Here’s Why You Pay More For These 5 Items, According To Experts

As you’ve probably noticed, a lot of things are expensive right now. CBC News looked at the cost of five items people buy regularly and spoke to business owners and industry experts to find out what’s behind the spike in prices.

Baked goods

Purebread co-owner Mark Lamming says the retail price of the raspberry white chocolate scone has gone up about 5%, while the actual cost to manufacture the item has gone up almost 18%. (Radio-Canada News)

Mark Lamming, co-owner of Purebread bakery in Vancouver and Whistler, says their raspberry white chocolate scone is now $5, up 5% from its previous $4.75, while the cost to make has increased nearly 18%.

People may be paying more for their favorite treats because of ingredient prices, he says, which have risen about 10 to 15 percent each month for the past two years. The price of flour, for example, has increased by 70%, he adds.

“It just seems like the supply chain is really under pressure and demand has come back more quickly,” Lamming said.

Japanese bakery Kanadell in Vancouver also raised the price of its baked goods this month, says owner Keiko Nakanishi, as flour, eggs and butter are now more expensive.

According to Tony Llewwellyn, sales manager at Snow Cap Enterprises Ltd., the prairie drought last summer devastated wheat crops, reducing supply and driving up the cost of flour. Snow Cap is a BC-based food distribution company that Purebread and Kanadell source most of their ingredients from.

Dairy products are also more expensive as the cost of feeding livestock has increased, adds Llewwellyn.

Although the company mainly sources products from British Columbia, it sometimes sources products from other provinces or outside the country. When this happens, transportation costs, including fuel surcharges and service charges, also drive prices up. Llewellyn says he’s seen a roughly 200% increase in shipping costs from North America and Europe, forcing companies like Snow Cap to pass the costs on to small business owners.

“There is nothing wrong with the company, but now is not the time to charge these substantial tariffs,” he said, adding that there should be more government regulation on fees. invoiced by transport companies to avoid price abuse.

Furniture

The cost of using shipping containers, which help deliver raw materials to make sofas, has increased dramatically, says Rick Ripoli of Stylus Made to Order Sofas, which has also driven up the cost of furniture, such as sofas. canapes. (Radio-Canada News)

In January, Rick Ripoli of Stylus Made To Order Sofas spoke to CBC about the challenges furniture companies are facing, including rising material costs, supply shortages and longer wait times for the arrival of items.

Things haven’t changed, he says. Before the pandemic, a shipping container of raw materials from Asia cost around $1,800 in Ripoli. In March, he paid $15,000.

Trevor Heaver, professor emeritus at the University of British Columbia’s Sauder School of Business, says a surge in purchases in 2021 is partly to blame for the massive increase in shipping container costs.

Heaver says North American ports became very congested because workers on the ground could only work very quickly.

“So it’s not just about how fast you can unload the ship, but how fast you can move boxes of goods from one terminal to another and how many hours you’re open warehouses to receive the boxes and the capacity they have to empty and return the boxes,” he said.

Raw materials have also become more expensive, according to Ripoli: polyurethane foam, which is used to stuff sofas, is a petroleum product, and as the price of petroleum has risen, the cost of the foam has also risen.

“Where the price increases were 3 or 4%… [now] it’s still a double-digit increase,” he said.

Used vehicles

According to AutoTrader.ca, the average price of a used Honda Civic — a popular used car option — has increased 41.7% over the past two years in Canada. (Radio-Canada News)

According to data from AutoTrader.ca, the average price of a used Honda Civic, a popular option for used car buyers, increased by 41.7% between February 2020 and February 2022.

Meanwhile, the average price of a used vehicle in British Columbia is over $40,000, the company said, a 32% year-over-year increase.

Baris Akyurek, director of marketing intelligence at AutoTrader.ca, says analyzing buyer habits has led to a few theories.

One potential reason is health and safety, he says: people no longer want to take public transport or ride-sharing services and buy their own vehicle instead.

“Now that things are opening up…we think some of that pent-up demand has started to come true,” he said.

A weak supply of new cars is another factor. Akyurek says continuing problems with manufacturing microchips, which control functions inside the vehicle, mean fewer cars are being made globally.

Once new vehicle production returns to normal, he expects prices to stabilize again.

flowers

Blossom and Vine Co. owner Michelle Hodgson says prices for both imported and local flowers have risen since the start of the pandemic, due to a combination of reduced production and increased demand. (Radio-Canada News)

At the start of 2020, the average bouquet cost between $35 and $40, says Michelle Hodgson, owner of Vancouver-based Blossom and Vine Co. Now expect to pay upwards of $50 for the same bouquet.

Prices for roses and carnations, often imported from South America, have risen about 40% over the past two years, she says.

Meanwhile, locally produced flowers – chrysanthemums, snapdragons, tulips, peonies – have also become more expensive as demand from local businesses has also increased.

Hodgson adds that many growers around the world have had to shut down or scale back production during the pandemic.

“So we are still seeing the effects of the decisions that were made at the start of the pandemic affecting our supply today,” she said.

According to Bridgitte Anderson, CEO and Chair of the Greater Vancouver Board of Trade, many of the organization’s member companies are grappling with these costs, as well as labor issues such as staff retention.

She says rising costs and inflation are not giving businesses many options, forcing them to raise prices to keep operating.

“We really see it in all areas, whether it’s small or medium-sized businesses,” Anderson said.

Construction wood

University of British Columbia forestry professor John Innes said when home construction and renovations boomed in 2021, demand for lumber also increased, which was already in short supply. (Radio-Canada News)

The nonprofit Habitat for Humanity is building 19 homes in Mission, B.C., and the cost of building them has risen dramatically, according to Steph Baker, interim CEO and vice president of construction.

Baker says the cost of the lumber exceeded his original budget by 35%, or about $114,000 in additional costs.

“It impacts our ability to build affordable homes,” she said.

The nonprofit organization also operates ReStores – stores that sell new and used items, including home decor items and building materials.

But donated wood products like lumber and furniture are hard to come by, Baker says.

“He left the same day he fell on the ground.”

John Innes, a UBC forestry professor, says the price of timber has fluctuated “wildly” in recent years for a variety of reasons, including pandemic restrictions that halted production for many BC businesses in 2020.

There was also the belief that year that there would be a reduction in home building in the United States, he adds, which would cause companies to produce less lumber.

In British Columbia, postponements of old-growth logging have reduced the area companies are allowed to harvest, while invasive bark beetles – which feed on trees – and wildfires have made it difficult to supply wood. of good quality.

“The amount of lumber available is getting tighter and as a result prices are going up,” Innes said.

Will this continue?

Andrey Pavlov, a professor of finance at Simon Fraser University, says he thinks companies will eventually start producing more items, which will level out prices.

But he also says governments should facilitate the production of goods in Canada so that the economy is not vulnerable to global forces.

“Especially for smaller economies like Canada, it’s very important to be competitive and create business conditions where local businesses can undertake more manufacturing,” Pavlov said.

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