Greedflation: Canadian consumers warned about shrinking packages, price gouging

Financial watchers are issuing a warning to Canadian consumers: be on the lookout for shrinking packages and price gouging as retailers look to keep costs in check.

More price increases are expected to hit grocery stores this fall. It’s another hit for consumers in a year that has already seen nearly double digit increases in food costs.

The price of food purchased at stores rose 9.7 per cent in May compared with a year ago as the cost of nearly everything in the grocery cart climbed higher, Statistics Canada said last month.

But how much of the increase – from bills to the gas pump to the grocery store shelves – is due to “greedflation”?

“For example here in Alberta, the price at the pump – how much we’re paying for gas – because we have a tax freeze on our gas, but is the as station actually passing those savings on to the consumer?” said Taz Rajan, the community engagement partner at Bromwich + Smith.

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Another way for food producers to keep costs in check is offering smaller packages for the same price.

“All that shrinkflation really means is downsizing food packaging,” said Rajan. “So a bag of chips, let’s say it was $3. Your bag of chips is still going to be $3, but instead of 100 grams it’s going to be 75 grams.”

Rajan says Canadians have the power to choose with their dollar when it comes to combating price gouging and shrinkflation. And consumers have to get creative with coupons if they want to save at the store.

“The last thing processors want is to become a scapegoat and to be blamed for higher food inflation,” said Sylvain Charlebois, Dalhousie University professor of food distribution and policy.

“Inflation is impacting every single Canadian out there but it’s also impacting the political economy of food and how the food industry is being perceived.”

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Premier Jason Kenney said he will ask the competition bureau to investigate why Albertans are paying such high prices at the pumps despite the gas tax freeze.

Alberta’s Opposition NDP says at a time when the province is posting a budget surplus from high oil prices, high costs of living shouldn’t be passed on to consumers.

“We are a wealthy province where there are now billions of dollars now circulating in large corporations. The UCP has cut their taxes,” said Shannon Phillips, the NDP’s finance critic.

—With files from The Canadian Press.