Rising grocery prices are forcing thousands of Aussies to make heartbreaking choices between their health and their wallets, research has found.
The current strong inflationary environment coupled with 10 consecutive interest rate rises (and potentially an 11th later today) is forcing a massive shift in consumer behaviour in supermarkets, says Grant Ramage, general manager of food for wholesaler Metcash, which supplies food stock to IGA supermarkets.
Mr Ramage told The Australian he’s seeing a pick-up in the sale of private label groceries, otherwise known as ‘home’ or ‘store’ brands, and also a general switch from people buying more expensive fresh produce to less expensive frozen goods.
“We hadn’t seen an awful lot of that [consumers swapping for cheaper options] until early 2023 and then we started to see it,” he said.
“There is a bit of shift and you can see private label sales increasing, trading across into cheaper products and fresh into frozen … things that have been probably pretty well commented on in the market. It’s not massive yet, but it’s noticeable.”
Mr Ramage’s observations were backed by a Charles Darwin University study that also found rising supermarket prices could be pushing people to make more unhealthy food choices – and that some food brands were even exploiting the situation.
The study, published in the Journal of Strategic Marketing, found that unhealthy food brands rewarded shoppers who bought bulk items with significantly cheaper prices per item, while penalising shoppers who purchased smaller volumes of the unhealthy products.
While paying a cheaper price per unit for buying in bulk is not a new concept, the university research team says most unhealthy food brands make the difference between large and small pack pricing bigger than healthy brands do.
Professor Steven Greenland, lead author of the study, says price is a key motivator for people buying unhealthy foods, and brands were taking advantage of this.
“The gap in savings between small and large volumes of unhealthy brands is much greater than the price gap in healthy food items,” he says.
“This reinforces the decision to buy unhealthy products and, of course, this means people will be eating more unhealthy foods.
“Price is recognised as the key consumption predictor within the unhealthy product marketing mix, particularly for low-income consumers, and the issue is widespread.”
Prof. Greenland says volume pricing has helped to undermine unhealthy price policy regulations, such as the high taxes placed on sugar and alcohol, in their efforts to lower the consumption of unhealthy foods.
“We need more robust regulations to ensure that the cost of eating unhealthy foods is fully factored in,” he says.
“Public health regulators need a better understanding of how unhealthy brands marketed themselves using price incentives, and the effect this is having on the psychology of the shopper.”
Should unhealthy foods be priced higher? Or is that just punishing the consumer who is already doing it tough? Let us know what you think in the comments section below.
