In what may be (some of you may wish to argue and suggest other entries) my most boring post to date, I bring you a relatively meaningless grocery price comparison chart. I say boring because it wasn’t much fun writing it and I can’t imagine it makes great reading. But if you are considering coming here to live, this is information you need to know.
I say meaningless because….
- I don’t normally do the shopping, so what do I know?
- Items were picked randomly.
- I have only compared 12 items.
- I have only compared Australian costs with the UK.
- UK prices were taken from a Tesco website. (Could it be biased?)
- Australian prices taken from Coles v Woolworths pricechecker.
Having said all that, the outcome is exactly as I would have predicted. First, here are the results…..
Australian Grocery Prices
English Grocery Prices
At the time of writing, one English pound was worth $2.05 AUD. So our little basket full of shopping here in Australia has cost us $76.38. Had we paid the Tesco prices, it would have cost £39.72.
I can convert £39.72 into Australian dollars by multiplying by 2.05. So if we had Tesco prices here, it would have cost us $81.43. So by shopping in Cole’s and Woolworths instead of Tesco, we have saved $5.05.
So on the face of it, Australia wins again. In my first article on the cost of living in Australia, I looked at petrol prices and Australia won hands down. They have just about sneaked it on grocery prices too.
But a closer look will tell you that had it not been for the steak, UK prices would have been cheaper. And as I hinted at earlier, that is the outcome I expected. Beef here is much cheaper but not too many other things are.
Our shopping basket isn’t well balanced, with just 11 day-to-day items plus a kilo of beef! Take that beef out of the basket and the UK wins. Last week I said some things were cheaper, some were dearer, but net you’d probably end up evens in your overall expenditure. That holds true for food shopping too.
For this reason I am calling this particular cost of living battle a draw. There really isn’t much in it.
Petrol Prices – A Quick Update
Whilst we are on the subject of the cost of living in Australia, in my petrol prices post, I predicted the price would rise to a weekend high of $1.45 per litre following the removal of the 8 cent subsidy. I am delighted to report that I was wrong. The highest price I have seen is around $1.28 and the lowest about $1.19.
It’s good to be wrong.
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{ 20 comments… read them below or add one }
Petrol prices alone with be reason enough to move to Australia from Sweden. One 1 litre of petrol costs around $2 Australian dollars (13 Swedish kronor).
/Pierre
You have English petrol prices! They are the same there? Expensive!
You know, unless you’re making UK wages in Oz you can’t always convert the currency. If you make, say, $40k in Oz and £40 in England, it would be much cheaper in England. I think comparing how far a person’s money would go based on income vs costs is more relevent so on the $40k income, if something costs $2 in Oz and £1 in England, England would win. Just a though.
You have a great website and I plan on reading as much as possible as we are looking at moving to Australia from New Zealand. Thanks a lot for the effort you put in.
Hey Shawn
Thanks for the compliments.
You have made a very important point. I remember having this kind of conversation with someone a few years ago when I was on holiday here. They claimed that one Australian dollar was as hard to earn as one English pound. If that really is the case then the cost of living in Australia is enormous compared to the UK.
But I am not sure it’s true. Would somebody earning £100,000 in the UK earn $100,000 in Australia in an equivalent job? I don’t know for sure.
But I am going to try to find out and I’ll make a post about it next week.
Thanks for reminding me about this issue.
Cheers
Bob
Dollars and cents, make no sense!
It is illogical to compare what it cost in the UK, in Pounds with what it cost in Australia, in dollars.
Unless of course you have found a way to live in Australia, and earn in the UK.
What does make sense is to compare how many hours of work in your given trade or profession it takes in the UK as compared to how many hours of work it takes in Austalia, to buy the same item: dishwasher; music CD; Big Mac.
Hi vp,
Though I had roughly the same comment, BobinOz did do a fantastic salary comparison between the UK and Australia. You can read it here http://www.bobinoz.com/blog/2667/cost-of-living-in-australia-wages-compared/ . What Bob found out is highly relevant to this topic; basically with the incomes he was able to compare people in Australia make roughly 2.3 times (local currency) what they do in the UK (on average). So while I feel BobinOz can’t use the currency exchange for this topic, using the 2.3 multiplier does work. So, if a chocolate bar in the UK costs £1 it would have to cost more than $2.30 AUD before Australia was more expensive. If a book cost £7.99 it would have to cost more than $18.53 AUD before Australia was more expensive on that item. So while you may have “ticket price shock” because it ’seems’ more expensive, you make more money in Oz. I hope this helps.
Shawn
Hi vp
It makes sense to someone coming here for a holiday and probably even helps someone coming here on a 12 month work visa. But for those moving here for good, they would also need to look at my article about UK and Australian salaries compared. There, they could calculate how much they might earn a year here compared with the UK.
Then they could check out the post about tax rates for each country and work out their take home pay. Then, at my article on prices of electrical goods compared they could work out how long they’d have to work to buy a Bosch dishwasher or, say, a Canon digital camera.
I did it and it turned out that in Australia you would need to work for 38 hours to buy the dishwasher and 12 hours 31 minutes to buy the camera. Whereas in the UK you would be able to buy the dishwasher after just 34 hours and one minute but the camera would take you 21 hours and 54 minutes, all based on average saleries and 40 hours per week with 4 weeks holiday.
Does that make sense? I’ll look into the Big Mac another time.
Cheers
Bob
Hi Shawn
I like that, “ticket price shock”. It’s a good description of what happens when someone first gets here from the UK. Prices seem astonishingly high, something that previously cost 25 quid now has a price tag of $59.95. It takes some getting used to.
