Why your grocery bill is always so high


IF YOU'VE ever gone grocery shopping overseas, you'll know first-hand just how ridiculously expensive Australian supermarkets can be.

And there are plenty of stats to back that suspicion up.

According to The Economist Intelligence Unit's (EIU) Worldwide Cost of Living 2018 survey, Sydney was the 10th most expensive city in the world to live in last year behind Singapore, Paris, Zurich, Hong Kong, Oslo, Geneva, Seoul, Copenhagen and Tel Aviv.

It revealed Sydneysiders paid an average of $US3.99 ($A5.78) for a 1kg loaf of bread, $US20.49 ($A29.68) on average for a bottle of wine, $US23.89 ($A34.60) on average for a pack of cigarettes and an average of $US0.98 ($A1.42) per litre for unleaded petrol.

While Sydney has dropped out of the top 10 most expensive cities this year, it has consistently featured on the list in previous years - coming in at number five in 2014 - while other Australian capitals also regularly outstrip other global cities when it comes to the cost of living.

News.com.au has looked into supermarket prices as part of its new series Rip-off Buster, which provides readers with practical cost-of-living advice and hacks on how to help get a better deal - all with the goal of helping you to become financially fit.

The EIU's global chief economist and managing director Simon Baptist told news.com.au grocery prices in Australia had been especially high in recent years due to factors such as the strong Australian dollar, which coincided with healthy wage growth and the mining boom.

But he said prices had actually been coming down recently thanks largely to a "broadbased decline in the Australian dollar" - although our prices were still comparable to notoriously expensive locations like Singapore and Hong Kong.

He said the price of cigarettes, eggs, mobile phone plans, dry cleaning, books and cinema tickets remained particularly high in Australia but that we were actually getting a better deal for haircuts, utility bills, butter and milk.

He said the UK had noticeably low grocery prices overall thanks to its "very, very competitive grocery sector" and that there "could be more competition" in Australia.

According to Numbeo, a website where users contribute data from around the world, a typical basket of groceries containing milk, bread, rice, eggs, cheese, chicken breasts, beef, apples, bananas, oranges, tomatoes, potatoes, onion and lettuce would total an average of $70.59 Down Under.

That's well ahead of the UK, which came in at $58.07, Ireland at $69.55, the UAE at $67.29 and Spain at $61.85.

For a litre of milk we pay an average of $1.47 - while Dutch consumers pay $1.44, Americans $1.19 and Germans $1.14.

For a 500g loaf of white bread, Aussies fork out $2.63, while in Japan it's $2.57, $2.49 in Singapore and just $1.77 in the UK.

We pay $4.27 for a dozen eggs while UK shoppers pay $3.32, the US pays $3.28 and Japan pays $3.01.

And despite being a major grower of oranges, Aussies pay $3.73 per kilo compared with $3 in the UK, $3.60 in New Zealand and $3.44 in Germany.

Comparison site Finder.com.au also analysed separate Numbeo data to reveal the cost of groceries in 12 countries to find out how Australian prices compare to the rest of the world.

It found Australia shared fourth place with New Zealand, with an average spend of $100 for everyday staples.

The top three most expensive countries for groceries were the USA, Canada and France - but Aussie and New Zealand shoppers are still paying far more than consumers in Israel, Ireland, Germany, the UK, China, Greece and India.

Finder insights manager Graham Cooke said the cost of groceries could add up, especially if you're feeding a whole household.

"It pays to shop with the seasons - so check what's in season in your area to get the best value in the supermarket," he said.

"The best way to save money is to drop your supermarket loyalties. Shops will offer different deals at different times so check out the weekly catalogues before you do your shop.

"Both Coles and Woolies offer exclusive online shopping discounts, so check out their websites to see if you can score yourself some additional discounts."

And a quick scroll through insurer Budget Direct's cost of living comparison tool also reveals grocery prices in London are 10.79 per cent lower than in Sydney, while groceries in Singapore are 19.92 per cent lower and those in Houston are 21.12 per cent lower than in the NSW capital.

The reasons for our astronomical prices are varied - we're a huge country, which means transportation costs are high, as is labour, rent and electricity and other running costs for retailers.

We're a nation regularly affected by natural disasters like drought, fires and floods, which can destroy crops, and we're isolated, which means there is little international competition and no nearby neighbours to compare ourselves to.

Until recently, supermarket giants Coles and Woolworths have also enjoyed a duopoly - although consumer campaigner Christopher Zinn told news.com.au the "remarkable growth" of Aldi and the arrival of new players like Costco had "shaken up" the industry to everyone's benefit recently.


Mr Zinn said while it wasn't easy, there were clear ways the average shopper could lower their supermarket spend.

"People who come to Australia from America or England are struck by how much groceries cost here, and there may or may not be a good reason for it, but in terms of what you can do about prices, there are various options - and a little time and knowledge can go a long way in reducing your bill," he said.

"You can't order groceries online from overseas due to perishability … but buying seasonally and buying things that have been marked down can help cut costs."

Mr Zinn said slow cookers and pressure cookers could help turn cheaper cuts of meat into "five-star meals", and he recommended buying discounted meat and then freezing what couldn't be eaten immediately.

Buying in bulk, shopping at Aldi and buying discounted meat can help to cut costs. Picture: iStock
Buying in bulk, shopping at Aldi and buying discounted meat can help to cut costs. Picture: iStock

As a Costco member, Mr Zinn said a membership was worthwhile for those feeding families or large crowds who are able to buy in bulk on the cheap.

And he said shopping at Aldi delivered "consistently good value" and experimenting with new - and cheaper - ingredients could pay dividends.

"As soon as you get anything in a package it tends to be more expensive, although that's not always the case as packaged foods can also be put on special," Mr Zinn said.

"Things like not shopping when hungry I think is an old wives' tale, but you really need to have a list and avoid being distracted by things you don't need and won't use.

"The key thing is to use unit pricing - don't be misled by the shelf price which can give a wrong impression with certain things like cereals."

What's the rip-off that drives you mad? Comment below or tweet @carey_alexis | alexis.carey@news.com.au

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