Yahoo Finance Huge factor driving Aussies ‘heightened’ Coles and Woolworths grocery bill stress: ‘Significant’
Despite other commodities having much bigger price gains, Aussies are most stressed about their grocery shop.
Australia is currently in the grip of a cost-of-living crisis. Finder's Cost of Living Pressure Gauge, which tracks financial pressure on households, has remained in the "extreme" range for over two years.
A major driver of this stress is the high cash rate, driven up by inflation. While the rising cost of essentials like groceries, energy, and housing has made daily life more expensive, new data reveals it’s not always the sectors with the biggest price hikes that cause the most financial stress.
The graph below depicts the index numbers for price changes across five categories in Australia, with prices set to 100 in January 2022.
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The index for groceries currently sits at 119, indicating a 19 per cent rise in grocery prices over this time period—though that figure doesn’t tell the full story.
Bread, cereals, and dairy have all increased by more than the average (23 per cent), while meat and seafood prices have risen less (12 per cent), mainly due to recent price deflation.
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Electricity costs, which surged during the energy crisis, have now stabilised, resulting in a 0 per cent increase overall. Meanwhile, insurance costs have risen by 20 per cent, rent and mortgages by 27 per cent, and petrol prices have shot up by 42 per cent.
However, data from Finder’s Consumer Sentiment Tracker (CST) reveals that the emotional and financial stress linked to these categories has often far outpaced the actual price rises.
As part of this research, Australians are asked which bills are causing their family financial stress. The responses have been converted into a similar index, with 100 representing the number of households citing each category as a source of financial stress in January 2021.
When charted against inflation, the results are striking.
Disparities in financial stress
The most significant shift in bill stress has been the rise and fall of petrol as a major cause.
While the number of households citing petrol costs as a financial burden has dropped dramatically since its peak in 2022, it remains 83 per cent higher than it was in 2021—despite petrol prices increasing by 42 per cent over the same period.
The standout statistic, however, is the disconnect between grocery prices and stress. While grocery costs have risen by 19 per cent, stress around groceries has surged by an extraordinary 105 per cent.
On the other hand, health insurance costs have risen by 20 per cent, yet bill stress related to insurance has remained flat. So, what’s driving this discrepancy?
Emotional connection to the grocery shop
One potential explanation is the emotional connection Australians have with their grocery shop.
Groceries are a frequent and highly visible expense—most people visit their local store weekly and tend to buy familiar brands, so even small price increases can feel significant. Food is also a deeply personal necessity, and rising costs can trigger anxiety about affording the essentials.
This heightened emotional response likely explains why stress around grocery bills has surged, even though the actual price increases have been more moderate.
By contrast, health insurance has not increased as a source of stress, despite a 20 per cent rise in costs across health, car, and home insurance.
While this is a significant expense, people don’t think about their insurance on a weekly basis—they don’t interact with it daily. As a result, even though these costs have risen more than groceries, they aren’t as prominent in people’s minds.
ACCC’s investigation into supermarkets
Adding to grocery stress is the recent investigation by the Australian Competition and Consumer Commission (ACCC) into supermarket pricing practices.
The ACCC is examining whether supermarkets are using their market power to inflate prices temporarily, only to then apply a “special offer".
While this price-bait-and-switch tactic is nothing new in retail, it remains to be seen if these specific allegations will hold up in court.
One positive outcome of this scrutiny may be a reduction in marketing campaigns like “Down Down” or “Prices Locked".
These campaigns don’t truly benefit consumers and also lock retailers into artificially fixed prices, leaving them unable to adjust when suppliers request price increases.
Perception and reality
It’s clear that rising prices are only part of the story.
While inflation data shows significant increases in grocery costs, the emotional attachment Australians have to their weekly shop is driving heightened financial stress.
Our data indicates that Aussies are increasingly turning to Aldi, a cheaper option than both Woolies and Coles, or spreading their shop across several retailers to take advantage of lower prices in one and a larger range in the other.
This highlights the importance of budgeting and shopping around for the best deals—not just on groceries, but across all financial products.
In the end, this approach will provide the best defence against rising living costs.
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