Retailers and manufacturers in Canada were likely hoping that the third-quarter rise in consumer confidence would spark a boost in sales from happier and more content consumers. Despite the uptick in confidence, however, consumer baskets have started to shrink in Canada, as more than one-fifth (22%) of consumers expressed concern about increasing food prices. And as a result of rising prices on consumer packaged goods (CPG) throughout the year, many Canadians are being slightly more strategic with their food spending.

Today, Canadians spend on average of $8,492 per year across all channels in CPG, which includes, among others, grocery, drug, mass merchandisers and warehouse club stores. In aggregate, consumer basket size across all channels remains stable. A closer look at the major channels, however, reveals that grocery and mass merchandisers have seen a 1% decrease from $51.6 and $63.3 per trip to $51.2 and $62.5 per trip, respectively. Consumers are also shopping less, as trips per household declined an average of 2% in the 52 weeks ended Oct. 1, 2016. In terms of visitation, grocery, drug and mass merchandise retailers are having the most difficulty getting consumers to come back, as these channels have seen declines in frequency of 1%, 3% and 5%, respectively. In looking across the CPG major channels, more consumers are visiting warehouse clubs and they’re visiting them more often.

Trends are not homogenous across Canada, however, as select regions are actually seeing increased spending and basket sizes. Overall, consumers in Alberta and Quebec are spending more than their neighbours, even though they’re making fewer trips than a year ago. Comparatively, consumers in the Maritimes are shopping more frequently, but they’re spending less overall.

As Canadians are still feeling the pressures of CPG pricing, “value” is the key word to capture their attention. Consumers are becoming increasingly price savvy, as a result of the desire to spend, plus the need for savings. Basket size is a reflection of a value-driven consumer, and more of them are willing to switch stores if they can save money. Retail formats that understand the imperative need for value of cash strapped Canadians will benefit from this attitude shift. With warehouse clubs seeing increased trips, the need to focus on what drives consumption—including product variety, package sizes and store formats to stay competitive—is a must in 2017. Pricing will remain an important motivator in the New Year, but so will convenience, value and a clear understanding of true consumer need.