Canadians more frugal due to rising food prices:
RBC Canadian Consumer Outlook
Economic mood darkening, with first decrease in the national
index in nearly two years
TORONTO, May 16, 2013 Most (84 per cent) Canadians
believe the food they typically purchase has increased in
price over the past year, according to the quarterly RBC
Canadian Consumer Outlook Index (RBC CCO). With rising
food prices eating into their household budgets, an overwhelming
majority of Canadians (91 per cent) say they will tighten
their belts and make smarter decisions when purchasing food.
The survey found that the average Canadian spends $411 per
month on groceries and one third (33 per cent) say rising
food prices has had a significant
impact on their budget, with 43 per cent cutting back
on other expenses. Also, increases in food prices are impacting
habits with more than half of Canadians (57 per cent)
comparison shopping for food more than before, and following
a budget more than before and buying less on impulse (41 per
cent); others are looking to other parts of their life to
deal with rising food prices such as using their vehicle less
(15 per cent).
"In light of concerns over escalating food prices,
more Canadians are looking for cost-saving strategies they
can use on their next trip to the grocery store," said
Jason Round, head, Financial Planning Support, RBC Financial
Planning. "Creating a budget that covers all of your
expenses - including must-haves such as groceries - can help
keep your spending under control. Since costs can change,
it's essential to regularly review your budget to stay on
track and make any adjustments necessary to help balance living
for today and saving for future goals."
Food inflation rose 2.4 per cent last year, after increases
of 3.8 per cent and 1.4 per cent in 2011 and 2010, respectively.
A 2012 RBC Economics report anticipated that last year's U.S.
drought could send food prices back up between 3.0 and 4.0
per cent this year. The report also noted that it takes approximately
six months for raw food commodity price changes to pass through
to prices at the retail level.
"Even though we are seeing rising food costs, overall
inflation should remain below two per cent in 2013,"
said Paul Ferley, assistant chief economist, RBC. "We
are in an environment of modest growth, so pressures from
rising food prices won't dominate inflationary expectations."
The RBC CCO indicates that economic mood in Canada has darkened
over the last quarter, with the national overall index dropping
six points to rest at 82 - the first time in nearly two years
that there has been an overall decrease in the national index.
Only six-in-ten (60 per cent) Canadians think the economy
is in good
shape (down a significant eight points since last quarter).
More Canadians believe the economy will worsen in the next
year (30 per cent) rather than improve (26 per cent).
According to the Index, while general perceptions of the
economy have worsened, job anxiety has actually dropped, returning
to more modest levels of 19 per cent after a temporary spike
to 24 per cent earlier this year.
RBC Economics is currently forecasting
the Canadian economy will grow by 1.8 per cent in 2013, and
will be releasing its next Economic and Financial Market Outlook
CCO REGIONAL HIGHLIGHTS
About RBC financial advice and interactive tools
Canadians can access RBC
Financial Planning and rbc.com/savingsspot
for free planning, budgeting and savings advice and resources,
or to find the nearest Investment
and Retirement Planner. In addition, Canadians who want
to get more from their day-to-day banking, protect what's
important, save and invest, borrow with confidence or take
care of their businesses, the RBC
Advice Centre can help answer their questions. Interactive
tools and calculators such as the Debt
Reduction Plan and Debt
Consolidation Calculator, provide customized information
covering many facets of personal finance. All personal RBC
banking clients also can use myFinanceTracker,
a no-cost interactive financial management tool, to create
a set budget, track their spending habits and access tax-related
apps in myTax
Centre, to help manage and plan their taxes.
About the RBC Canadian Consumer Outlook Index (RBC CCO)
Benchmarked as of November 2009 to a baseline of 100, the
RBC CCO is conducted online via Ipsos Reid's national I-Say
Consumer Panel to 3,024 Canadians (560 British Columbia, 407
Alberta, 291 Saskatchewan/Manitoba, 866 Ontario, 579 Quebec,
321 Atlantic Canada). Weighting was then employed to balance
demographics and ensure that the sample's composition reflects
that of the adult population according to Census data and
to provide results intended to approximate the sample universe.
Data collection was April 2 to 15, 2013. The precision of
Ipsos Reid polls are calculated using a credibility interval.
In this case, the poll is considered accurate within ±
2 percentage points of all Canadians.
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For more information, please contact:
RBC Corporate Communications, 416 974-2727
RBC Corporate Communications, 416 974-1031