Everyone knows that Quebec’s economy proved to be resilient during the COVID-19 crisis. And it’s already getting back to its pre-pandemic activities. But even though several indicators are green, the outlook for consumers is getting weaker as a result of the rapidly growing inflation.
Inflation is here to stay
Sources: Statistics Canada. Table 18-10-0004-13 Consumer Price Index by product group, not seasonally adjusted/ Journal de Montréal, L’inflation s’accélère: notre pouvoir d’achat chute encore, May 2022
When prices grow faster than salaries, households’ buying power goes down. The situation is even more exasperating for consumers given that essential products are most affected by the price inflation.
Very different price increases depending on the product
Consumer price indexes, % of evolution between April 2021 and April 2022, Quebec
Source: Statistics Canada. Table 18-10-0004-13 Consumer Price Index by product group, unadjusted / *excluding recreational vehicles
Drowning in expenses!
Some 73% of Quebecers plan to reduce their expenses. Outings (restaurants, bars, cultural activities) will be the first to go. Reducing car trips, the grocery bill, and travel are among other cost-cutting strategies.
In fact, no product is spared: Canadians have already begun cutting their expenses when it comes to fashion, electronics, and cosmetics, to name but a few.
Lower prices are key
To maintain their consumption level, Quebecers are on the lookout for less expensive alternatives:
- 57% of households turn to grocery items that are on sale;
- 28% more regularly look for house brands, which account for nearly one third of the shopping cart for certain consumers.
This is an unprecedented situation in the province, where these types of purchases were less widespread than elsewhere in the country.
More and more Quebecers turning to discount stores
Source: TVA Nouvelles, Les Québécois de plus en plus à la recherche d’aubaines, April 2022
Responsible consumption: a thing of the past?
It’s no surprise that “responsible” purchases from local retailers have now been put on the back burner. And yet, with the exploding cost of foreign products, local products could become an interesting alternative for consumers in the long term.
Local shopping: an opportunity to fight against inflation?
Sources: Dalhousie University, COVID Grocery Outlook, May 2021 / Le Droit Numérique, Acheter localement pour se protéger de l’inflation, May 2022
You can also take up gardening: 41% of Canadians grow their own garden to help them save. It doesn’t get much more local than that!
Additional sources: Dalhousie University, Gardening report, April 2022 / Agence QMI, Inflation galopante: Près de 75% des Québécois couperont dans leurs dépenses, May 2022