Indeed, grocery price inflation jumped to 3.8% year over year, its highest pace since December 2023 and about a

percentage point above the long-run median, noted the bank.

Meanwhile, restaurant inflation has snapped back up to pre-sales-tax-holiday rates and is in line with historic norms, pointed out BMO.

In the grocery aisle, some of the upside drivers include

beef (+16% year over year), coffee (+15% year over year) and confectionery (+10% y/y).

It's likely that tariffs played a role, with some support from early-year weakness in the Canadian dollar (CAD or loonie), stated the bank.

It remains to be seen how long this upside pressure will persist in grocery prices, which remain highly visible to consumers, added BMO.

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