Nikko Food Prices

We'll be spending two days in Nikko around the time of the 1000 Samurai Festival in May (completely by accident, actually; I didn't know the festival was taking place until the innkeeper told us while confirming reservations!) We're real misers with money, so we opted for just the room at a minshuku without the 525/person charge for breakfast, thinking we could get it for less by picking up some essentials at a supermarket. Now that I'm reading up about Nikko, I see people saying that food is very expensive in that area and I'm not sure we made the right choice. Would it be possible to get breakfast for less, or too much of a hassle?

You can get a breakfast at a convenience store for about the same or maybe a little bit less. Whether a convenience store is located near your accommodation is a different question, though. If I were you, I would contact your minshuku and order the breakfast, after all.

Apart from convenience stores, there are probably almost no other places in Nikko that serve breakfast.