Picking up Nickels

Wednesday, December 21, 2011

Grocery price inflation update

It has been exactly one year since my last grocery price inflation update.

Through November 2011 I have seen the largest growth rate in grocery spending (17.4%) that I have experienced since I actively changed my grocery shopping strategy to reduce costs more than eight years ago. In fact, once 2011 comes to an end I will likely come within a couple hundred dollars of the top dollar amount I have ever spent on groceries (roughly $7,200 in 2003).

At the root of my increased spending is an ongoing rise in food commodity prices. At the core, when the cost of things like livestock and crops rise significantly (along with the price of fuel used to transport the stuff), the impact on the consumer can be eye opening. One can only hope that cost increases will moderate somewhat, but the fact that prices have climbed so much during an extended economic downturn (when one would think demand would be reduced) is a bit of a concern.

Along with increasing prices, I've also experienced an ongoing drought of sales, promotions, high value coupons, and rebates that in the past have allowed me to purchase many items for pennies (or for free!). For example, this time of the year had typically been a great time to stock up on free top of the line razors and blades from the likes of Gillette and Schick (like this). Sadly, with Christmas four days away, I have yet to see a single free razor deal so far this holiday season. Heck, even less generous (but still worthwhile) discounts like the 10% bonus for buying gift cards at Shaw's Supermarkets were no longer offered in 2011.

In summary, I have closely watched my grocery spending for several years now and see nothing to indicate that double digit percentage grocery price increases (much like similar health insurance premium increases) will not continue for the foreseeable future.

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