Four tips to cut grocery costs while prices skyrocket

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Balancing a household budget is becoming an increasingly difficult task in Australia.

The growing cost of everyday goods continues to outstrip the uptick in wages, as evidenced by last year's 3.5% consumer price index (CPI) rise versus the wage growth figure of 2.3%.

Measures to combat this trend were recently announced in the Federal Budget. This included cutting the fuel excise for the next six months and providing one-off payments to Australians receiving income support. But with global conflict and local natural disasters impacting production and supply of essential goods, many view these short-term measures as inadequate - especially when inspecting grocery receipts.

Person checking shopping list on phone, trying to save money on groceries while the cost of living rises in Australia.

"We've never seen so much volatility in grocery pricing as we have in the last two years," says Sean Smith, CEO of grocery comparison app Frugl.

Since the end of 2021, Frugl has recorded price increases as high as 20-30% for essentials like cooking oil and tinned foods, while some instant coffee brands skyrocketed by 74% across the major retailers.

Looking at the 12-month change in overall shelf prices, the app tracked increases around 2.5%. That's a similar figure to the price rises Woolworths CEO Brad Banducci forecasted in recent weeks, so inflation is indeed starting to stack.

"When times get tough, people get making bolognese at home. But now the cost of beef is just phenomenal," says money coach and author Serina Bird.

Bird approaches life with deeply embedded frugality - and was a Franklins check-out clerk in another life - so she's been keenly monitoring her grocery dockets. She's concerned that, even with some extra government support, many are still struggling to afford supermarket essentials.

"We've known for a long time that our social security in Australia isn't enough, and pensioners and single parents are particularly exposed," she says.

To help alleviate some of that pressure, here are four money-saving tips for Aussie shoppers.

1. Don't bring your kids to the shops (when possible)

"The nag factor is a real issue," Bird says. "A lot of things marketed to children are made to be very appealing with bright colours and cartoons, and surprise - they're generally the most expensive."

Leaving the kids at home with a partner or carer while you sort out the shopping isn't always an option, especially for single parents. But Bird says if the opportunity strikes, take advantage of it to avoid splurging on items that might be required to quell supermarket aisle tantrums.

2. Experiment with DIY basics in the kitchen

When it comes to essentials, prices are very elastic between house and name brands - a loaf of bread might cost $2 or $8 depending on your preference. But Bird says getting creative in the kitchen can one-up even the cheapest options, while still satisfying picky eaters.

The do-it-yourself champion is a big advocate for investing in a bread maker (secondhand options abound) and baking your own. Bird buys the ingredients - bread flour, milk powder, bread improve and yeast - in bulk, then gets organized.

"I get old ice cream containers and put all the ingredients in there. So, when it's 10pm at night and I go 'oh no I don't have bread for the kids' lunches tomorrow', I put it all in the bread maker so it's ready to go overnight."

Bird's go-to budget meals include spaghetti bolognese bulked-out with red lentils and vegetables, winter soups built on any veggies lingering in the back of the fridge, and anything featuring affordable tinned protein like tuna and sardines. She also suggests switching out expensive ingredients for their more affordable counterparts.

"You can get by making a risotto with Australian medium grain rice rather than arborio rice, and that's very cheap. Add some bacon and peas and it's quite gourmet."

3. Don't forget about travel expenses

While what you spend at the petrol pump might not appear on your grocery receipt, it pays to plan out your supermarket trips efficiently to cut down on secondary expenses.

"Doing something like making your own bread also saves you midweek when you don't have to put petrol in your car to drive to the supermarket, spend an hour shopping and accidentally also buy things like chocolate at the checkout or things in the middle aisle of Aldi," Bird says.

4. Compare regular purchases across retailers each week

Smith says households can save roughly 20-30% on their weekly grocery shop when using an app like Frugl and doing extra leg work on weekly grocery runs.

"You don't see that much difference at a basket level because there's a spread of promotions within your average shop, but these aren't the same across retailers. So, if you break that shop up and do it across [multiple stores], that's where you'll see greater savings."

While fliting between supermarkets might not be feasible for some, or even seem worthwhile to save 20 cents on a can of baked beans, Smith says it pays to compare big-ticket items.

"If you're looking at dog food, washing powder, razors, feminine products - any of these things are pretty expensive. If they're available at a 50% discount, that adds up really quickly."

WiseList is another app offering a similar service to Frugl, where you can create shopping lists that show where you'll save on your favourite purchases, or scan products in-store to check for cheaper options elsewhere. Then there's Half Price which - you guessed it - displays items currently on sale at half price at major supermarkets.

Listen to our Friends with Money podcast bonus episode for more insight into why everyday living is so expensive right now, and what the future may hold for your budget.

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Olivia Gee is a freelance personal finance writer. She has a double Bachelor's degree in Journalism and Media and Communications from the University of Wollongong.

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