Canadians more frugal due to rising food prices: RBC Canadian Consumer Outlook

Canadians more frugal due to rising food prices: RBC Canadian Consumer Outlook 
Economic mood darkening, with first decrease in the national index in nearly 
two years 
TORONTO, May 16, 2013 /CNW/ - Most (84 per cent) Canadians believe the food 
they typically purchase has increased in price over the past year, according 
to the quarterly RBC Canadian Consumer Outlook Index (RBC CCO). With rising 
food prices eating into their household budgets, an overwhelming majority of 
Canadians (91 per cent) say they will tighten their belts and make smarter 
decisions when purchasing food. 
The survey found that the average Canadian spends $411 per month on groceries 
and one third (33 per cent) say rising food prices has had a significant 
impact on their budget, with 43 per cent cutting back on other expenses. Also, 
increases in food prices are impacting shopping habits with more than half of 
Canadians (57 per cent) comparison shopping for food more than before, and 
following a budget more than before and buying less on impulse (41 per cent); 
others are looking to other parts of their life to deal with rising food 
prices such as using their vehicle less (15 per cent). 
"In light of concerns over escalating food prices, more Canadians are looking 
for cost-saving strategies they can use on their next trip to the grocery 
store," said Jason Round, head, Financial Planning Support, RBC Financial 
Planning. "Creating a budget that covers all of your expenses - including 
must-haves such as groceries - can help keep your spending under control. 
Since costs can change, it's essential to regularly review your budget to stay 
on track and make any adjustments necessary to help balance living for today 
and saving for future goals." 
Food inflation rose 2.4 per cent last year, after increases of 3.8 per cent 
and 1.4 per cent in 2011 and 2010, respectively. A 2012 RBC Economics report 
anticipated that last year's U.S. drought could send food prices back up 
between 3.0 and 4.0 per cent this year. The report also noted that it takes 
approximately six months for raw food commodity price changes to pass through 
to prices at the retail level. 
"Even though we are seeing rising food costs, overall inflation should remain 
below two per cent in 2013," said Paul Ferley, assistant chief economist, RBC. 
"We are in an environment of modest growth, so pressures from rising food 
prices won't dominate inflationary expectations." 
The RBC CCO indicates that economic mood in Canada has darkened over the last 
quarter, with the national overall index dropping six points to rest at 82 - 
the first time in nearly two years that there has been an overall decrease in 
the national index. Only six-in-ten (60 per cent) Canadians think the economy 
is in good shape (down a significant eight points since last quarter). More 
Canadians believe the economy will worsen in the next year (30 per cent) 
rather than improve (26 per cent). 
According to the Index, while general perceptions of the economy have 
worsened, job anxiety has actually dropped, returning to more modest levels of 
19 per cent after a temporary spike to 24 per cent earlier this year. 
RBC Economics is currently forecasting the Canadian economy will grow by 1.8 
per cent in 2013, and will be releasing its next Economic and Financial Market 
Outlook in June. 
RBC CCO REGIONAL HIGHLIGHTS 
FOOD PRICES            NAT'L    BC     AB    SK/MB    ON     QC     AC 
Have increased the                                                 88%
past year               84%    86%    88%     89%    80%    86% 
Have had a                                                         36%
significant impact
on day-to-day budget    33%    32%    24%     37%    33%    38% 
Comparison shop more                                               59%
than before             57%    52%    53%     52%    58%    60% 
More budget                                                        47%
conscious/less
impulse buy             41%    45%    37%     40%    41%    40% 
Average monthly                                                    $420
spend                  $411    $415   $440   $401    $379   $448 
                                                                 
ECONOMIC CONFIDENCE    NAT'L    BC     AB    SK/MB    ON     QC     AC 
Expect personal         35%    33%    37%     41%    35%    34%    34%
financial situation
to improve in the
next year 
Expect Canadian         26%    30%    32%     29%    30%    17%    21%
economy to improve
in the
next year 
Anxious about           19%    17%    13%     13%    24%    13%    22%
potential job loss
in the next year 
About RBC financial advice and interactive tools
Canadians can access RBC Financial Planning and rbc.com/savingsspot for free 
planning, budgeting and savings advice and resources, or to find the nearest 
Investment and Retirement Planner. In addition, Canadians who want to get more 
from their day-to-day banking, protect what's important, save and invest, 
borrow with confidence or take care of their businesses, the RBC Advice Centre 
can help answer their questions. Interactive tools and calculators such as the 
Debt Reduction Plan and Debt Consolidation Calculator, provide customized 
information covering many facets of personal finance. All personal RBC online 
banking clients also can use myFinanceTracker, a no-cost interactive financial 
management tool, to create a set budget, track their spending habits and 
access tax-related apps in myTax Centre, to help manage and plan their taxes. 
About the RBC Canadian Consumer Outlook Index (RBC CCO)
Benchmarked as of November 2009 to a baseline of 100, the RBC CCO is conducted 
online via Ipsos Reid's national I-Say Consumer Panel to 3,024 Canadians (560 
British Columbia, 407 Alberta, 291 Saskatchewan/Manitoba, 866 Ontario, 579 
Quebec, 321 Atlantic Canada). Weightingwas thenemployed to balance 
demographics and ensure that the sample's composition reflects that of the 
adult population according to Census data and to provide results intended to 
approximate the sample universe. Data collection was April 2 to 15, 2013. The 
precision of Ipsos Reid polls are calculated using a credibility interval. In 
this case, the poll is considered accurate within ± 2 percentage points of 
all Canadians. 
Suzanne Willers, RBC Corporate Communications, 416 974-2727 Kate Yurincich, 
RBC Corporate Communications, 416 974-1031 
SOURCE: RBC 
To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/May2013/16/c7576.html 
CO: RBC Royal Bank
ST: Ontario
NI: FIN ECO  
-0- May/16/2013 09:30 GMT
 
 
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