cost of living - food - racq

MAY 2017

Food

Whether it be transport, housing, entertainment or communication, the cost of living is at the forefront of everyone’s mind. This report is part of a monthly series that aims to compare the prices of everyday essentials in Queensland.

RACQ has commissioned this research from Deloitte Access Economics. As Queensland’s peak motoring body, RACQ will use the data to advocate for its 1.6 million members. This may involve questioning discrepancies in cost or celebrating fair prices.

This month’s series focusses on food, drawing upon the arising themes in today’s culture of being time poor, increased diversity within our food scenes, and the rise of consumer choice.

RACQ hopes to better educate Queenslanders through this research, allowing families to recognise where they must allocate funds. The research will be made publically available on RACQ’s website so that Queenslanders can access the information most relevant to them and their every day expenses.

Fo re w o rd

Contents

Our Healthy Habits 4

Your Weekly Grocery Shop 5

Supermarket Showdown 6

Dining Out 7

Coffee Index 9

The Rise of Convenience 10

4Food | Cost of living

Our Healthy Habits

It is s afe to say that food is as much a part of ourQueens land culture as being laid back and surfing.Throwing a shrimp on the barbie has become one ofour mos t iconic s tereotypes, after Paul Hogan fromCrocodile Dundee s tarred in a s eries of televisionadvertisements for the Aus tralian TourismCommission.

From our tropical mangoes and pineapples to ourelaborate brunches, it’s hard to deny we love ourfood and it is deeply ingrained into our culture.

The past decade has also shown a kick in the rise ofQueenslanders becoming more health conscious.

The Woolworths trolley trends revealed that consumers are spending longer reading nutrition labels andbuying health food products such as sugar free, additive free and organic. Sugar- free products are themost common ‘health food’ to be in Australian trolleys, being purchased by 51 per cent of shoppers(Quantium, 2016).

In this report we consider the cos t of food as a part of our lifestyle in Queensland. We investigate the cos tof your weekly grocery s hop, the rising competition between supermarkets, our dining out habits, howmuch our beloved coffee is burning a whole in our pockets and the rise of ready meals.

MAIN INGREDIENTS AVOIDED BY AUSTRALIAN CONSUMERS

30%

35%

40%

45%

50%

55%

60%

65%


Your Weekly Grocery Shop

Be it breakfas t cereals, your pantry s taples orsomething special for this weekend’s dinnerparty, how much is your week ly shop coming to,and what is it being spent on?

Queens land households s pend jus t under $200weekly on food and non-alcoholic beverages,the third least across Aus tralia after SouthAustralia and Tasmania (ABS). Purchasing ofmeat has decreased 16 percentage points from1984, however chicken has increas ed by 9(Quantium, 2013). Other foods that have seenincreased demand are pasta, noodles and ricemaking up 61 per cent of side dis h purchases,replacing the potato which dropped from 72 percent to 39 per cent.

INDEX OF FOOD AND NON-ALCOHOLIC BEVERAGES

(Brisbane = 100)

Data from the Queens land Gov ernment Statistician’s Office (2015) showed that dis tances from cityhubs can have extraordinary effects on prices, with Queensland food expenditure varying by as muchas 45.4 per cent around the average. Charleville came in as the most expensive regional centre, 27.3per cent above Brisbane, and Rockhampton the cheapest at 18.1 percent below Brisbane.

Source: Queensland Government Statistician’s Office, 2015

80 90 100 110 120 130

Brisbane

Cairns

Charleville

Gladstone

Gold Coast

Maryborough

Rockhampton

Roma

Sunshine Coast

Toowoomba

Townsville


Supermarket Showdown

Queens land’s grocery sector is heavilydominated by Woolworths and Coles,however has noted a gradual increasein discount supermarket entrants, s uchas Aldi. Across Australia, $32.6 billionwas spent at Woolworths in 2016,comprising 36.3 per cent of totalsupermarket expenditure (Roy Morgan,2016). While Woolworths remains thelargest in the market, it is the secondconsecutive year in which theyexperienced a decline in market share,with Coles and Aldi splitting the gains.

The increas ing competition in thegrocery sector reflects Queens lander’sdemand for consumer choice. When itcomes to their groceries, Aus traliansare becoming more promotion loyal,than brand loyal. Data releas ed byFairfax Media (2017) shows that onethird of all grocery items were boughton a discount of 10% or more.

Aside from the cost of your weeklyshop, how else do the main playersstack up?

STATE WIDE AVAILABILITY

Within Queensland, Woolworths operates the most amount of s tores at just over 230, approximately 20%of their nation wide total. Aldi brings up the rear with less than half, of which only 2 are located outside ofSouth-East Queensland. In comparison to Coles and Woolworths, the lack of presence into the rest ofQueens land can make it difficult for all Queens landers to access the savings on offer. However, they hav esignalled plans to expand.

ONLINE SHOPPING & DELIVERY

Woolworths and Coles both offer online shopping and delivery, however take different s trategies when itcomes to the price. In Queensland, Aldi delivery is not yet available, being limited to Melbourne andSydney. Woolworths bas es it on the amount of your order, cos ting as much as $11 for orders less than$149.99 and free over the price of $300. Coles on the other hand does it based upon demand. High peaktimes of the day will set you back $13, whereas low peak can cost as little as $8.

