Honey, I shrunk the groceries! How to beat high costs and poor value

Woman shopping at the supermarket
Image: Getty, shopping at the supermarket

Inflation ‘expectations’ are at 5.0% for the month of February, the lowest monthly inflation figure since January 2022 (4.9%), as per data from Roy Morgan.

In short, inflation has stabilised since last year and if you look at any graph representing inflation over the last few years, there’s a notable downward trend compared to back in 2021. So that’s good.

And yet everything is still rather expensive, isn’t it? 

Well the drop in inflation, or the slowing down of price hikes, doesn’t necessarily mean prices will come down. Many of those factors you so often hear about in the news - global demand for goods, supply shortages, oil prices and higher global interest rates - all continue to impact our cost of living

High prices are one thing: dealing with lower value is another. This phenomenon has been in the headlines a lot lately and is often called ‘shrinkflation’ by economists.

What’s in the box? Shrunken shopping 

Shrinkflation can feel like a punch in the gut because it assumes consumers will continue to pay the same price for much less. It doesn’t take into account our expectations and, in fact, changes them without too much warning. 

This is an issue because we tend to count on our shops to offer fair prices, or at least a variety of price points. We hope we’re not getting ripped off. But now things feel a bit different. 

Be it cereal, chips, biscuits, washing detergent or household cleaners, most of us like to think the price is fair for the quantity purchased. Even if it’s just a cursory glance at the packet or box to get a sense of how much is in it, nobody likes the idea of forking over hard earned money for less than we got before.

This is why shrinkflation doesn’t seem right - there’s something sneaky about it. 

Can we measure shrinkflation?

The good news is that at least we’re all more aware of the practice now and official data collectors such as the Australian Bureau of Statistics (ABS) also factor it in their Consumer Price Indexing (CPI). 

The ABS notes where the quantity (or volume) of a product falls but the price remains the same, and it calculates the adjusted price as a percentage. 

So if a soft drink remains at $3.00 for some time but the volume of drink drops, a “quality adjustment” needs to be made and this change is included in the CPI. 

Who’s responsible for shrinkflation?

The blame goes around too much on this, sometimes squared at your favourite supermarket, other times at the food supplier, and in some cases at the source - the farm, manufacturer or factory. For example, you might have seen a report about the cost of cocoa skyrocketing, which is subsequently driving up our chocolate prices. And who’s to blame here? A lot of rain, apparently. 

Ultimately at the checkout, we as the consumer haven’t got time to worry about who’s responsible - at this point we’re still just trying to fight off the high cost of living monster.

So, while the Australian Competition and Consumer Commission looks into this ongoing mystery, what else can we do?

Well, one of our favourite things to do at Mozo of course, is to compare! When you’re next in the aisle trying to avoid the temptation to buy another packet of double-choc biscuits, pick up an item you’re interested in and compare it with another. 

Are the contents lighter? Is one packet or box a little more expensive? Are there fewer units (crackers, sponges, olives - whatever) inside?

Even a different label or type of packaging can be a give away that something’s changed with your regular purchase. Sometimes nothing much changes - other than the box housing your goodies which has seemingly shrunk in your hands!

Saving money with better grocery deals

There’s something else you can do: buy a cheaper version of your need-to-have goodies, or even seek out alternatives at local shops or markets. 

For example, I recently discovered a small farmers market near my home where I can buy two heavy bags of organic truss tomatoes, around a kilo each, for about $19.

Now you might find a similar price at your local supermarket, though it will depend on the tomatoes. The point is, I usually see little punnets of similar tomatoes for around $5 or $6 and I’d need at least four of those to match my two market bags of fresh organic produce.

This is just one little example. Obviously if you have a favourite packet of biscuits or chips, you’re unlikely to find those at the farmers market. Still, there are typically alternatives on supermarket shelves that can offer more bang for buck. 

For instance, there are some pretty good chocolate options nowadays, despite the higher premium placed on cocoa. As I say, price is one thing. But many of our favourite brand name chocolate bars look suspiciously smaller now - surely victims of this ongoing shrinking phenomenon. 

If you’re looking to take your money further and improve your budget, a solid savings account can help. Our Mozo experts compare some of the best savings products on the market. Start comparing below!

Compare top savings accounts - last updated 27 May 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account. No Account keeping fees. No minimum balance. Support Aussie farmers with every dollar you save.

    Compare
    Details
  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

    Compare
    Details
  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend, Bills or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.

    Compare
    Details
  • Mozo Expert Choice Badge
    AMP Saver Account

    5.40% p.a. (for $0 to $250,000)

    1.20% p.a.(for $0 to $5,000,000)

    Yes up to $250,000

    Enjoy a bonus rate when you deposit at least $1000 per month with the AMP Saver Account.

    No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.

    Compare
    Details
  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

    Compare
    Details