The food inflation rate in Canada in February was 7.4 per cent, the largest yearly increase since May 2009. With much higher food inflation, consumers are desperate to find new ways to save at the grocery store.
In the United States and Canada, consumers are increasingly using food rescuing apps, going for the “enjoy tonight” deals, trading down on brands and product quality, and reading weekly flyers.
But one advantage American consumers have in their savings toolbox that Canadians lack is an incredibly sophisticated couponing industry. And the inflation rate in America in February was 8.6 per cent.
Most households in the U.S. receive numerous coupons every week. They’re everywhere.
But since the start of the COVID-19 pandemic, promotions in Canada, including coupons, are incredibly difficult to find.
In the U.S., coupon stacking – using more than one coupon to purchase the same item – is a common practice allowed in many stores. Few stores in Canada allow it. It’s not unusual in the U.S. to get a product for free using coupon stacking.
United States stores will also double the value of coupons on certain days. And using coupons on already-discounted food products is also done quite frequently in the U.S. Not in Canada.
You can also get a credit in some American stores if the value of your coupon is higher than the product’s price. Say your product is worth $1 and your coupon is worth $2. Some retailers will give you a credit, just like cash.
So it’s definitely a different world for U.S. consumers.
Coupon-clipping companies drive the American couponing industry. These companies clip, collect and sell coupons to the public. People go online and order as many coupons as desired.
Empowering consumers with ways to save is embedded in the American way of life, and it allows consumers to save big at grocery stores.
Given the options Americans have for saving, a food inflation rate of 8.6 per cent in the U.S. is perhaps equivalent to five per cent in Canada.
Without tools to gain savings, Canadians are held hostage by food inflation.
While some Canadians claim to save up to $400 a week using coupons, whether digital or paper-based, doing so can require almost 30 hours a week to manage. The culture isn’t the same in Canada and we haven’t accepted couponing to the same extent.
But times are changing as food prices rise at a record pace.
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A recent survey by Dalhousie University suggested that using coupons is the most popular cost-saving strategy consumers intend to follow at the grocery store in 2022. A total of 52.8 per cent of Canadians surveyed said they plan to use coupons more often. People want to use more coupons, but understanding their conditions and compliance rules can be overwhelming.
It’s time for the Canadian food industry to up its couponing game. Canadians need a break but, most importantly, the industry needs to show it understands consumers are feeling the pain and that it wants to help. And since prices are only going to go up, Canadians will certainly appreciate the help.
Volume discounting is also an issue. Asking Canadians to buy at least three or four items at a time to save when they only need one is impractical and problematic. Not only does it discriminate against single-person or single-parent households, but it also gets people to buy more than they need, potentially generating more food waste. Promotional strategies need to be smarter.
Grocers and food manufacturers have supplied Canadians with decent high-quality products, at affordable prices, for years. There are only eight countries in the world where people spend less than 10 per cent of their household income on food and Canada is one of them.
But rising food costs are getting Canadians to look around for mitigating options, and the industry needs to show it’s willing to help.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.
Sylvain is one of our Thought Leaders. For interview requests, click here.
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