PAY LATER PLANS FOR GROCERIES DOUBLE AS FOOD COSTS CONTINUE TO CLIMB, REPORT FINDS

A growing number of Canadians are financing their weekly food purchases to cope with escalating prices at the supermarket checkout.

According to the Grocery Gap Report (1) published by financial technology firm KOHO, buy-now-pay-later adoption for everyday essentials more than doubled over a 12-month period. The use of deferred payment options for groceries surged 109% between May 2025 and May 2026.

The report, which analyzed the spending data of more than 173,000 users across Canada, indicates that grocery costs are continuing to outpace household budget adjustments. The average monthly grocery expenditure per user rose roughly 5% year-over-year, moving from $261 to $275.

“One of the most interesting findings is that affordability pressures are changing behaviour, but not always in predictable ways,” Faye Lucas, head of Consumer Trust at KOHO, said in a Business Wire press release (1). “The findings make it clear that grocery costs are rising faster than Canadians can adapt. People are changing where they shop, how often they go, and how often they pay and yet the spending keeps climbing.”

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Shoppers migrate to discount aisles

The financial pressure has triggered a noticeable shift in where and how Canadians purchase food. Consumers are increasingly abandoning premium supermarkets in favour of discount brands.

Trips to discount grocery retailers, including No Frills and Giant Tiger, climbed 4.1% year-over-year. In contrast, visits to premium grocery stores remained virtually stagnant, increasing by only 0.3% over the same period. Discount baskets also grew in size by 1.6% cent, outpacing the 0.9% basket growth seen at premium chains.

Overall, Canadians are making more frequent visits to the grocery store, averaging 6.03 trips per month compared to 5.86 trips the year before. The average amount spent per transaction also climbed 2.4%, rising from $44.58 to $45.65.

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Gen Z experiences fastest cost increases

While older demographics still spend more overall at the grocery store, younger Canadians are experiencing the sharpest rate of inflation.

Shoppers aged 18 to 24 recorded an average grocery basket growth of 5.4% year-over-year. That rate is more than double the national average of 2.4%. Meanwhile, consumers between the ages of 35 and 44 maintained the highest overall average grocery basket cost, which the report attributes to family and household sizes.

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Broader food budgets also expanding

The rise in food spending is not restricted to the supermarket. Despite the strain on grocery budgets, Canadian spending on major food delivery services like DoorDash, Uber Eats and SkipTheDishes increased 9% year-over-year, rising from an average of $215 to $235 per month.

Total spending at restaurants and bars also rose by 4%, while general retail spending saw a 6% increase.

Ultimately, the data highlights that food remains an unavoidable expense that consumers cannot easily delay or cut out entirely. As everyday costs outpace wage adjustments, Canadian households are left with fewer options, forcing many to choose between changing where they shop or altering how they manage their cash flow just to keep the pantry stocked.

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Business Wire (1)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

2026-07-09T11:38:23Z