Will food, electronics weigh heavily on your wallet in 2012?

Consumers saw prices rise in 2011, in some cases alarmingly, but limited inflation should help to keep sticker shock at a minimum this year.

A check of the Yahoo! Canada shopping list shows consumers may have something to smile about when it comes to food and gadgets.

FOOD PRICES

Food prices could increase by about 2 percent this year, in line with inflation. "We are not expecting declines … but less upward pressure," says Royal Bank of Canada Economist Nathan Janzen. That will be welcome news, since Canadians paid 5.7 percent more for food in the year ending November 2011, according to Statistics Canada.

Two University of Guelph professors, Sylvain Charlebois and Francis Tapon arrived at the same conclusion in their study entitled Food Index 2012. They project increased prices for meat, vegetables and baked goods at 3 percent with zero increases for other staples, producing a 2 percent average increase. "You'll have staples or (other) products that will probably remain the same — flat," explains Prof. Charlebois, acting dean at the University's College of Management and Economics.

Continuing competition between grocery chains will also work to keep further increases in check, whether through normal pricing or continuation of seemingly endless special promotions.

Recent reports of skyrocketing orange juice futures are a non-starter in Canada, in Charlebois' estimation. The surge followed a Florida frost and announcement by the United States Food and Drug Administration that it had received a tip about the presence of fungicide in Brazilian orange juice. In a letter to the Juice Products Association, the FDA stated that it does not plan to remove orange juice from the market but will carry out its own testing.

CONSUMER ELECTRONICS

Consumer electronics prices will continue dropping, according to Duncan Stewart Director of Technology, Media & Telecommunications Research at Deloitte Canada.

While parents being coaxed by youngsters might disagree, figures from Statistics Canada bear out the trend. Between November, 2010 and November 2011, prices declined for commercial computers by 15.4 percent and consumer computers by 8.6 percent. Monitor prices decreased by 2.5 percent and printer prices fell by 3.4 percent.

The drops result from several factors including competition, supply chain efficiencies and what electronics specialists call Moore's Law, Stewart explains. Named for Gordon Moore, co-founder of Intel Corporation, the 'Law' teaches technology storage capacity of doubles every 18-24 months, another factor contributing to lower prices. "It means that the price curve has been working really well," Duncan explains, adding that these factors have been in place for a decade and show no sign of abating in the near future.

Al Emid is an author and financial journalist covering investing, banking and insurance. The opinions expressed are his own.