Opinion
Coping with higher prices on smaller portions and chicken nuggets
Rachel Clun
ReporterWhat did people do when the price of all their grocery favourites went up and up thanks to inflation? It seems we traded-in milk, cheese, fresh fruit and veggies for chicken nuggets and chocolate.
The past few years have been tough financially for many of us. Inflation rocketed to nearly 8 per cent by the end of 2022 and in response, the Reserve Bank hiked official interest rates to levels not seen for 12 years. And those rates have been mostly passed on by commercial banks to anyone with a home loan.
Supermarkets are often the first target of public ire about prices, but their margins are modest compared to some of their suppliers.Credit: Ridofranz
In response to those financial pressures, households have reduced their spending on a range of goods and services – we’ve been spending less on household goods and dining out, for instance.
But what we haven’t really been able to gauge is how the cost of living pressures changed our grocery habits. Enter the Australian Bureau of Statistics and its data on our “apparent consumption of selected foodstuffs�.
This data measures the amount of food and non-alcoholic drinks we purchase from the major supermarkets, butchers, bakeries, delis and convenience stores, and uses that to work out the daily average consumption of those foods and drinks per person in Australia.
(It’s called apparent consumption because not all the food and drink we purchase is eaten – some is stored for later, and plenty of soggy vegetables end up in the bin at the end of the week.)
All up, we bought 14.8 million tonnes of food and drink from food retailers in the last financial year (excluding cafes, restaurants and takeaway joints). That’s 1.9 per cent or 292,300 tonnes less than the previous financial year.
Per person, that’s 63 grams or 337 kilojoules less in food a day and the first time since the ABS started compiling this data in 2018.
Maybe more people have gone on post-pandemic health kicks. But as well as dropping the overall amount we’re buying, we are buying less of the healthy stuff.
Vegetables, fruit and milk products led a decrease in consumption when measured by the largest reduction by weight per person, per day. They were also among the top categories for reduced kilojoule consumption per person, per day when compared with 2021-2022.
Over the past financial year, we reduced our energy consumption of milk and cheese by more than 50 per cent, and our vegetable consumption declined by nearly 46 per cent.
In fact, our consumption of all major food groups fell year-on-year, but looking at the past five years, we’ve significantly upped our consumption of snack foods (up 28.4 per cent) and confectionary (up 42 per cent).
Looking at some key subgroups, we’re getting much less energy from staples including oils, potatoes, flours and grains and fruiting vegetables such as zucchini, pumpkin and avocado, while we’ve increased our energy consumption for muesli bars and what the ABS calls poultry-based dishes, which includes premade chicken kievs, schnitzels and nuggets.
Now, there are a few ways to look at this data.
Firstly, there could be a correlation between high inflation for some products and a reduced consumption. That’s economics 101: if a product that’s substitutable increases too much in price, consumers will often just pick an alternative, or potentially trade down to get a more affordable product.
Trading a scotch fillet steak for minute steaks, for example, or deciding you can live without cheese for a week or two.
And dairy price increases in particular have been large – rising by more than 10 per cent for five of the last six quarters.
But the ABS’s health statistics spokesman Paul Atyeo said many of the foods we consumed less of last financial year were following longer-term trends, and we’re consuming between 5-8 per cent less cow’s milk, bread and fruit juice than we were five years ago.
Over that time, our consumption of chocolate, potato chips and convenience meals has also risen.
A couple of things here. Firstly, the hours worked by Australians have been steadily rising – a combination of more people in work, and those people working longer hours either through multiple jobs or moving from casual or part-time to full-time.
If you’re spending more time at work, that means less time at home, and less time to cook, so it would make sense if more people are leaning on convenience foods (frozen dumplings are my go-to) to take a little pressure off.
Secondly, with all sorts of financial pressures coming at us, it’s hard to justify buying new clothes or upgrading the TV. But the occasional block of chocolate? Now that’s much more affordable.
We’ll have to wait another couple of years to see whether our diets bounce back from these pressures, or whether the trends are here to stay.
Ross Gittins is on leave.
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