Honey, I shrunk the groceries! How to beat high costs and poor value
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!
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Savings Account
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Bonus variable rate is available for the first 4 months.
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
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Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
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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.
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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.
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- Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.
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Savings Maximiser
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Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
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Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
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- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
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Growth Saver Account
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Grow your net balance by at least $200 (excluding interest) and make no more than one withdrawal in the month.
Grow your savings goals with no monthly account keeping fees to pay. To get the bonus interest simply grow your net balance by at least $200 a month (excluding interest) and make no more than one withdrawal during the month. No debit card, ATM, eftpos or personal cheque access with this account Suncorp Bank (Norfina Limited ABN 66 010 831 722 AFSL 229882 Australian Credit Licence 229882). The SUNCORP brand and Sun Logo are used by Suncorp Bank (Norfina Limited) under licence and Suncorp Bank is not part of the Suncorp Group.
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Grow your savings goals with no monthly account keeping fees to pay. To get the bonus interest simply grow your net balance by at least $200 a month (excluding interest) and make no more than one withdrawal during the month. No debit card, ATM, eftpos or personal cheque access with this account Suncorp Bank (Norfina Limited ABN 66 010 831 722 AFSL 229882 Australian Credit Licence 229882). The SUNCORP brand and Sun Logo are used by Suncorp Bank (Norfina Limited) under licence and Suncorp Bank is not part of the Suncorp Group.
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Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
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^See information about the Mozo Experts Choice Savings Account Awards
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