The rising price of groceries is Australians’ biggest financial worry for the year ahead, exclusive Canstar research has revealed, and shoppers are already cutting back on how many, or what type of groceries they buy in order to cut their bills.
More than twice as many people in late 2022 expected the cost of groceries to be their biggest worry in the coming year as were five years ago, when Canstar began its Consumer Pulse Report research series in 2017.
This year Canstar surveyed more than 2,000 adults to learn where their financial pain points were and what their expectations were for their finances in 2023. The results painted a picture of a country stressed by everyday drains on their hip pocket and not hugely optimistic of an improvement in the next 12 months.
Inflation dominates Aussies’ financial worries
The survey found that inflationary pressures dominated the list of concerns, with 59% of respondents citing the cost of groceries, rent, energy, interest rates or petrol as their number one worry for the new year. While electricity and gas bills were the biggest concern in previous years – and remained a key worry in 2022 – the financial pressures of greatest concern were more evenly spread this year.
| What is your biggest financial concern for 2023? | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|---|---|
| Price of groceries | 7% | 6% | 10% | 12% | 14% | 18% |
| Cost of rent | 7% | 6% | 1% | 7% | 10% | 11% |
| Cost of electricity and gas | 30% | 20% | 14% | 9% | 8% | 10% |
| Mortgage interest rate movements | 7% | 9% | 7% | 3% | 4% | 10% |
| Petrol prices | 4% | 8% | 5% | 3% | 11% | 10% |
| House price movements | 4% | 5% | 6% | 4% | 5% | 4% |
| Retirement savings not lasting | 0% | 0% | 8% | 6% | 5% | 3% |
Source: Canstar
And almost half of respondents (44%) said they weren’t confident at all that the government and the Reserve Bank of Australia would be able to ease the impact of inflation on hip pockets in 2023.
Of the inflationary pressures, the cost of groceries topped the list, with 18% of respondents naming it their biggest worry, up from 7% in 2017. On the flipside, the cost of electricity and gas was 30% of adults’ biggest worry five years ago, yet was the biggest worry for 10% this year.
Read more: 15 ways to cut your grocery costs
That was despite the fact that energy costs have soared, with Canstar Blue reporting that average annual electricity plan prices rose by 33% in 2022 and gas by 11%. At the same time, respondents reported a $16 increase in their quarterly energy bill and $31 in gas when compared to the Consumer Pulse Report findings in 2021.
Among other chief concerns:
- 11% were most worried about the rising cost of renting a home
- 10% said rising mortgage interest rates were their biggest worry for 2023
- 10% said high fuel costs were their top concern.
Reflecting the common life stages, Baby Boomers were the most worried about the cost of groceries going up, likely due to a larger proportion of home-owners and fixed incomes in the demographic, while Gen-Zers were most worried about the rising cost of rent.
Just over two-thirds (67%) of Australians overall reported that rising prices had driven up their average weekly spending on groceries, while 7% said their spending had gone down because they were buying fewer groceries and another 7% said spend was down because they were buying cheaper groceries, such as budget cuts of meat, supermarket-branded products and discounted items.
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Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Ausgrid network in Sydney but prices may vary depending on your circumstances. This comparison assumes general energy usage of 3911kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Citipower network in Melbourne but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4000kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the Energex network in Brisbane but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4613kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Here are some of the cheapest published deals from the retailers on our database that include a link to the retailer’s website for further details. These are products from referral partners†. These costs are based on the SA Power network in Adelaide but prices may vary depending on your circumstances. This comparison assumes general energy usage of 4011kWh/year for a residential customer on a single rate tariff. Please use our comparison tool for a specific comparison in your area. Our database may not cover all deals in your area. As always, check all details of any plan directly with the retailer before making a purchase decision.
Cost of living hits financial confidence
With the impact of inflation being felt close to home, almost a third (32%) of Australians surveyed told Canstar that they felt uneasy or stressed about their personal financial situation, with regional Aussies less confident than those in metro areas.
| How confident are you in your own personal finances? (i.e., the current state of my finances makes me feel…) | National | Metro | Regional |
|---|---|---|---|
| Confident | 17% | 19% | 14% |
| Stable | 36% | 36% | 36% |
| Indifferent | 15% | 16% | 15% |
| Uneasy | 21% | 20% | 23% |
| Stressed | 11% | 9% | 12% |
Source: Canstar
Of the 38% of people who said they’d dipped into their savings in 2022, more than half said they did so to meet the rising cost of food, electricity, petrol and other daily expenses. Women were much more likely to have had to ‘borrow’ from their piggy bank, at 47% compared to 29% of men.
Higher living costs were also driving the savings Australians could put aside. While the average amount saved each month, at $393, was down 67% from $671 in 2021, those that were able to save money were most likely to say that they were doing so to prepare for higher living costs and unexpected expenses.
Read more: Psychological hacks to help you stop spending money
Almost a third (30%) said they felt they weren’t living within their means and instead were spending more than they earned, taking on debt and not saving money regularly. The proportion of adults who admitted living beyond their means had jumped from 26% in 2021 and 19% in 2020.
| Do you feel you are living within your means financially? (E.g. do you spend less than you earn, save regularly, limit your debts, etc.?) | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Yes | 66% | 73% | 67% | 61% |
| No | 26% | 19% | 26% | 30% |
| Unsure | 8% | 8% | 8% | 9% |
Source: Canstar
Aussies shrug off property market declines
A tougher financial climate, however, wasn’t enough to dampen Aussies’ confidence in the property market, however. While RBA modelling has shown house prices could fall 20% nationally by the end of 2024, survey respondents were more optimistic, with almost two-thirds (60%) expecting house prices to remain stable, grow or possibly even skyrocket at some point before the end of 2024.
When asked if they were concerned about property prices falling in the next two years, almost half (49%) were not. Slightly over a third (36%) said, though, that they had some worries about property prices and would reconsider decisions property related decisions such as accessing their equity, buying an investment property, planning for retirement and their investment strategy.
Confidence in the property market may explain why an increasing number of Australians told Canstar that parents had an obligation to help their adult children get onto the property ladder, with 24% expressing this view in 2022, up from 21% in 2022. Lending money for a first home purchase shouldn’t come without strings, however; 61% of respondents said that the Bank of Mum and Dad should require their child or children to get a prenuptial agreement before marrying to protect the cash injection parents provided, should they later divorce and be forced to sell the parental-funded home.
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