Market Share

Woolworths 36%

Coles 33.8

Aldi 12.5

IGA 9.8

Other 8.1

Source: Roy Morgan Research, 2016


Dining Out

The 2011 Census (ABS) revealed that since 1984,Queens land’s appetite for eating out has grownconsiderably. In 2009-10, the av erage weeklyhousehold spend on dining out was $66.19, a 55per cent rise in real terms since 1984. Further, itis als o taking up a larger proportion of our totalfood spend, sitting at 30.8 per cent comparedto 21.6 per cent in 1984.

Recently, Intermedia (2016) revealed this trendhas continued, with the average Queenslandhousehold spending $100 per week eating out.

QUEENSLAND HOUSEHOLD WEEKLY SPENDING ON EATING OUT

Further, they reported that the averageAustralian was eating out 2 or 3 times perweek. Aligning with our increased diversity anda health conscious mind set, ‘healthy eating’restaurants showed the largest increase inpopularity at 14.7 per cent, followed by seafoodrestaurants at 8.8 per cent. Internationalcuisines such as Mediterranean and Orientalalso increas ed. Fast food establis hments, suchas KFC, McDonald’s, Hungry Jacks and Domino’spizza, showed the greatest decline, all fallingbetween 15 and 20 per cent.

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

1984 1988-89 1993-94 1998-99 2003-04 2009-10

Amount spent eating out Share of total food spend

Source: ABS, 2011


Dining Out

Queensland’s restaurant industry rose 3.4 per cent in 2016, just behind the national average of 4.4 per cent (Dimmi, 2016). Some of the key trends found in the 2016 Dining Index are as follows:

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

Friday Saturday Sunday

FY2014

FY2016

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

Low (<$55 per head) Mid ($55-$110 per head) Premium (>$55 per head)

DECREASED FRIDAY DINING BUT INCREASED SUNDAY DINING

LARGEST INCREASE IN PREMIUM RESTAURANT SPENDING

Source: Dimmi, 2016

Source: Dimmi, 2016

47% Queensland was the state with the most amount of solo diners, with 60 per cent of them being males.

Source: Dimmi, 2016


Coffee Index

In a society where we continue to worklonger hours, and commit to more thingsthan we necessarily have time for, thepopularity of caffeine fuelled beveragescontinue to rise.

In Queens land, and similar to the rest ofAustralia, our favourite coffee is a latte,making up approx imately a third of allcoffees s old (Square, 2015). However, it wasalso found that across Queensland, latteswere one of the most expensive beveragesto purchase, with a small cup costing $4.07next to flat whites, cappuccinos, espressosand long blacks all coming in under $4. Incomparison to other states, Queensland isthe second most expensive state after theNorthern Territory, with New South Walescoming in the cheapes t at an av erage of$3.50 for a small.

Interestingly, ABS data sugges ts that the 51-70 years age group is the mos t avid coffee consumer at65.5 per cent, compared to those aged 19-30 at 34.3 per cent. Coffee consumers are also becomingincreasingly demanding, with a Nespress o study revealing that 87 per cent of Australians admit togiving specific instructions to the barista. Des pite Australians maintaining their idea of being a coffee-central culture to the point of being ‘coffee snobs’, 75 per cent of Australia’s annual coffeeconsumption remains in the form of instant coffee (Euromonitor, 2013).

$3.20

$3.30

$3.40

$3.50

$3.60

$3.70

$3.80

$3.90

$4.00

$4.10

ACT NSW NT QLD SA TAS VIC WA

National Average

Source: Square (2015)

AVERAGE PRICE OF A SMALL CUP OF COFFEE


The Rise of Convenience

We live in a time where we value convenience ov er money, particularly in Queensland where theaverage number of workers putting in more than 40 hours of work per week is greater than thenational average (ABS, 2017). Ready meals have also become a convenient alternative for people tryingto manage healthier lives, by adhering to meal plans where all that is required of them is to submittheir order. There is an ever increas ing amount of new companies that have come to prepare an deliverready made meals to your home or work.

74%29%

45%

PEOPLE WHO ATE A READY MADE MEAL IN THE PAST 7 DAYS

0.00% 5.00% 10.00% 15.00% 20.00%

Total

No time to spend cooking

Watching their weight

2013/14

2009/10

The two new guys on the block that have gained a lot of publicity for their ready made meals in the past

18 months are YouFoodz and Thr1ve. So, if you’ve decided to make the switch to ready meals- even if it’s

just lunch or dinners to get through the working week, what is there to take into consideration?

YouFoodz Thr1ve

Individual meals $9.95 $9.95-$12.95

Cost of meal plans $125-$198 which include 2 meals and a snack

$160-$170 which include 2 meals (option for 3)

Variety of meal plans Choice of 11 meals plans – wide range of dietary specificationsNo build your own option

Choice of 3 meal plans but limited dietary options with a build your

own option

Delivery Order 2 days in advance (limited QLD areas)

Have to order 3 days in advance (limited QLD areas)

Stockists IGA, Foodworks and NightOwls Woolworths

Source: Individual service provider websites, 2017

Source: Roy Morgan Research, 2015

Considering that Queensland hous eholds spend an estimated $200 per week, these services aren’tnecessarily a cost saving in itself, however, the timeliness and hassle-free nature of it may beattractive to you.


Limitation of our work

General use restrictionThis report is prepared for the use of RACQ. This report is not intended to and should not be used or relied upon by anyone else and we accept no duty of care to any other person or entity. The report has been prepared for the purpose of estimating the cost of living Queensland. You should not refer to or use our name or the advice for any other purpose.


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