One Year On, Have Supermarket Prices Gone Up?

Last year in Oct of 2009 we did a story called “What is inflation and how does it affect you?”

If you missed the story or need a reminder, click here!

What we did was purchase 34 standard products from Coles supermarkets on the 21st of August 2009. These products included everything from Coke, bread and even meat. The idea was that each year going forward we would purchase the same items on the same day. Then we could track year to year how much these everyday items changed in price.

However we have changed the rules a little bit. After talking to some people in supermarkets, they have suggested we purchase the items in July each year. This is because it is the start of the new FY. We agreed that it would make more sense to do this. As this is where you could check the price changes in food vs. your salary or incoming wage rises.

Why is this important? Well we give more details later in this article as to why this is so incredibly important to your home budget. And believe me tracking inflation is very important to you.

Below you can see the difference between the old prices vs. the new prices. Now remember this has only been since Aug 2009 and not the full year. However next year we will do a full year.

*** Please note some products had to be adjusted. For example we purchased beef steak fillets in 2009. We purchased 0.298kg. In 2010 we could not purchase exactly 0.298kg. So we have worked out what it would cost us per kilogram in 2009 vs 2010. All the changes have been to the orginal 2009 size. This means we are comparing apples with apples. What this means is it is accurate. Any product that we could not purchase at the same weight we have indicated***

Before we move onto the differences in product costs we shall remind you that we have purchased these goods on the backdrop of Coles making some major price cuts on different brands storewide. Remember since the year 2000 to 2009 Australia had the highest rising food prices for any OCED country. An average of 4 percent a year. So places like Coles and Woolworths have made plenty of profit on the back of this. In fact some people have suggested (including me) that the reason we have had the highest rising food costs is because we have a duopoly with Coles and Woolworths.

However in June, Coles announced their price drop campaign.

Check out the Coles advert to remind you

Dim lights

Due to this campaign, we believed the overall cost of our shopping experience would be cheaper. As the Coles advert indicates, prices are down and staying down on things that customers buy most at Coles. Surely our basket of food staples would be cheaper? So let’s see what happened.

Coca Cola 24x 365ml can pack $20.00
Old price $23.99, a saving of $3.99

Choice Beef Mince (4 star) 0.511kg $5.11 total price
This works out to be $10.00 a kilo
Total price under the 2009 measurement of 0.574kg is $5.74
Old price $6.31, a saving of $0.57

Beef Scotch Fillet Steak 0.458kg $13.74 total price
This works out to be $30.00 per kilo
Total price under the 2009 measurement of 0.298kg is $8.94
Old price $8.94, a saving of $0.00

Nestle Milo 750 grams $9.57
Old price $7.00, more expensive by $2.573

Ski Wild Strawberry Two Pack 200 grams $2.69
Old Price $2.69, saving of $0.00

Arnotts's Jatz Crackers 250 grams $2.89
Old Price $2.66, more expensive by $0.23

Maggie Extra Delicious 2 min noodles 72 grams $0.85
This works out to be $11.80 per kilo
Total price under the 2009 measurement of 82 grams is $0.96
Old Price $1.01, a saving of $0.05

Holbrook's Worcestershire Sauce 250ml $2.59
This works out to be $10.36 per liter
Total price under the 2009 measurement of 150ml is $1.54
Old price $1.54, a saving of $0.75

Heinz Tomato Ketchup Upside-down 500ml $2.79
Old Price $2.76, more expensive by $0.03

Cadbury Block Chocolate 200grams $4.29
Old Price $3.00, more expensive by $1.29

Smiths Twisties 90grams $1.56
Old price $1.56, a saving of $0.00

Farmers Union Iced Coffee 600ml $2.95
Old price $2.95, a saving of $0.00

Mars Chocolate Bar 53 Grams $1.69
Old price $1.00, more expensive by $0.69

Bananas 1.257kg $3.37 total price
This works out to be $2.68 per kilo
Total price under the 2009 measurement of 1.277kg is $3.42
Old prices $5.08, a saving of $1.66

McCain Pizza Ham and Pineapple 500 grams $6.29
Old price $5.00, more expensive by $1.29

Dairy Farmers Milk 2 Litres $3.45
Old price 3.46, a saving of $0.01

The Sunday Mail Newspaper $1.80
Old price $1.10, more expensive by $0.70

Mount Franklin Water 1 litre $2.75 total price
This works out to be $2.75 per litre
Total price under the 2009 measurement of 1.5 litre is $4.12
Old price 2.67, more expensive by $1.45

Strawberries 250 grams $3.88
Old price $2.98, more expensive by $0.90

Meadow Lea Margarine 500 grams $3.49
Old price $3.29, more expensive by $0.20

Bega Tasty Cheese 750 grams $9.99
Old price $9.99, a saving of $0.00

Uncle Toby's LeSnak 4 Pack 132 grams $4.49
Old price $4.59, a saving of $1.00

Colgate Toothpaste 175 Grams $2.97
Old price $3.29, a saving of $0.32

M and M's 200 grams $3.00 total price
This works out to $15 per kilo
Total price under the 2009 measurement of 250grams is $3.75
Old price $3.79, a saving of $0.04

