Monthly grocery spending drops below $250: StatCan

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This article was published 03/04/2024 (891 days ago), so information in it may no longer be current.

Statistics Canada has reported a major shift in Canadian consumer behaviour, with the average amount spent on retail groceries in January dropping below $250 per month — a 19 per cent decrease from January 2021.

Researcher Sylvain Charlebois said several factors could have contributed to such a sharp decline in grocery spending.

“The sting of high inflation over the past year has made many of us more cautious with our spending, leading to a hunt for discounts and more affordable alternatives,” Charlebois told the Sun. “The cost of living continues to climb, especially with housing and energy expenses, (and) many families are finding it necessary to tighten their belts, with grocery budgets often being one of the first areas to feel the squeeze.”

The Dalhousie University professor added there’s a growing trend toward value-based shopping, focusing on essentials, bulk buying and opting for generic products over pricier brand options.

In smaller communities like Brandon, where local food retailers and producers play a vital role in the economy, he said, the shift in spending habits could have significant implications, with reduced consumer spending leading to decreased sales volumes and potentially impacting profitability.

To mitigate these challenges, Charlebois emphasized the importance of local retailers and producers understanding and responding to consumer preferences, offering competitive pricing and highlighting the quality of their offerings.

At the same time, he said, the agri-food sector must adapt by diversifying their product ranges to include more budget-friendly options. Embracing e-commerce and online marketing, he added, can also provide opportunities to reach a broader audience.

Brandon-based financial analyst Femi Afolabi, on the other hand, said he finds the Statistics Canada data unconvincing.

“I find it difficult to align with Statistics Canada’s assertion that the average Canadian spends $250 monthly on retail groceries because many individuals, including myself, consistently exceed this figure in their monthly expenditures,” Afolabi told the Sun. “While Statistics Canada’s report may not be inaccurate, it’s crucial to recognize the complexity of post-COVID-19 challenges in 2021, which have significantly influenced consumption patterns, disposable income and government spending.”

He cautioned against relying solely on skewed statistical data, adding it would be beneficial to conduct a thorough month-on-month and year-on-year comparison, accompanied by a comprehensive trend analysis of key retail grocery items on a province-by-province basis, taking into account the unique characteristics of each region.

“This detailed trend analysis would illuminate the progress made in each province between January 2021 and January 2024, offering valuable insights into the specific challenges and successes experienced by each region,” he said.

“While fluctuations in retail grocery spending may indeed occur, it is imperative for the government to proactively develop economic mechanisms that enhance citizens’ quality of life, generate employment opportunities and reduce expenditures. By bolstering individuals’ economic empowerment, we can strive towards achieving a higher standard of living comparable to that of other leading nations.”

Brandon resident Sifawu Usikalu shared her personal experience, illustrating how macroeconomic factors intersect with everyday financial realities for Canadian families.

“My groceries have significantly increased between 2021 and now, with over a 100 per cent rise in pricing,” Usikalu told the Sun. “I have been able to manage the situation by cutting some of my other expenses to accommodate the increase in grocery pricing, and also my monthly savings have been greatly impacted as I now put less money in my savings/retirement accounts.”

She attributed the price hike to global inflation following the COVID-19 pandemic.

Another resident, Olufunmilayo Eretan, echoes Usikalu’s sentiments, highlighting the substantial increase in grocery prices over the past two years.

“Grocery prices have increased tremendously with disparities in inflation rates among provinces,” Eretan told the Sun. “Two years ago in Prince Edward Island, the prices were so high that I couldn’t buy some items. Now, in Manitoba, we’re facing similar inflation in almost every necessity.”

She explained how essential items, such as canola oil and rice, had experienced significant price hikes over the past two years in Manitoba and highlighted concerns about the diminishing quality and quantity of some products, prompting consumers to purchase more frequently.

“Overall, the rising costs of groceries have affected every family,” she said. “Some items that have maintained their old prices have seen declines in both quality and quantity, further exacerbating the financial strain on households.”

Charlebois said the shift in spending habits also presents an opportunity for innovation and diversification in our agricultural community.

“There’s a growing appetite for healthy, sustainable and locally sourced foods,” he said. “Focusing on niche products like organic produce, plant-based alternatives and artisanal goods could meet this demand and add value.”

He added that exploring direct-to-consumer sales channels, such as farmers’ markets or subscription boxes, can directly link consumers and potentially increase profit margins.

» aodutola@brandonsun.com

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