The increased cost of grain will compound a marked shopping trend of consumers switching to cheaper products and larger supermarkets, grocery merchants say.
New grain contracts announced this week will mean higher prices for bread, bakery goods, chicken, eggs and pork next year, with predictions bread prices could rise 10c a loaf and retail pork prices by $2-$3 a kg.
Foodstuffs South Island chief executive Steve Anderson said the co-operative chain, which owns Pak'n Save, New World and Four Square, had seen a sudden and huge change in shopping behaviour about three months ago.
"It's like people's thought patterns had changed overnight, from being consumers to conservers."
Increases in grain prices would compound that because they would have to be passed on to the customer.
"We are a high-volume, low-margin business. We can't absorb the increased costs."
The present trend was towards Pak'n Save outlets for cheaper prices, buying home brands and shopping at rural Four Squares or New Worlds instead of using the petrol to drive in to the city, he said.
"I personally haven't seen such a radical change in all the years I've been involved in the consumer industry.
"People are thinking about the cost of things, petrol, mortgages etc, more. They are living within their means more."
Another indication of the change in attitude was a dramatic drop in sales of discretionary items.
"I can tell you one item, which I won't name, that had double-digit growth and in February sales suddenly dropped 5%."
Grocery shopping trends were a barometer for the economy, he said.
Budget ranges such as Pams and Budget were selling well, an indication of tighter times, he said.
Progressive Enterprises spokeswoman Fiona Breen said Progressive's supermarkets, which include Woolworths and Countdown, had also experienced strong growth in their in-house label, Homebrand.
Petrol prices had changed shoppers' habits and many people did not want to drive so far, she said.
"Convenience of location is a big factor."
The company had not seen a big shift from Woolworths to Countdown, perhaps because prices at the stores were similar.
Matt Briggs, of the Middlemarch Store, said he had not noticed any difference in business since petrol prices began to soar.
"I certainly thought it might make an impact on us, but it's not been visible yet."
Lynda Galt, of the Ranfurly Four Square, said the store had a "fairly solid" customer base, but she had noticed an increase in sales lately, although it was not huge.
People in Ranfurly tended to shop in Alexandra if they were going there for weekend sport, or had arranged a car pool, which had been happening for years.
