Food prices in the Consumer Price Index
Since the onset of the COVID-19 pandemic, food prices have been impacted by factors such as weather, supply disruptions and shifting consumer demand. In turn, this affects Canadians' pocketbooks. Food is the second largest component of the Canadian Consumer Price Index (CPI), with Canadians directing about 17% of their expenditures to food from stores and restaurants. Statistics Canada would like to provide more information on the data and methods used to calculate the food purchased from stores index in the CPI.
The CPI is designed in accordance with international standards used by most national statistical organizations around the world.
Food prices are now mostly captured using weekly scanner data collected directly from grocery retailers across Canada. Scanner or transaction data are the highest-quality price data available as they track actual prices paid by Canadians at the till, including sales and promotions where applicable. Food prices are also collected using store websites or flyers to account for outlets for which scanner data are not available. The CPI data collection methods also verify whether a product is in stock or a substitution is required, or whether a quality/quantity adjustment is needed.
The agency collects a mix of representative brands of food products, including name brands and house brands where possible. To protect the confidentiality of those who make and sell the goods we price, Statistics Canada does not publish specific brand names or store names. As consumer preferences change, representative products are updated accordingly.
A list of the representative products of goods and services in the CPI basket (as of June 2021) is available on the Statistics Canada website. Representative products are added and removed each month, as needed.
The CPI measures pure price changes based on a fixed basket of goods and services. The CPI adjusts for quantity and quality changes to ensure that it measures the same products over time. For example, smaller packaging of a food product (all else constant) is reflected as a price increase in the Canadian CPI. The infographic Measuring Pure Price Change in a Constantly Changing World explains other types of quality adjustments in the CPI. Note that food basket quantities are not published; they are derived using product revenues from retailers.
Average prices versus the Consumer Price Index
Statistics Canada also produces the tables Monthly average retail prices for food and other selected products (18-10-0002-01) and Monthly average retail prices for selected products (18-10-0245-01), but the movement in these average prices may not be the same as the CPI. Products can vary in quality and quantity between outlets, or between geographic areas. Brands and outlets can also vary from month to month. Therefore, average prices may not necessarily be fully comparable from one month to another.
While average prices can be used to assess price level in a given month, they should not be used to assess price change through time. It is therefore recommended that the CPI and its sub-indexes (table 18-10-0004-01) be used for this purpose.
Here are some useful links to assist in better understanding the CPI:
• Consumer Price Index: Frequently asked questions
• Enhancements and Developments in the Consumer Price Index Program
• Personal Inflation Calculator
• Consumer Price Index Data Visualization Tool
• Evaluation of the Consumer Price Index Program
• The Canadian Consumer Price Index Reference Paper
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).