Food prices are likely to rise while restaurant prices go down amid COVID-19 and a sinking Canadian dollar, according to a new forecast by the University of Guelph and Dalhousie University.

The universities put out a forecast for food prices every December, but issued an update Tuesday because of the ongoing pandemic. While the original overall price forecast — prices to rise between two and four per cent, especially vegetables and bakery — remains, researcher Sylvain Charlebois says the factors in the rise have changed, and may precede an even more difficult 2021 for consumers.

“Things are going to catch up to grocers, to processors. We are expecting salaries to go up and as a result prices will be under a lot of pressure.”

For example meat could rise up to six per cent, which means a $20 cut would become $21.20. Seafood could rise up to four per cent, which means a piece of fish that sells for $20 could become $20.80.

Charlebois said 2020 was already set to be difficult for shoppers. A four per cent rise in prices is more than double the usual forecast, he said.

This is primarily attributed to the oil price war between Russia and Saudi Arabia, he said, something that’s been playing out in the background of the pandemic and driving the Canadian dollar down.

“The currency is really the challenge … that’s due to the oil price war happening right now between Saudi Arabia and Russia, which is impacting the dollar,” he said. “That’s why to import food into Canada is going to cost more.”

And amid that, shoppers should expect to see thinner flyers as grocery stores fight to mitigate rising costs. Supermarkets and grocers have been shortening hours, installing Plexiglass barriers, stringently cleaning stores and in many cases hiking wages for their employees.

He said while many of those were meant to be temporary measures, there’s a good likelihood many are here to stay.

“My guess is that it won’t be temporary. They’ve set a new bar,” he said. “That bar will require everyone in the food industry to pay their people more, which is not necessarily a bad thing. But in the end, consumers are going to have to pay for that.”

The dropping price of oil has helped to mitigate those extra costs so far, said Charlebois. But that can’t last forever. He predicts that in 2021, the economy will be playing catch-up from the previous year, driving grocery costs up more.

“To operate a store these days is very costly,” he said.

Meanwhile, when restaurants reopen, Charlebois said they are likely to drop their prices in a bid to get their cautious customers back.

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“We are expecting food service to get into a bit of a(n) … aggressive campaign to regain market share. And so we are expecting prices to drop significantly.

As well, the forecast predicts that online purchases and delivery could contribute to the rise in prices over time. That’s because many grocers were beginning to launch online delivery options but were not prepared for the volume the pandemic brought on. Eventually, the cost of those additional resources deployed to keep up with demand, plus delivery costs, will be downloaded to the consumer, states the report.