Spending more than $100 a week on groceries? It might be time to forego the black label products. An overwhelming majority of Canadians are planning to tighten their belts – and their budgets – in light of rising food prices, according to a recent RBC Canadian Consumer Outlook survey.
Higher Prices Lead to Frugal Decisions
While 84 per cent of Canadians say the food they typically buy has jumped a bit in price, 91 per cent have plans to make smarter decisions when it comes to saving on food costs.
“In light of concerns over escalating food prices, more Canadians are looking for cost-saving strategies they can use on their next trip to the grocery store,” says Jason Round, head of Financial Planning Support at RBC Financial Planning. “Creating a budget that covers all of your expenses – including must-haves such as groceries – can help keep your spending under control.”
Round adds that saving requires more than just making a plan.
“It’s essential to regularly review your budget to stay on track and make any adjustments necessary to help balance living for today and saving for future goals.”
Biting Into Food Budgets
According to the poll, Canadians spend around $411 a month on groceries.
A third of those surveyed say the rising costs of food have had a significant impact on their overall budget, with 43 per cent cutting back elsewhere in their expenditures to accommodate the rise.
The study also pointed to the changing shopping habits of consumers. The thrifty ones of the bunch have turned to comparing similar products from different brands and rigorously sticking to the budget to avoid straying towards impulse purchases. Fifteen per cent have even pointed to using their car a bit less to save a cash via gas money.
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A Growing National Issue
Food inflation has been an ongoing concern for Canadians. Last year, prices rose 2.4 per cent, after increases of 3.8 per cent in 2011 and 1.4 percent in 2010.
A RBC Economics report put out last year pegged an increase of three to four per cent this year in light of last year’s crippling drought in the U.S. It takes about six months or so for the effects to ripple through the market.
However, Paul Ferley, assistant chief economist at RBC, is more optimistic.
“Even though we are seeing rising food costs, overall inflation should remain below two per cent in 2013,” he says. “We are in an environment of modest growth, so pressures from rising food prices won’t dominate inflationary expectations.”
How to Counter Your Food Costs
There are plenty of ways to remain savvy despite rising food prices, from eating more seasonal and local vegetables and grains to taking your lunch to work and avoiding spending money eating at restaurants.
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