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(Nov. 16, 2009) This month’s economic insights brought to you by CRFA economist Chris Elliott.
 CRFA economist
Chris Elliott |
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Menu prices at restaurants in Canada were 2.8% higher in September 2009 over September 2008. A moderation in the overall food inflation rate restrained the foodservice industry’s menu inflation rate for a fifth consecutive month and represents the slowest pace since August 2008.
In September, growth in menu prices at full- and limited-service restaurants decelerated to 2.8% and 2.9%, respectively. These rates sharply contrast with the first five months of 2009, when rising food and labour costs forced operators to raise menu prices by more than 4% over the same period in 2008.
Moderating food prices
In recent months, the year-over-year growth in food prices has slowed due to a moderation in the prices of fresh fruit, vegetables and meat. Fresh fruit prices tumbled 4.5% in September, following double-digit growth in the price of fruit in the first half of 2009. Despite a moderation in the inflation rate for bakery and cereal products, prices remain at record highs.
Provincial variation
At the provincial level, September’s menu inflation ranged from a high of 5.4% in Saskatchewan to a low of 0.3% in Prince Edward Island. Part of the increase in Saskatchewan’s menu prices is due to a 7.5% jump in the minimum wage, while rising food costs were partially responsible for higher menu prices in Newfoundland and Labrador.
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