SA cost of living: Supermarket shoppers battle to afford groceries as small businesses struggle

Steak sandwiches are out as South Aussies struggle to afford meat and even basic supermarket groceries such as bread, while small businesses such as butchers are being pushed to the brink.

Battlers working to the tightest of budgets are being bludgeoned on groceries – including bread and traditional cuts of meat – while small businesses such as butchers are being pushed to the brink.

The finding has emerged from exclusive analysis revealing what’s really going on with supermarket prices.

The audit by The Advertiser shows a loaf of the least expensive white bread is 54 to 71 per cent dearer than a year ago, depending on the chain.

The biggest increase was $1, from $1.40 to $2.40. That might not sound like much, but over a year the cost of buying two loaves a week rises by $100.

Australian wheat prices started 2023 about 55 per cent higher than two years earlier.

They have fallen since, giving cause for hope that bread costs may ease soon too.

People trying to keep their outlays to a minimum also face paying 30 to 40 per cent more for the cheapest canned tuna than at this time in 2022, while there’s been a 50-60 per cent rise for canned tomatoes.

And handwash is about 60 per cent pricier.

But it’s not all bad news. Many fresh vegetables are much better value as supply normalises following last year’s floods.

Also, the price of some pantry staples – such as flour, sugar and coffee – have been held steady by some supermarkets. Overall, the pace of price increases is moderating, the study reveals.

Mark Willcox, the owner of Elder Meats, a corner butcher shop on Elder Terrace at Glengowrie, believes the last few weeks have been tough as people grapple with cost of living pressures. Picture: Dean Martin

Most of the nine goods baskets monitored are now 5-6 per cent more expensive than a year ago. That is about half the speed prices increased in the 12 months before that.

The results mean the typical family’s annual grocery bill is about $1800 more than it was in 2020-21, following a $1200 increase then a further $600 jump in 2022-23.

A Woolworths spokesman said it was seeing “strong growth” in demand for its least expensive range – Essentials – as consumers attempt to ease the squeeze on their finances.

“We’ve also seen a pronounced switch to affordable options in drinks as well as household care, baby needs and dairy items such as milk, cream and butter,” he said.

A Coles spokeswoman said there was price deflation in key fresh lines including lettuce, cucumbers, and carrots, as well as in meat.

She said customers were switching out of beef and into pork.

In Coles, home brand sales grew by more than 11 per cent in the first quarter of 2023, with oil, pasta and rice being the most popular categories.

At Woolworths, sales of own-brand pantry and chilled dairy items went up a massive 20 per cent in sales.

The Advertiser’s grocery comparison also found evidence of ‘shrinkflation’, with the size of a popular strawberry jam cut by 25 per cent. But the cost is only seven per cent lower than a year ago.

Supermarkets are reporting customers ditching red meat for chicken. Butchers around the country say shoppers are buying smaller amounts of their favourite cuts, while sales of cheaper sausage and mince options are through the roof.

Mark Willcox, owner of Elder Meats in Glengowrie, has noticed a 10 per cent drop in sales in the past few weeks.

“I am fearful of going out of business,” he said, adding he had been forced to cut back hours for his only employee.

Mr Willcox, 58, who has run the shop for 11 years, said daily customer numbers had dropped from 70 to 55. “I can’t see it getting any better,” he said. “I’ve got a family, I’ve got a mortgage, so we’ve just got to adapt and do things smarter.”

Goodwood Quality Meats owner Luke Leyson said he had not had much of a decrease in customers but rather “people are being smarter with what they buy”.

Mr Leyson, 31, said customers were “tightening their belts” from Monday through Thursday. But they still “enjoy spending the money to entertain” on weekends.