How Has Your Food Spending Changed During The Pandemic?
The Consumer Price Index (CPI) measures changes in prices paid for a basket of goods and services (i.e., inflation). For the past three decades the Bank of Canada has successfully targeted an inflation rate of between 1% and 3%. The latest figures show year-over-year inflation at 1.9%.
But as you know, our personal inflation rate can vary widely from the basket of goods and services used to measure CPI. There are eight major categories, which include:
- Food
- Shelter
- Household operations, furnishings and equipment
- Clothing and footwear
- Transportation
- Health and personal care
- Recreation, education and reading
- Alcoholic beverages, tobacco products and recreational cannabis
We’re going to focus on the food category. Covid-19 has had a major impact on food spending and consumption in Canada. Before the pandemic, 62% of personal food consumption was purchased at retail grocery stores, and 38% was consumed outside the home.
At the beginning of the pandemic, food spending and consumption shifted to 91% retail grocery and just 9% of food spending outside the home. This makes perfect sense, as many businesses closed, and people stayed at home as much as possible. This immediate shift in spending also resulted in disruptions to the supply chain and shortages of items like toilet paper and bread flour.
As lockdown restrictions eased in the summer and into the fall, we’ve seen food spending shift again to 75% retail grocery and 25% dining out.
Food Inflation and Changes in Consumption
Food inflation has trended higher than the CPI for many years. What can we expect as we head into 2021? According to a report issued by Dalhousie University, University of Guelph, University of Saskatchewan and University of British Columbia, Canadian families can expect their household food bill to increase by more than 5% next year.
“Canada’s food inflation index has outpaced the general inflation index over the last 20 years, and that trend is likely to continue for a while,” the report said.
source: tradingeconomics.com
The report indicated the premium for consuming food outside the home is between 40-45%, so even though prices at the grocery store have increased, overall household food spending may be lower if more people are buying groceries instead of dining out.
In a recent episode of the Stress Test podcast, co-hosts Roma Luciw and Rob Carrick looked at how Covid-19 has shifted out food spending. Two areas they focused on was the rise of meal kit delivery services like HelloFresh and Chefs Plate, and the growth of online grocery shopping and delivery.
Roma tried one of the options and wasn’t overly impressed, saying the portions were small, the price per person was high, and that the kit came with an uncomfortable amount of plastic packaging. The main benefit is saving time figuring out what to make for dinner, although you still need to prepare the meal yourself.
Rob wasn’t a fan of online grocery shopping, saying he’d prefer to pick out items himself rather than relying on a grocery picker to find the best produce and cuts of meat. He was also concerned about the grocery picker substituting other brands or similar items that may not be desirable.
My Personal Food Inflation and Consumption
The pandemic has certainly impacted our food spending as well. We weren’t big spenders on dining in the first place, but our spending on food prepared outside the home has decreased by 26% this year. Meanwhile, our retail grocery spending is up 7%.
As a percentage of our household food bill, groceries make up more than 86% of that total, which is up from 81% last year.
| Grocery increase | Dining increase | Groceries % of Food | Dining % of Food | |
|---|---|---|---|---|
| 2020 | 7.01% | -26.03% | 86.35% | 13.65% |
| 2019 | 19.09% | 22.01% | 81.39% | 18.61% |
| 2018 | 0.01% | -17.62% | 81.76% | 18.24% |
| 2017 | 16.36% | 11.24% | 78.48% | 21.52% |
| 2016 | 12.50% | 2.97% | 76.15% | 23.85% |
The biggest change in our food spending during the pandemic has been in the way we purchase groceries. Almost all of our grocery shopping is now done online (and delivered) through Save On Foods and Spud.ca.
We definitely pay a premium for this service, not just in extra delivery charges but we’re less apt to find a bargain in store. On the other hand, when shopping in person I tend to wander the aisles and pick-up items that aren’t necessarily on the grocery list.
