Canadians turn to sales, coupons as food affordability remains top concern: report
As Canadians continue to grapple with food affordability, coupons are in and non-essentials are out.
That’s according to the Canadian Food Sentiment Index, a new bi-annual insight report from the Agri-Food Analytics Lab at Dalhousie University, supported by Caddle Insights.
The report measures Canadians’ perceptions and sentiments on a wide-range of food-related issues and will gather insights from more than 3,000 respondents every six months, so researchers can track trends and shifts.
Looking at their overall expenses, 84.1% of consumers said food prices have increased the most in the past 12 months. That was followed by household items and supplies (43%), transportation (36.6%), utilities (35.8%), entertainment and leisure (30.3%), education (10.5%) and childcare (9.1%).
Sylvain Charlebois, professor in food distribution policy and senior director at the Agri-Food Analytics Lab, wasn’t surprised affordability rose to the top. “In fact, we were expecting it. In terms of expenses, obviously it reflects the heartaches that people are facing.”
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However, the inaugural report shows a sense of hope that the most severe impacts of food inflation have passed. “Canadians do think food inflation will remain at a reasonable level, so that’s certainly good news,” he adds.
Restaurant spending is strong
While Canadians are grappling with high grocery bills, there’s strong spending in foodservice channels. The index found Canadians spend an average of $186.95 in foodservice channels compared to $316.03 at food retail each month. With relatively steady sales, the report notes that the foodservice industry has “adapted to new normal, maintaining consistent spending levels despite ongoing economic pressures and changes in consumer behaviour.”
“I was a bit surprised by how much money is spent in restaurants given what’s been happening with the economy,” says Charlebois. “In retail, it’s been flat. We haven’t seen a lot of progress despite inflation [easing]. My guess is there are probably a lot of people out there who are struggling, while many people aren’t struggling at all.”
Consumers are on the hunt for good deals
In response to food inflation, Canadians are changing their grocery-shopping habits, with nearly half (48.2%) seeking out more sales and discounts. In addition, 30.5% are using more coupons, 25.2% are spending more time searching for better prices online, and nearly 25% are shopping at cheaper stores.
“Basically, people are nomads—they’re willing to shop around and look at different stores instead of just going to one place,” says Charlebois. “I think that’s why a company like Loblaw is rolling out a strategy like [piloting] No Name stores in Ontario.”
Consumers are also swapping products to trim their grocery bills: 22% are buying fewer non-essential foods like ice cream, 21.6% are switching to cheaper brands, 16.8% are buying fewer premium foods like meat and fruit, and 16.7% are switching to generic brands. Notably, only 6.3% report little to no change in their shopping habits, highlighting that most Canadians are actively seeking ways to manage the impact of rising food costs.
Being green is not top of mind
Canadians were also asked about their food values, or the major factors they consider when buying food. Affordability is dominant here as well, with 47.3% citing that as the most significant factor. Second on the list is nutrition (24.9%), indicating strong interest in healthy eating. That’s followed by taste (16.7%), availability (5.5%), social responsibility (3.2%) and environmental impact (2.5%).
READ: Inflation, interest rates eroded Canadians' purchasing power since 2022
When it comes to social responsibility and the environment, Charlebois says people will “talk the talk,” but when it comes down to it in the grocery store, “they’ll go with discounts and good deals.”
Who do shoppers trust?
Among players along the food chain, Canadian farmers are the most trusted by Canadians, while major grocers are the least trusted.
In the index, farmers have a trust score of 3.65 (with five being ‘strongly trust’ and one being ‘strongly distrust’), indicating that Canadians have strong confidence in farms to act in their best interests regarding food. That’s followed by government bodies Health Canada (3.59), Canadian Food Inspection Agency (3.54) and Agriculture and Agri-food Canada (3.5), along with merchants at farmers’ markets (3.38) and Canadian food manufacturers (3.26).
Independent grocers (2.89) and major grocers (2.80) have the lowest trust scores. The report suggests this could be due to perceptions of price increases, corporate practices, or insufficient support for local food systems. However, Charlebois points out that with scores being out of five, “2.8 is not that bad—I was expecting it to be lower, to be honest. My understanding of the measurement is that it’s not great for grocers, but it’s not a disaster either.”
