Food costs are moderating in Canada. Year-over-year food price increases eased to 4 per cent in August from 5 per cent in July and 5.5 per cent in June, Statistics Canada reported Thursday. "Upward price movements for meat, fresh fruit and fresh vegetables have eased from record highs in recent months," Statscan said.
Still, consumers continue to exercise more caution at the grocery store, retail analyst Keith Howlett of Desjardins Securities said in a recent research report on consumer products and merchandising.
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Peering into shopping carts and analyzing Canadians' altered eating habits, Mr. Howlett found that consumers exhibit the following behaviour:
1. Trading down within product categories: hamburger for steak; Breyers ice cream for Häagen-Dazs.
2. Trading down between substitute product categories: chicken for steak; lentils for chicken.
3. Buying more items on sale: weighting price more than brand preference.
4. Reducing indulgent, non-essential items: cutting back on marinades, sauces, canapés, specialty cheeses, luxury desserts.
5. Trading down from national brands to private label: Switching to the grocers' lower-priced in-house brands.
6. Shopping around: Going from store to store to pick off good deals, subject to the price of gas (which is down, year over year, Statscan reports).
7. Reducing at-home inventory: living off the fat of the fridge, and aligning buying volumes closer to consumption levels.
8. More home cooking: shifting to products requiring more in-home preparation prior to consumption.
9. Fewer leftovers: reducing in-home wastage of food products due to spoilage, or preparation of excess quantities
10. Checking out the packaging: shifting to packaging that clearly offers superior value, for instance buying bulk products instead of conveniently pre-packaged alternatives.