The advantage of grocery shopping online, outside of limiting my trips outside of the house, is saving time. It takes 10 minutes or so to complete an order online, versus the hour or more spent driving to and from the store, shopping, and waiting in line at the checkout. That’s more time I can spend working on my business or hanging out with my family. A good trade-off.
I’ll concede to Rob’s point that we don’t always get the best selection of produce, and sometimes items are substituted or end up being out of stock.
We have yet to try a meal delivery service (despite the constant barrage of flyers in our mailbox). I agree with Roma’s concerns about getting value for the meal kit – small portions and a high cost per person. Plus, we’re not busy professionals working outside the home and pressed for time. We both work at home.
Finally, our family switched to a vegan diet (no meat, eggs, or dairy) last fall. While I expected a decrease in our household food bill over time, so far that hasn’t been the case. I suspect this is because we spend more on good quality produce, plus meat and dairy substitutes tend to be more expensive alternatives. No, we don’t just live on rice and beans.
That said, our diet doesn’t lend itself to meal delivery services or to dining out that often. That’s fine. We’ve found great recipes and we love to experiment with new dishes by cooking at home. I expect our food spending and consumption will continue to stay in the 85-15 ratio of retail grocery to dining out.
How has your food spending changed this year?
What’s changed for me is that I used to shop at multiple places based on price or availability of items. Now, when I go out, I get most things from whatever single store I decide to go to. Cost is definitely up. That said, I am also buying a few more household items on Amazon because some of the main grocery chain items are just ridiculously priced.
We try to shop at only one supermarket such as Superstore where they price match and accept deals from other stores that are on the flipp app. Works well and we avoid being out at multiple locations saving time and money.
That’s what we are doing too… mainly shopping at No Frills and price matching!
Our spending habits align with the reports; 90% groceries/10% dining out in 2020 compared to 72%/28% in 2019. As a result our YTD food costs have dropped by 10% (family of two). Since we are buying more groceries online the expensive bulk meat purchases from Costco have dropped. Unfortunately we have spent a lot more in the junk/comfort food category. We also spent more stocking up with non-perishables early on in the pandemic. Online ordering has worked out well and while I was initially leery at having someone else pick out my produce, overall I have been satisfied with the selection. But I miss going out shopping, particularly as I am now retired at it was something to do.
We had two months (mid-March to mid-may) where we were likely 90/10 grocery stores vs dining out. In fact, it was gratifying to see $0 restaurant spend in Mint in April. But since May, we’re back closer to 75/25.
I’m surprised to see that report indicating a 40-45% premium on dining out vs eating at home. My experience is that it would be at least 2:1 so 100% especially once you consider tax and tipping.
I’ve never really taken to online shopping. I find it quite time consuming to pick out everything online and there are so many things that I pick up that aren’t on the list (when I go to the store). But quite a few people like it so I probably need to try harder.
I started doing online grocery shopping and curb side pick up a few weeks ago. I had attempted it in April but the wait times were too long – like weeks. So I use PC Express at the Loblaws Super store and because I have a PC optimum membership it reminds me of what I have purchased before and top purchased items.
So far it has worked out- I do miss shopping and usually shopped at the No Frills close by our house where I knew where everything was but the selection was not always the best. The prices were better than Loblaws too. I just tired of seeing too many people not wearing masks properly or not at all and decided to try the online shopping again. Every week there are a couple of substitutions which I get to veto when they have filled the order an hour or more before I pick it up. Our Loblaws is huge and it always took me a while to find stuff so know I let my fingers do the walking.
I stopped working due to COVID-19 and stopped grabbing a breakfast on the go through Drive-Throughs and the occasional Skip the Dishes lunch delivered to my office. I did not want to line up to get into Grocery Stores so I started shopping Walmart On-Line for my family shop. I tried Loblaws, Metro, Grocery Gateway and Voila by Sobeys but my go to is Walmart because the prices are excellent and Walmart stands behind their products. If you receive a salad that is not fresh, you just have to request a refund and they honour your request. The pick up at Walmart is free whereas delivery to your home costs $7.99. We believe the money we save on the groceries more than pays for the delivery fee. In addition, we are trying to support local restaurants with weekly take out orders. We made it to restaurants with outdoor patios once a week during the summer which was an additional expense but we had no vacation. I have not done the math but I would suspect we are spending about the same as before on food.
