As inflation and supply chain issues lead to rising gas and grocery prices across the country, experts suggest Albertans should tighten their budgets and pay close attention to where their money goes.
“It’s almost like a perfect storm right now,” said Heather Thomson, the executive director of the Alberta School of Business.
“We’ve been seeing the increase of prices in the food world for about 13 years now, pretty consistently. But nothing to this extent. And for a family with an average of four people, this is going to mean about an extra $1,000 for the price of groceries of what you would have purchased last year. So it’s about an eight per cent increase overall.”
Thomson says consumers will soon notice food price increases not only at the grocery store, but also at restaurants.
“There’s a whole bunch of reasons why,” she said. “We have things like the labour shortage, we have the increased inflation, we have supply chains that were impacted… and most recently, increased oil prices.”
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Chetan Dave, an associate professor of economics at the University of Alberta, said the current inflation situation in the country is the result of many factors that started with the COVID-19 pandemic.
“Pandemic response pumped money into the economy,” Dave said. “(Government) literally gave a lot of money to businesses and individuals hurting, and that’s pumped a lot of money into the economy.
“You do expect that to eventually translate into an increase in prices if supply of goods and services don’t sort of catch up at the same time.”
Dave said supply chain issues, increased production costs and oil prices are what got us here.
“You do have a situation of too much money chasing too few goods.”
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However, Dave adds that while he acknowledges the supply chain and inflation issues, he expects them to balance out — although the timing is hard to pinpoint due to global situations, including the war in Ukraine.
“Will these issues dissipate over time? I expect so, as more and more countries exit this pandemic. So I do expect these things to go down,” Dave said.
“We’re living in a very volatile time. Sometimes it doesn’t feel that way here in Edmonton, but we are living in pretty volatile times globally speaking, so not being able to forecast exactly and waiting things out just a little bit more is going to be important.
“There is no magic wand.”
Adapting to a ‘tricky time’ for budgeting
Thomson says there are a few things that families can do to better budget and prepare for sticker shock.
“This is something that we will have to get used to, certainly in the short term, and definitely do our best to shop around, do what we can to support local,” she said.
“Buy seasonally if you can. If it’s an option to you and your family, purchase in bulk. That’s definitely a way to save some money as well. Just make sure that you’re paying attention to what the grocery stores are offering in terms of promotions. And making sure you’re staying in the know, and doing that research.”
Thomson says being aware of the situation and thinking about what you are purchasing is the best way to stay prepared, but agrees with Dave in that current prices should eventually balance out.
“We’ll see an evening out most likely,” she said. “But I think (in) the next few years, this is going to be a tricky time for a lot of families.”
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