Canadian grocers, retailers warn of more price hikes

By Alastair Sharp
TORONTO, Jan 22 (Reuters) - The Canadian dollar's plunge to
a nearly 13-year low this week has grocers, fishmongers and
other import-reliant retailers warning that shoppers can expect
further price increases in the coming months.
Data released on Friday showed Canada's annual inflation
rate rose in December as food prices surged. Canadians paid 4.1
percent more for food purchased at stores, mainly due to higher
prices for fresh fruit and vegetables.
The currency has dropped along with the country's economic
prospects as the price of oil, an important export, tests its
lowest levels since 2003. CAD/
The Canadian dollar's accelerated weakening in recent weeks
has had an immediate effect on prices of fresh produce, most of
which is trucked in from warmer climes. Shoppers were shocked to
see C$5 ($3.53) bunches of celery and C$10 cauliflowers.
"Prices are going through the roof," said Anthony Pronesti,
owner of Urban Fresh Produce at the bustling St. Lawrence market
in central Toronto. "From my cash register, I hear them yelling,
'Oh my goodness, C$13 for strawberries! You must be insane.'"
He said the slump had radically altered his purchasing
decisions. For example, he did not buy any asparagus or
cauliflower for a week for fear they would not sell.
For Toronto fishmonger Harry Kim, his biggest short-term
advantage over rivals is a bigger freezer, which gave him the
ability to commit to larger U.S. dollar-denominated orders of
Atlantic salmon or Chilean sea bass before the domestic
currency's latest slump.
But he said he could not keep shouldering the losses and
recently raised his retail price for fresh halibut.
"This last drop, when (the Canadian dollar) got under 70
U.S. cents, has everyone in a panic and everyone talking about
how things are going to be in two months," said Kim.
Bank of Canada Governor Stephen Poloz on Wednesday said a
sharp currency deterioration could feed broader price hikes that
unhinge inflation expectations.
Other retailers, who have so far mostly swallowed shrinking
margins, said they would probably recalibrate for currency
weakness at the same time they pass on a manufacturer's typical
price rise early in the year.
"The price for a TV, or any big ticket item, is definitely
going to jump up in the next month or two," said Leif Quraeshi,
who imports and distributes high-end baby goods to retailers.
($1 = 1.4146 Canadian dollars)