Before 2019 we (only two of us) would eat out once a month on average and practically every day when on holiday (2-3 weeks a year). Starting in the summer we have been eating out at least once a week by picking up a 3 course meal that needs heating in support of local business (restaurants and catering) as a treat and break in place of holidays. Looking at the whole year, we are about the same spend ratio (but the grocery bill is noticeably higher too). We used to go to different stores to get our groceries but now we do all in person in one stop, local Your Independent. That increases the costs a bit. We have not tried online shopping, concern is produce selection etc as noted in the article. No interest in meal service as we feel it does not provide a big advantage over how we shop and eat (and what we like).
We are spending about the same maybe slightly less by not going out. We have 4 kids and have treated them to some family dinners primarily at a restaurant where we get a friends and family discount which covers the tip and supports a local business and workers. The other place we go sold gift cards at a 35% discount so we have gone there as well.
I have tried online grocery shopping by I am one who shops the deals so I find it’s quicker to shop in store. I go primarily to Superstore, No Frills and Costco – save on and Sobey’s are too expensive for my tastes.
I’m the same – I go to Superstore with my list and stick to it, and I am in and out in 30-45 minutes which isn’t bad. I only have 2 kids, but they are both boys lol, so I can’t afford to shop at Save-On or Sobeys on a regular basis. Plus I have the PC World Elite Mastercard so that stacks the savings at Superstore.
We haven’t eaten in a restaurant since March. We do get a takeaway once a week from a local family-run Japanese restaurant (which we adore and want to keep supporting). Otherwise, no dining out at all!
While this helps a bit with the budget, our grocery bill is definitely heftier. We don’t own a car, and public transit can still be a bit dodgy; so we either grocery-shop in person at one of the 2 groceries near our home, or order groceries online for delivery. Delivery is more convenient, but there are frequent omissions or substitutions, and as slots are quickly snapped up and goodies run out quickly, that often means missing out on the best specials. So typically we do a bit of both. We’ve learned to buy heavy/bulky things via delivery, but to purchase most perishable items in person at the smaller of the two groceries (no deliveries, but they’re better at enforcing masks/distancing, and have superior produce also).
We’re definitely spending more on our food, but we’re resigned to that, especially as we’re spending on very little else! Having nutritious, tasty, interesting food is essential to our mental well-being as well as physical. It’s one of the few things we can (mostly) control, and we can have as much variety as we like, within reason.
I have only just started doing detailed tracking again but I am for sure spending less on restaurants. I still had to do some work travel and there are some weeks where I have ordered skip more than once but I have definitely done more cooking at home this year. I have done curbside pickup some and shopped more at a smaller store that didn’t seem to get as crowded so my actual cost for groceries may be up but I think my overall food bill combined is less – just based on my credit card bills this year.
As I have had way less expenses related to my car and no vacation so I have donated money to the food bank monthly since the pandemic started as I felt so fortunate that I didn’t take a hit to my bottom line but so many families did.
Robb, for comparison, how much do you spend annually on your groceries? Our spending runs at $8,900 for two adults and a dog. This amount also includes toiletries and household cleaning products. Perhaps this would make for a good survey question for your readers. Thanks in advance.
Hi Bob, we’re double that amount easily. A poll might be interesting but I’m not sure how useful the answers would be. Every family is unique (single households, multiple kids, retirees, etc.), they might track their “grocery” category differently, shop at different stores, and of course the cost of living varies across the country.
Thanks Robb. I thought we were spending way too much on our groceries. I can relax a little.