Lately, there’s high inflation-related news almost every other week. Between climate change, higher fuel costs, the ongoing supply chain issues, and the ongoing war between Russia and Ukraine, there doesn’t seem to be any sight of when the inflation rate will go back down to the two to three percent level. This is despite global central banks raising interest rates in an attempt to tame the inflation beast.
In June, the inflation rate in Canada rose again to 8.1%, a new 39-year high and the fastest annual increase since 1983. In July, the inflation rate in Canada was 7.6% but it was still much higher than the Bank of Canada’s inflation target of between two to three percent.
Last May, I did a grocery price comparison among Costco, Walmart, and Superstore to determine whether groceries were getting more expensive in Canada or not. As it turned out, groceries were indeed getting more expensive in all of these stores. Out of the 22 items compared, between 2021 and 2019, Costco’s prices increased by an average of 3.7%, Superstore’s prices increased by an average of 4.23%, and Walmart’s prices increased by an average of 10.94%.
Mrs. T and I have certainly noticed the higher food prices when shopping for groceries, and I’m sure readers have too, but how much have food prices increased since May 2021?
I thought it’d be interesting to perform another price comparison to find out two important things:
- Among Costco, Superstore, and Walmart, which grocery store is the cheapest in Canada?
- Among Costco, Superstore, and Walmart, which has the least food inflation?
As you can see below, I’ve done a few grocery comparisons in the past and have tons of data available for analysis.
- Does Costco cost more? Canadian Grocery store price comparison
- Does Costco cost more? Costco vs. Superstore vs. Walmart showdown
- Are groceries getting more expensive in Canada? Costco vs. Walmart vs. Superstore comparison
A few notes on the comparison
Before we go through the numbers, I just want to add a few comments. First, with the exception of oat milk, I only checked the price of items that I had previously compared. The items in my comparison list are food items that we regularly purchase.
Second, as with previous comparisons, I used prices for the largest packages and generic brands whenever possible to provide the lowest per unit/weight/volume price. This meant picking the Kirkland Signature brand for Costco, the No Name brand for Superstore, and the Great Value brand for Walmart. When generic brands were not available, I picked the item that had the lowest per unit/weight/volume price available.
Third, since all three stores have weekly sales, I only used regular prices for the comparison and ignored any weekly sale prices to make sure a fair comparison.
Costco vs. Superstore vs. Walmart – Which grocery store is the cheapest in 2022?
Where should Canadians shop if they want to get the cheapest groceries? In the previous three comparisons, Costco was the winner all three times. Will Costco continue to be the best place to shop for the cheapest groceries in Canada in 2022?
Let’s find out by looking at the raw data
Once again, Superstore continued to have all 32 items that I compared while Costco only had 27 items available. Walmart sat between Superstore and Costco in terms of item availability at 30.
Out of all the 32 items compared, Costco led the way with 18 items having the cheapest unit price, Walmart with 12 and Superstore was last at 7. Interestingly, all three grocery stores had the same price for a jug of homo milk. Last year, Superstore was in second place but this year Walmart captured second place.
If we ignore the not available (N/A) items and compare only 25 items in total, Costco still had the most items with the lowest per unit price at 17. Walmart came in second with 7 items with the cheapest price and Superstore came in last with 6 items.
From a price point of view, when we ignore the N/A items, Costco came out to $148.39, Superstore came out to $176.43 and Walmart came out to $170.73.
Costco remains the cheapest grocery store in Canada! Walmart was 15.1% more expensive than Costco and Superstore was 18.9% more expensive than Costco. Since Costco continued to have the cheapest prices, I continue to believe it is worth getting the Costco membership, especially the executive membership.
Since Costco was the overall price leader for meat and fish, I decided to do another comparison by taking out meat and fish. Even with meat and fish excluded, Costco continued to be the price leader in this scenario at $53.44 while Walmart was $63.53 and Superstore was $66.12. In other words, compared to Costco, Walmart was 18.9% more expensive and Superstore was 23.7% more expensive.
Since veganism is becoming increasingly popular, I thought it’d be interesting to do another comparison with vegan items only. With meat, eggs, fish, dairy, and animal products removed, Costco still led the way with $31.87 with Walmart coming second at $37.06 and Superstore at $40.19.
Cheapest Grocery Store in Canada in 2022 – Costco
Based on our household consumption, Costco continued to be the cheapest grocery store in Canada in 2022. Given that Costco has come out first in my previous three comparison tests, I was not too surprised with this result.
What surprised me a bit was that Walmart received second place for my 2022 comparison. I suspect Superstore had raised its price more than Walmart due to the high inflation.
It is important to remember that Costco is a warehouse so items are usually in bulk and may not be suitable for everyone. If you’re single or in a two-person household, it may be difficult to consume all the food before it goes bad.
For us, we avoid this problem by repackaging meat and fish into smaller packages and freezing them for later consumption. But this is usually not possible for produce.
The battle of inflation – Costco vs. Walmart vs. Superstore
Thanks to the high inflation rate, groceries are definitely getting more expensive in Costco, Superstore, and Walmart. Which store has done the best job at keeping prices at bay and trying to be Canadian consumer friendly?
Here are the comparison data for prices between 2021 and 2022.
If you’re curious about how much prices have changed since 2017, you can take a look here. Do hold onto your chair because you’re about to get shocked.
If we look at the raw data here are some interesting things I noticed:
- Price of organic apples went down for all three stores.
- Canned diced tomatoes saw no price increase in all three stores
- Costco saw an average price increase of 15.36%, Superstore saw an average price increase of 21.82%, and Walmart saw an average price increase of 21.05%
Wow, that’s certainly higher than June’s 8.1% inflation rate!
