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!
Compare top savings accounts - last updated 27 April 2024
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Mozo experts choice awards won:
- Kick Start Savings - 2024
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 . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
CompareCompareHigh Interest Savings Account
Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.
- Maximum rate
- 5.75% p.a. (for $0 to $250,001)
- standard interest rate
- 4.40% p.a.(for $0 to $250,001)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- 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.
- Access
- Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the High Interest Savings Account
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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.
CompareCompareReward Saver Account
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.
- Maximum rate
- 5.25% p.a. (for $0 to $1,000,000)
- standard interest rate
- 0% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- 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.
- Access
- ATM, EFTPOS, Visa Debit, Cheque book, BPay, Branch access, Phone banking, Internet banking, Bank@Post
- Minimum balance
- $0.00
- Other restrictions
- -
Read our Mozo Review to learn more about the Reward Saver Account
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Mozo experts choice awards won:
- High Interest Savings - 2024
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.
CompareCompareAMP 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.
- Maximum rate
- 5.40% p.a. (for $0 to $250,000)
- standard interest rate
- 1.20% p.a.(for $0 to $5,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Ongoing total variable bonus rate of up to 5.40% per annum applies if customers deposit $1,000 in the previous month. Available only on balances up to $250,000.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Ongoing total variable bonus rate up to 5.40% p.a. is earned on the balance the month after you deposit $1,000 and is paid the following month, on balances up to $250k. Max balance per customer name is $5 million.
Read our Mozo Review to learn more about the AMP Saver Account
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Savings+Bonus
5.00% p.a. (for $0 to $250,000)
2.00% p.a.(for $0 to $250,000)
Yes up to $250,000
Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
CompareCompareSavings+Bonus
Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.
- Maximum rate
- 5.00% p.a. (for $0 to $250,000)
- standard interest rate
- 2.00% p.a.(for $0 to $250,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $5.00
- Maximum rate conditions
- Minimum $100 monthly deposit and no withdrawals to earn bonus interest each month.
- Access
- -
- Minimum balance
- $1.00
- Other restrictions
- Must become a First Option Bank member to open an account.
Read our Mozo Review to learn more about the Savings+Bonus
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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.
CompareCompareSavings Account
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.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first four months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Savings Account
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