Asian grocery stores in B.C.'s Interior battle rising wholesale costs

Consumers across B.C. have been facing higher grocery costs in the wake of the pandemic, but smaller grocery stores in the B.C. Interior specializing in food imported from Asia say it's especially true of them.

Brian Chang owns and operates Marquee International Food and Gifts, a boutique shop in downtown Prince George that sells food and drink products shipped mainly from countries like China, Japan, South Korea, Vietnam and Malaysia.

He says his wholesale costs have risen 15 to 20 per cent over the last year and a half — and he expects an increase of more than 10 per cent in 2023, based on what he's seeing from suppliers in B.C.'s Lower Mainland.

"It's not good," he told CBC's Betsy Trumpener. "There's only so much a small business can absorb. It's unfortunately slowly inching up."

Last month, Statistics Canada reported that the consumer price index dipped to 6.9 per cent in September, down from seven per cent in August, but the retail price of food was up 11.4 per cent, a figure not seen since August of 1981.

Competition with Lower Mainland retailers

Sunny Sun (孙东), the owner of Sun Asian Market near downtown Kelowna for eight years, agrees that he has never seen the cost of food go up so much so quickly in three decades of international trade between Canada and China, where he emigrated from.

Sun attributes his rising wholesale costs over the past two years to several factors, including more expensive gasoline, delayed shipping from Asia under COVID restrictions and other supply chain disruptions from damaged roads linking the Okanagan to the Lower Mainland, where his suppliers are based.

But he says fierce competition with retailers in the Lower Mainland — where the Asian clientele is much larger than in the Okanagan — has also forced him to buy Asian imports at a higher price.

"It has been a challenge over the past two years for retailers in the Interior region to source products.

"I have to buy products and transport them to the Okanagan soon after each container arrives in Vancouver because if I don't buy anything until the next container comes in, retailers in the Lower Mainland will take them all away," Sun said in Mandarin.

Richmond Chamber of Commerce president and CEO Shaena Furlong says the steep increase in prices of Asian-imported food has largely been due to ballooning ocean freight costs over the past two years, from about $3,000 per container pre-pandemic to $16,000 this year.

She adds that lower-valued goods, such as rice and noodles, have been particularly affected.

"It simply isn't economical to spend the cost of shipping [if it's] more than the wholesale value of the product inside the container," Furlong said. "So we're seeing shortages in some of those products right now, and of course, once demand outstrips supply, we see those huge price increases."

Stockpiling products to beat rising costs

Sun says his wholesale costs have increased every two weeks, a predicament that Chang says he has also been facing.

That's why he has been stocking up on products, particularly non-perishable ones such as instant ramen noodles, as a hedge against rising costs.

"We just buy more of [the products] because the next time we order it, the prices are going up."

To tame inflation, the Bank of Canada has raised interest rates six times since March — from 0.25 per cent to 3.75 per cent — but it has warned it's not done yet.

Chang says his small business hasn't reached a point it can no longer sustain, but he has noticed many customers are frustrated with the rising prices.

Sun says he is still optimistic, because inflationary prices for food from China, Japan and South Korea are lower than in Canada, and his clientele has been growing and is no longer limited to Asian Canadians.

"We have established a good reputation through word of mouth among non-Asian Canadians in the local community, so we're in good shape."