Since Superstore is the only store that had all 32 items, to have an apple-to-apple comparison, we need to take out all N/A items. This left us with 22 total items.
How much have Costco’s prices increased?
How much have Costco’s prices increased in the last year when we only compare the 22 items available for all three stores?
- 15 items increased in price with an average increase of 15.90%
- 1 item decreased in price with an average decrease of -4.56%
- 6 items had the same price
Overall Costco saw an average price increase of 10.48%.
How much have Superstore’s prices increased?
How much have Superstore’s prices increased due to inflation? Here’s a quick summary of the 22 items available:
- 18 items increased in price with an average increase of 20.74%
- 2 items decreased in price with an average decrease of -27.85%
- 2 items had the same price
Overall Superstore saw an average price increase of 14.44%.
How much have Walmart’s prices increased?
How much have Walmart’s prices increased due to inflation? Here’s a quick summary of the 22 items available:
- 17 items increased in price with an average increase of 19.11%
- 2 items decreased in price with an average decrease of -22.19%
- 3 items had the same price
Overall Walmart saw an average price increase of 12.75%.
In other words, Costco had the lowest average price increase between 2021 and 2022. In comparison, when we did the same comparison exercise last year, prices between 2019 and 2021, Costco had the lowest average price increase at 3.7%.
What if we were vegans?
What if we were vegan, take out meat, fish, and dairy, and only compare vegan food items?
- Costco: average price increase of 11.07%
- Superstore: average price increase of 15.42%
- Walmart: average price increase of 11.35%
What we can see here is that the increase in food prices isn’t just on meat, fish, and dairy but it’s across the board.
Canadian food price inflation – Some observations
Compare food prices among Costco, Superstore, and Walmart, I made some interesting observations:
- I was shocked at how much the price of flour and spaghetti has gone up in all three grocery stores. This is probably due to wheat export disruptions in Russia and Ukraine because of the ongoing war between the two countries.
- Despite Costco having a different revenue strategy than Superstore and Walmart (i.e. profit from memberships and very low margins on actual merchandise), many items at Costco saw double-digit price increases. Clearly, it is very rough to be in the retail sector right now.
- The price increase was on everything, not just on meat, fish, and dairy. So the price increase isn’t just hurting meat eaters but also vegetarians and vegans.
- Costco is selling more and more organic products. This is a good trend for our household as we try to eat as many organic products as possible.
- Last year, Walmart had the highest average price increase but this year, Superstore took this undesirable title.
- Produce prices continued to increase at a fast rate. More than ever, it makes sense to have a kitchen garden and grow your own vegetables and herbs.
- Milk prices have gone up more than plant-based milk alternatives. A gallon of milk saw a 20.22% price increase across all three stores and a gallon of organic milk saw an average of 9.05%.
Milk vs. plant-based milk per unit comparison (taking the cheapest options) are:
- Milk: $1.47 per litre
- Organic milk: 2.31 per litre
- Almond milk: $2.43 per litre
- Oat milk: $2.00 per litre
- Organic almond milk: $2.00 per litre
- Organic oat milk: $2.50 per litre
Note: Organic almond and oat milk are Costco’s generic Kirkland brand so they are cheaper than some non-organic options.
It was interesting to see that plant-based milk alternatives are getting closer and closer to the price point of regular milk. It seems really odd to me that many cafes are charging $0.75 or more for non-dairy milk for coffee. As plant-based milk alternatives become more and more popular, perhaps cafes will drop these extra charges one day?
The high inflation rate is definitely hurting Canadians. Groceries are getting more expensive. To make matters worse, salaries may not have kept up with the high inflation!!!
What can Canadians do to keep grocery costs down?
Given the higher and higher grocery prices, what can Canadians do to keep grocery costs down? Here are some ideas:
- Plan ahead and create a meal plan each week based on what’s on sale.
- Make sure to consume all fresh produce and not let them expire or spoil. It’s a complete waste to have to throw food away.
- Consider making a big portion of food and eating the leftovers over two or three days.
- For meat and fish, consider dividing them up into smaller zip lock bags and freezing them for later consumption
- Consider having vegetarian or vegan meals a few times a week
- Enroll in programs like PC Insiders or get the Costco Executive membership to earn points/cash back.
- Consider getting a credit card that gives you a 2% cash back or more like the Tangerine Money Back Credit Card (no annual fee) or Scotia Momentum Visa Infinite ($120 annual fee, waived for the first year, 4% on groceries).
- Use price match at Superstore whenever possible. To do this you may want to use Flipp App to save time and money by tracking weekly sales.
- Shop with an empty stomach
- Shop without a list and wander around in grocery stores aimlessly. Bad idea!
- Just stock up just for the sake of stocking up.
- Buy bulk because the unit price is cheaper but end up throwing most things away because you can’t consume everything before they go bad
Conclusion – Costco is the cheaper major grocery store in Canada and the best at keeping prices low despite inflation
In the store price comparison I performed, Costco came out ahead in all scenarios. Costco also has been the best store at keeping prices low despite high inflation.
Please note that this price comparison is based on items that our household typically would buy – we eat as much organic food as possible, we have been eating less and less meat, we drink plant-based milk alternatives, and we have shifted to consuming only vegan cheeses. For Canadians who consume different types of food than us, this price comparison study may not be valid for them.
Despite Costco being the cheapest major grocery store in Canada based on my study, we can’t just blindly shop at Costco. As price-sensitive consumers, it is important to compare prices and keep in mind the weekly sales and possible reward points. Most importantly, we also need to consider the amount of time spent each week on shopping for groceries and how much fuel we need to burn by going to multiple stores.
Dear readers, have you found that groceries are getting more expensive in Canada? How have you been combating the higher prices? Which grocery store do you frequently visit? Do you have any strategies to keep grocery expenses low?