“It’s expensive even when it’s on special”: Quebecers are still in shock from inflation

Inflation may have fallen significantly to around 2%, but Quebecers still feel the psychological shock of high prices today.

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“I paid $4.99 or $5.49 for my pinotte butter for a long time. Today it’s on special for $7.99. It doesn’t make sense to me that they say it’s on special at that price,” testifies Michel Chevalier, a 78-year-old retired electrician who The Journal met in a Montreal shopping center this week.

“The prices are so high that it’s expensive even when it’s on special,” he adds.

Remember that for three years, from 2021 to 2023, the rise in prices exploded all over the world, a consequence of supply problems caused by the pandemic, according to economists.

In Quebec, the inflation rate peaked at 6.7% in 2022. However, before 2021, it had never been higher than 3% for 30 years.

20% increase

Result: since September 2020, the prices of products and services have jumped, overall, by nearly 20% in Quebec. The increase is even greater for food (at the grocery store and in restaurants): it exceeds 25%.

No wonder consumers still take the plunge when they shop.

“There are a lot of people who would like prices to fall,” notes Benoit Durocher, economist at Mouvement Desjardins.

“But prices are not falling, they are only rising less quickly and I think that greatly explains people’s perception of inflation,” he continues.

As proof, Canadians currently estimate that the price increase amounts to nearly 5%, according to a survey by the Bank of Canada. But in fact, inflation barely reached 1.6% in Canada and 1.3% in Quebec in September.

Habit changes

Official figures show that, in general, wages have increased at a faster rate than inflation. But obviously, this is not the case for everyone. For example, the situation is difficult for many young homeowners who have seen their mortgage payments skyrocket.

“At Option Consommateurs, we now see people with family incomes of $100,000 or more, people who are very indebted and who have difficulty adjusting their consumption habits,” underlines Carlos Castiblanco, economist for this organization.

To rebalance their budgets, many households have chosen to cut non-essential services such as landscaping or snow removal, he says.

Ulrike Malmendier, a professor at the University of California, Berkeley, has studied the long-term impacts of economic upheaval. She discovered that episodes of high inflation could leave “scars,” enough to change the behavior of some consumers for long periods, the report recently noted. Wall Street Journal.

In short, we haven’t finished seeing BMWs at Maxi and Dollarama.