for convenience above all else when it comes to meal planning, Charlebois said he anticipates an increasing number of Canadians will eat out, despite the projected spike in menu prices.  

"Most of (the increase) will come from food service, which would make some consumers a bit vulnerable – particularly those who don't cook or (who) eat out a lot," Charlebois told The Canadian Press.

30 percent of household budgets spent on food
On average, roughly a third of Canadians' overall expenditures – 30 percent – goes toward grocery shopping, the joint report said. This percentage includes eating at restaurants as well, whether physically at the dining establishments or as takeout.

As for how much food prices will rise at the provincial level, the increases are projected to be fairly evenly spread. The report noted Atlantic Canada may be particularly hard hit, however, because the cost of food has barely budged for the past year or so. Competition is expected to ramp up in Ontario and Alberta, which will help dampen the effects of price increases.

Simon Somogyi, co-author of the report and professor of agriculture at Dalhousie, noted that a classic example of businesses giving consumers more options is online retailer Amazon recently buying Whole Foods Market, a move that has led to gradually lower prices at the supermarket chain, which specializes in organic offerings.

"The recent purchase of Whole Foods by Amazon is having a significant impact on the Canadian food retail sector," Somogyi explained. "Other major food retailers are now changing their business models, particularly in how they sell to consumers, including online offerings."

Mobile apps make ordering in as easy as pie
Indeed, there are several mobile apps that consumers can download to their devices, enabling them to order out without ever having to leave their houses or talk into the receiver on their phones.

"Whenever there's any kind of inclement weather we see a surge in orders," Vlad Grouza, a masters' student in physics at Ryerson University, told CBC News.

In his spare time, Grouza delivers for Foodora, an online food delivery company that's increasing the size of its global footprint, having begun in Germany. The paper noted that the service fees charged to customers depend on the size of their orders, paying slightly less for large orders – $30 and up – and about $1 more on orders that are less than $30.

Although families may find frustration with food prices heading higher, it follows what's been a trend for several years now, as retail prices on household staples like milk and bread have steadily climbed. The typical cost of one liter of milk goes for about $2.50 as of October, up from $2.44 in 2013, according to Statistics Canada.