More Canadians using ‘pay later’ option as grocery prices rise, app says

FILE: A woman checks prices at the grocery store with her calculator on Wednesday, March 27, 2024. (Christinne Muschi/The Canadian Press)

A growing number of Canadians are using repayment plans as their grocery bills rise, according to a new report from a financial services app.

KOHO’s Grocery Gap Report found the monthly amount users are spending on groceries surged from $261 to $275 between May 2025 and May 2026, an increase of roughly five per cent.

Meanwhile, the adoption rate of KOHO’s “pay later” monthly repayment plan more than doubled — from 0.8 per cent of users to 1.7 per cent.

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The company also found trips to “discount” grocery chains such as No Frills increased over the same period.

“The findings make it clear that grocery costs are rising faster than Canadians can adapt,” said Faye Lucas, KOHO’s head of consumer trust, in a statement.

“People are changing where they shop, how often they go, and how often they pay and yet the spending keeps climbing.”

Statistics Canada reported the country’s inflation rate climbed to 3.2 per cent in May — the fastest pace observed in nearly two years — with grocery prices up 4.3 per cent year over year.

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It marked the 16^th month in a row that the cost of food has risen faster than overall inflation.

The federal government has tried to provide some relief to families through the quarterly Canada Groceries and Essentials Benefit, which began arriving in the bank accounts of some 12 million eligible residents last week.

KOHO’s report was based on internal data collected between May 1, 2025 and May 31, 2026, including “grocery transactions, shopping patterns, financial product adoption and generational spending trends” of more than 173,000 users across the country, according to the company.