Financial food fight
Grocery prices continue to soar but experts have cash-saving tips
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Forget the battle of the bulge.
A new war is being waged daily by consumers at the grocery store as they grapple with slimmed down budgets in the face of increasingly hefty prices in what feels like a new normal of high inflation and rising interest rates to tame it.
“It’s really a perfect storm,” says Dr. Sylvain Charlebois, director of the agri-food analytics lab at Dalhousie University in Halifax.
As many families feel the pinch of higher debt costs, they have fewer dollars to spend at the grocery store — a situation further exacerbated by higher prices for the food they need to buy.
“If you look at people’s mortgages that have variable rates, those with a $300,000 mortgage, for example, are paying about $6,000 more than last year.”
At the same time, grocery prices have been the fastest rising goods and services, according to the Consumer Price Index — which the Bank of Canada uses as a key metric in determining whether to increase interest rates to slow inflation.
“Food is now typically a little over $1,000 more that you have to spend this year than last year,” says Charlebois, referring to a forecast from a report he co-authors annually, Canada’s Food Price Report.
Released late last year, it forecast a basket of groceries will increase five to seven per cent this year over last.
While an improvement over the past year for Manitobans when, according to CPI, food prices collectively jumped nearly 11 per cent, consumers are still likely to struggle to pay for food.
And they’re looking for answers.
Of course, an easy target has been grocers, accused of price gouging. But Charlebois says a close examination of their financial statements show the margins on food at grocery stores have remained relatively thin as in years past.
“So how do grocers make their profits? They sell lipsticks, T-shirts and pharmaceuticals,” he says, noting those have higher margins.
Yet the accusation of price gouging persists because it’s easier to understand than the incredibly complex reasons behind rising food prices, Charlebois says.
“The average grocery store carries about 20,000 different products, and each one has its own pricing story.”
He further points to factors from supply chain problems to the war in Ukraine and higher energy prices to labour shortages and climate change — to name a few among many.
Of course, rising food prices are also a hot-button political issue.
“And when you politicize an issue, you send out cheques,” he adds. “Cheques are sexy and people think they’re being helped, and they are but only for a very short period.”
Government subsidies aside, consumers can also arm themselves with knowledge.
First, you can shop at the cheapest grocery store to keep things simple, and moneyGenius, an online personal finance site, did a survey for consumers to find the least costly store. While the data is based on Southern Ontario, some likely still applies here, says moneyGenius managing editor Kalleigh Lane, who compiles the annual report.
“Simply put, Walmart has the cheapest prices for food items 66 per cent of the time, but No Frills is the second cheapest, followed by (Real Canadian) Superstore,” she says.
The report found the average price per item of a 30-item cart at Walmart was $8.59 compared with $8.96 at No Frills.
“When totalling up the price of a cart of all the products, Walmart’s total was $257, and No Frills was $268.”
Lane says the study does not include sales, the benefits of rewards programs and coupons, all of which can help level the playing field between stores.
As well, many grocery stores offer price matching, says a Manitoba-based, coupon savings expert who is popular on social media. Nichole Schaubroeck in Domain, about 20 minutes’ drive south of Winnipeg, goes by the social media handle Coupon Cutie, and has hundreds of thousands of followers on TikTok and Instagram among other social media platforms.
She suggests downloading an app called Flipp, which is designed to help you price match items.
“So, for example, you search ‘Kraft Dinner’ and it will bring up all the flyers that have it on sale, and you just show that flyer on the app to the cashier at Superstore, who will enter the lower price for you,” she says.
Another handy app is Flashfood — available at No Frills and Superstore.
“Let’s say pork chops are 50 per cent off,” she says. “You buy it through the app and go to the store to pick it up.”
While important to plan meals and have shopping list ahead of time, Schaubroeck recommends being flexible while shopping.
“For example, if I can get a box of crackers by price matching and using coupons, or a rebate, I will buy those crackers instead of higher priced granola bars.”
Beyond apps and coupons, Winnipeg food economist Getty Steward says families should look to stretch the food they already have.
“It’s about thinking about meal planning that starts with the question: What’s in the fridge and cupboards that we can use this week?”
It’s likely the average Canadian household has a lot of food that could be used more efficiently, given the average family loses about $1,300 annually to food waste.
Given the average family is set to spend $1,000 more on food in 2023, Stewart notes many could make up for some of that increase by focusing on making the most of what’s in their cupboards, freezers, pantries and fridges to create as many meals from overlooked items as possible.
“In a way, it’s much more reminiscent of how our grandparents used to eat, looking for discounts and using the food we have to go as far as possible to reduce waste and help save money.”