Inflation slowed in 2024, but Canadians continued to shift their grocery shopping habits

Prices for food purchased from stores increased by almost one-tenth (+9.8%) in 2022, the largest annual increase since 1981 (+12.0%), amid broad-based inflation. This rate slowed in 2023 (+7.8%) and even more so in 2024 (+2.2%).

Still, prices for groceries have continued to take a bigger bite of Canadians’ budgets. In 2023, households spent on average 7.4% more on food purchased from stores than in 2021. Approximately one in four Canadians (25.5%) living in the provinces faced food insecurity in 2023.

For many, this meant not only changing consumption and purchasing habits, but also stretching one’s dollar by visiting different types of stores, according to analysis of retail data we conducted in 2023.

More specifically, the share of food sales at general merchandise retailers—including department stores, warehouse clubs, supercentres and others, such as dollar stores—rose from 21.6% in early 2021 to 25.9% in late 2022. However, food and beverage retailers, mostly grocery stores, still accounted for most sales.

With this backdrop, let’s break down some more recent data by store and product type to see where and how Canadians filled their shopping carts in 2023 and 2024.

Food and beverage sales account for nearly one-quarter of total retail spending in 2024

First, the big picture: Canada-wide retail sales rose by $10.6 billion (+1.3%) from 2023 to $803.0 billion in 2024.

The drivers of this overall increase in 2024? Purchases of food from general merchandise retailers, which increased by $3.7 billion (+8.9%) to $45.3 billion, and from food and beverage retailers, which rose by $2.4 billion (+1.8%) to $137.0 billion.

So, while traditional grocery stores continue reporting the most food sales, Canadians are increasingly spending their dollars elsewhere, and, as the data show, patterns are emerging regarding which products are being purchased.

Fresh food sales at general merchandise retailers increase at triple the pace of those at food and beverage retailers

Fresh foods, such as fruits and vegetables, meats, fish, eggs and dairy products, baked goods, and other perishables, continued to make up a higher proportion of sales among food and beverage retailers than general merchandise retailers from 2023 to 2024.

Over the same period, fresh food sales increased by $1.6 billion (+2.7%) to $62.2 billion for food and beverage retailers and by $1.6 billion (+8.0%) to $22.2 billion for general merchandise retailers.

Though sales for both retailer types increased by the same amount, the near-triple rate of increase among general merchandise retailers may suggest a consumer shift toward seeking better deals.

Prices for virtually all fresh foods rose in 2023, largely due to poor growing conditions, higher input and transportation costs and lingering COVID-19 pandemic-related supply chain issues. Though price increases slowed considerably in 2024, consumers may have continued to shop around more.

Pronounced shift in sales of packaged foods, dry goods and other similar products at general merchandise retailers

Sales of frozen and packaged foods, dry goods and a range of other products also increased from 2023 to 2024. These sales rose by $729.8 million (+1.9%) to $39.0 billion at food and beverage retailers and by $1.7 billion (+9.2%) to $19.7 billion at general merchandise retailers.

The sales increase for these foods, when compared with that of fresh foods, could signal a more notable shift in shopping habits. General merchandise retailers have long competed with more traditional grocery stores for these types of products, offering similar layouts in the middle aisles and large freezer sections.

Inflation did continue to take a considerable bite out of many products in this category in both years, possibly reinforcing those habits.

Beverage sales fizzle at grocery stores

Sales of soft drinks, other beverages (including alcohol) and ice have long represented a steady proportion of sales at food and beverage retailers. However, increases have largely gone flat; the $35.8 billion in sales in 2024 was little changed from 2023.

Over the same period, sales of those products increased 13.2% to $3.5 billion at general merchandise retailers, driven by soft drinks and non-alcoholic beverages. This possibly reflects shifts in consumption habits and convenience rather than inflation, given their lower price range.

Overall alcohol sales declined from 2023 to 2024 among all retailers. Notably, provincial liquor authorities and other retail outlets recorded a decline in sales in the fiscal year ending March 31, 2024.

Shrinking share for health and personal care retailers

Health and personal care retailers—mostly at drug stores, pharmacies and food (health) supplement stores—saw their food sales tick down by $261.9 million from 2023 to $2.7 billion in 2024.

In addition to the annual decline, sales in this category also showed a pattern of decline in each quarter of 2024 compared with the same quarter one year earlier in most product categories.

Retailers in this category are likelier to have higher price tags, smaller inventories and less selection compared with the larger-scale stores.

Ahead in the checkout lane for 2025: grocery prices trending upward

On a year-over-year basis, prices for food purchased from stores were up in January (+1.9%), February (+2.8%), March (+3.2%) and April (+3.8). The uptick in January matched the headline inflation rate, which was then outpaced by grocery price increases in the next three months.

Retail data (product and retailer type) for the first quarter of 2025 will be released on July 8, 2025.

Stay tuned to StatsCAN Plus for an in-depth look at Canadian households’ food expenditures in 2023, using newly released data from the Survey of Household Spending.