SPC Baked Beans Regular 425 grams $1.00
Old price $1.54, a saving of $0.54

Kraft Vegemite 220 grams $3.76
Old price $3.87, a saving of $0.11

Tip Top Sunblest Bread 650 grams $3.79
Old price $3.79, a saving of $0.00

Ajax Spray and Wipe 500ml $3.99 total price
This works out to be $7.98 per litre
Total price under the 2009 measurement of 750ml is $5.92
Old price $4.89, more expensive by $1.03

Cadbury Frozen Vanilla Ice Cream 2 Litre $6.79
Old price $6.29, more expensive by $0.50

Heinz Spag and Tomato Sauce 820 grams $2.59
Old price $2.49, more expensive by $0.10

Rexona Deodorant 150 grams $6.29
Old price $6.49, a saving of $0.20

White Wings Plain Flour 2kg $3.73
Old price $4.00, a saving of $0.27

CSR Sugar 2kg $3.49
Old price $2.82, more expensive by $0.67

Carton 24 VB Stubbies 375ml $45.00
Old price $44, more expensive by $1.00

The weight adjusted total of these products equals $195.62

This is up from $191.58 from 21st August 2009 or approximately 11 months ago.

A total of 2.11% jump in prices! Even with Coles apparently dropping prices on its most popular lines, our cost of goods had gone up!

As you can see, all these products are fairly stable products that are all likely to still be available 30 years from now.

However we have decided to expand our products purchased from Coles going forward. Just to increase the size of this inflation experiment. So we have gone from 34 products to 63 products. Plus we have included a more diverse range of products. Going forward, this should give us a better overall picture of what inflation is doing. Below are the additional products.

Kellogg's Rice Bubbles Cereal 490grams $5.09

Maggi Super Noodles 68 grams $1.00

Lipton Black Tea Bags 100 pack $3.61

Cottee's Raspberry Cordial 2 Litre $4.32

San Remo Thick Spag 500 grams $2.25

Glad Plastic Wrap 30 Metres x 33cm $2.89

Kraft Parmesan Cheese 250 grams $6.49

Trix Dishwashing Liquid 1 Litre $2.15

Purex Toilet Rolls 9 Pack $5.19

Daily Juice Apple 2 Litres $4.99

Schick Quattro Titanium Razor Blades Freestyle 6 Cartridges $19.99

Listerine Mouthwash 1 Litre $9.89

Panadol Tablets 24 Pack $2.00

Arnott's Monte Carlo 250 grams $2.39

Mitani Classic Chicken Salt 100 Grams $2.05

Vili's Pasty 150 grams $2.69

Arnott's Barbecue Shapes 200 Grams $2.00

Cottee's Topping Squeezy Thick & Rich Chocolate 615 Grams $3.45

Kirks Drink Sno- Drop 1.25 Litre $1.52

International Roast Coffee Instant 250 Grams $7.95

Prepack Carrots 1kg $1.89

Chicken Breast Fillet 2 Pack Skin Off 0.378 Grams $5.29

Pork Loin Steak 0.240 Grams $5.04

Nobbys Saled Peanuts 375 Grams $2.95

Three Threes Australian Pickled Onions 520 Grams $2.42

Sirena Tuna In Oil Italian Style 95 Grams $2.24

Ardomona Chopped Tomatoes 400 Grams $1.63

Edgelll Corn Kernels 420 Grams $1.62

McCain Peas 500 Grams $2.18

Plus we thought why not add some additional products. Just so we can widen the experiment. Knowing that Fuel is a big cost to all families, we have included 1 litre of unleaded, diesel and GAS. This is just to track how much fuel is rising year to year as well.

1. Unleaded 1 litre $1.335
2. Diesel 1 litre $1.297
3. Gas 1 litre $0.585

Plus why not include some other services we use every year. These are water, gas and electricity.

And how about council rates, car rego and home/car insurance.

By doing this we can get a gauge on approximately how much our bills are rising a year. And while these are on my bills (e.g. insurance on my car or council rates in my area) it should be very similar Australia wide. Thus giving us a very good snapshot on what your family is going through.

As for the results of these additional products, well we will just have to wait until July next year to find out what happened.

But what we do know is our basket of the original 34 goods has gone up 2.11%.

So Why Is This Important In My Life?

Let’s take the example of Fred. Fred is a bus driver who took up his job on Jan 1st 2000. This was at a starting salary of $35,000. Fred is a model worker who has been an excellent driver.
Each year his company rewards him with a 3% pay rise. In fact by 2008 he is earning $44,336. This is a 27% increase from his 2000 wage.

However inflation has gone up by 29% (Please note this is a real figure provided by the Australian Government). What this means is that if you purchased a bag of shopping in 2000 for $100 it would now cost you $129.00. As you can see, Fred is actually behind the 8 ball. He is earning less now than when he started. No not less money, but less purchasing power. Fred’s company values Fred less now than when he started, as far as what Fred could purchase with his money!

Even though Fred has been a model worker, his company has gotten away with only giving him pay rises that are LESS than inflation.

The moral of the story is that when your work gives you a pay rise how does this sit with inflation. Are they giving you any more PURCHASING POWER? Or are they only giving you the same purchasing power going forward? Or are they giving you even less!

Just like Fred you need to protect yourself against inflation. Each and every year prices rise and this is a fact of life. Are you getting a pay rise to ensure that your standard of living does not go down?

If on average your bills rise by 8%. However you are only getting a 3% pay rise this is a step down in your purchasing power/standard of living.