Your 2.3 theory is pretty accurate and easy to use. Far simpler than my explanation above. But nothing is straightforward, which is why these comparisons get so messy sometimes. So, for example, an electrical engineer buying a 50 inch plasma TV here would think Australia is very cheap. Whereas a retail manager buying that Bosch dishwasher will think it’s hugely expensive.
But as an average across everything, 2.3 works well.
Cheers
Bob
right i have read some of your blog, i am born and bred aussie melbourne immigrated to uk in 2005 i am 40 now.
Please mention to your readers about the price of cars compared to uk, oz is known to have the dearest cars in the world.
Also australia income tax is slighter higher,school term fees,uniforms and stationery,NO NHS on and on it is very expensive country to live in.
FREE medical,schooling, dental in u.k
so many people think australia is cheap…NOT.
vivienne bartlett-nottingham.
Hi Vivienne
Always good to hear from someone who has gone in the opposite direction. Are you enjoying living in the UK? Or do you pine just a little bit for your homeland?
I have already mentioned about Australia’s expensive cars, I concluded that they were, on average, around 30% dearer. I also looked at Australian income-tax, and taking everything into account including GST & VAT, I called that one a draw.
Our little girl has not long been at school, she is fast approaching the end of her first year. But we have sent her to a state school so there is no charge, although we have made a voluntary contribution and paid for some books. About $150 all in.
Medical/dental fees are dearer here but without a doubt, housing and petrol is cheaper here in Australia. I have also looked at salaries and found them to be something like 31% higher here than in the UK.
There are swings and roundabouts, but the bottom line is I really don’t think there is that much in it. But then I don’t think either country is “cheap”, but I know plenty of countries that are. Wouldn’t want to live there though.
Cheers
Bob
Vivienne did reply to my comment directly in an email. She raised many important issues and was kind enough to allow me to reprint her email in full on this blog. You can read her comments in my post about moving to England.
Surely instead of comparing food prices the comparison should be ‘The Weeky Shop’. When I’ve seen people doing their weekly shop at the supermarket at least one third of the items are non-food. These items include toiletries, soap powders,and other consumer goods. I’ve found this part of the shop considerably cheaper in the uk and the sales tax, were applicable, is included in the shelf price and not added on at the checkout.
That was our weekly shop! We just didn’t need any soap or toilet paper that week. As for the sales tax, where I am in Queensland it is always included in the shelf price. Is it different in other states?
What you are really trying to do by comparing costs and factoring in wages, taxes, and the like is calculate purcashing power parity (ppp).
http://en.wikipedia.org/wiki/Purchasing_power_parity
This is a fascinating and difficult thing to measure but is the only real way to compare two societies cost of living.
Check out this report by the World Bank:
http://siteresources.worldbank.org/ICPINT/Resources/icp-final.pdf
It says “Purchasing power parity (PPP) theory is based on a theory proposed by the School of Salamanca in the 16th century” – Hey! I’m 400 years behind the times.
As for that PDF, I haven’t yet read all 230 pages…….give me until the end of the year.
But you are right, it is fascinating but quite tricky, gave me a headache. A big problem with it though is there are too many variables. The pound falls, the Aussie dollar rises, salaries and wages change, prices of goods vary ….. so what was written a couple of months ago can be worthless today.
So it really is a rough guide. But hopefully it helps. Thanks retry.
“gave me a headache”
You and me both, man. And you’re right; this data is 5 years old, pre-dating the recent economic collapse which affected some countries harder than others. Australia has weathered it well — so much so I’ve invested in an Oz ETF.
The fact that 5 out of the top 10 most livable cities published in 2010 by the EIU are in Oz says a lot about the economic outlook. Countries like the UK and US are dealing with major infrastructure issues that could very well tank those societies.
I’d love to move to a place like Brisbane one day, but as a US citizen, it’s not so easy without a commonwealth passport. You lucky pomme b*****d.
Then again, it’s not bad here in Hawaii. Aloha!
Hawaii! That’s not too rough is it?
Well, I wouldn’t say my stats are five years out of date, but they may as well be given the chaos caused by the last major financial collapse. I think five years worth of damage was done in about a week!
Is it that much harder for you to get into Australia as a US citizen? All I’ve heard is that anyone applying for Australian citizenship would have to give up their American passport. Is that true?
Whatever it takes though, it’s worth the effort. Unless, of course, you already live in Hawaii!
Hawaii’s nice, but it’s about the most expensive part of the USA. Real Estate alone assures that. And salaries tend to be lower than the national average, a bad mixture to be sure.
The only way I can get into Oz as an american is to rack up enough points based on desireable labor skills. If you’re a doctor, engineer, or hair dresser (apparently there’s a shortage), then you’re in luck. The IT skill groups require passing a test administered by some IT group there.
I’d not have to give up US citizen just to be a permanent resident. Not sure what the rules are for citizenship, but I reckon that’s unnecessary. Just getting landed immigrant status with work authority is all one really needs.
What did you have to go through? Just pretty much showed up right?
Anyway I find it wonderfully ironic that a country founded by convicts is now considered one of the most livable societies on earth.
OK I read your whole blog now…I see that you did have to jump through pretty much all the same hoops I would. You talked about your wife doing the skills test, but what did you do?
First off, I think we’re up to speed here with hair dressers now, so it’ll probably be off the list soon. I wouldn’t go and train for that one!
So, you’ve now seen how hard it was for us too, took a good 18 months and many hoops to jump through. I think there’s not much difference between UK and the USA in terms of hoops.
What did I do? Ready?
Nothing!
I think I am what is termed as a freeloader or something. Means I only got in because of my younger, more qualified spouse. Well, I did have to do a couple of things that were quite difficult.
1) Prove I had no criminal records and 2) Cough while the doctor cradle my unmentionable pair.
All very stressful but worth the effort. As you said earlier, I am a lucky pomme b*****d.