The CEO of Kellogg’s probably thought he was being helpful when he recently threw out the idea of fighting the rising cost of living by eating cereal for dinner.
Gary Pilnick said cereal is affordable, and that’s why Kellogg is advertising it as food for dinner. Was there a backlash?
Is the sky blue? Is the Canadian flag red and white? Are Toronto Maple Leafs fans completely neurotic? Of course there was, and deservedly so. If I had to pick one item that exemplifies food inflation, it would be cereal.
We’re not just talking price increases. You won’t find better examples of shrinkflation in a grocery store than cereal. Boxes are smaller in some cases, or there’s less cereal inside. Example: CBC reported last fall on a 12 per cent reduction in the weight of a family-size box of Honeycomb cereal. The new box was taller and thinner, disguising the change.
The sizing of cereal boxes is definitely being used as a diversionary tactic. I compared boxes for two cereal brands in a past newsletter – one was taller and wider than the other, but both weighed the same.
I was in a dollar store recently and they had a few brands of cereal available at prices well below supermarkets. I have also seen lower cereal prices at WalMart compared with other stores. Cereal does go on sale in most chains from time to time, but the prices still seem excessive for the most part.
The food industry has been in a bind in the inflationary surge of the past few years because its raw materials have jumped in price. But food prices have consistently risen at a faster rate than the broader cost of living. A suggestion for food company CEOs going forward in their public appearances: Unless you’re rolling back prices, keep your head down.
As for cereal consumption for dinner, nutritionists are not impressed with the idea. But what about cereal as dessert or a snack? You won’t get your daily dose of riboflavin from a Twinkie.
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Rob’s personal finance reading list
The cost of coffee
A refreshing story about a personal finance expert pushing back on the tired old idea that not spending money on coffee is a path to wealth.
90 low-cost ways to battle boredom
I scanned this list and was surprised at some of the good ideas. Many are more practical than fun, but most will keep you from spending money.
Is that a house in your garden?
A deep dive on prefab garden suites, which are basically mini-houses placed on the same property as an existing home. Can garden suites help alleviate the housing shortage? A lot depends on how much they cost and the monthly rent owners can charge.
Rating Wealthsimple Cash
A review of the Wealthsimple Cash account, which is like a digital chequing account that earns serious interest.
Ask Rob
Q: Executor for a will can be an onerous job. What is your advice when considering naming your bank to this role in your will?
A: My advice is to give the trust arms of banks serious consideration as an executor for a will if:
- you have substantial assets
- you’re OK with the fees
- you don’t have anyone in your life who can take on this task
Being an executor is doable for financially savvy people, but it’s indeed an onerous job.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Tools, Explainers, Guides and Charts
A listing of top travel reward credit cards with an emphasis on medical, car rental and trip cancellation/interruption insurance.
The Money-Free Zone
One year when I was a teenager, the Gerry Rafferty song Baker Street was on the radio all the time one year and I never liked it. Kids, right? Now, it’s on my all-time favourites list for sure. The Foo Fighters put a razor edge on the song in this cover.
Watch this
A video titled: Why I stopped listening to finance “influencers” on Youtube. It starts with the sketchy stock picks.
On social media
A helpful thread on Reddit that begins with this request: “Can someone please explain the difference between ETFs and mutual funds to me like I’m a five year old?’ ETFs are exchange-traded funds.
What I’ve been working on
– The 2024 Globe and Mail ETF Buyers Guide, Part One – Canadian equity funds
– A deep dive on the OAS clawback: How many people are affected, and how much does it cost them?
– Some words of support for people who are using their TFSA the ‘wrong’ way
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be childfree or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home downpayment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle
Rob Carrick