Shoestring Gourmet Part 2: “Playing the Grocery Game for Keeps”
Hunting grocery deals sounds about as sexy as taxes and laundry; however, purchasing food frugally needn’t just be just for frumpy housewives. I approach it as a game of skill and luck, always played for money. Play well, and you can afford those delicious, locally-raised tomatoes on a rice-and-beans budget! Most people are familiar with the basics: buy store-brand, get bulk discounts, shop stores with better bargains. But, how much of a difference do these strategies make?
To test these strategies, I decided to up my game by building a price book. I hit the road and gathered prices for staple goods at four local supermarkets. Each price book entry included the full facts: store, date, item, brand, quantity, and price. As a proper geek, I organized this into a database for analysis. Let’s find out how common sense advice stacks up.
Buying Store Brand:
Store-brand stuff was almost always cheaper than name brand, by about 26% on average, but sometimes as much as 50%. In many cases, the quality is indistinguishable from name-brand products. The only exceptions to this rule are when a store reduces prices on popular items to bring in customers, often taking a loss on the item in order to make profits on other things. These steeply-discounted items are known as loss-leaders, and coupon users often will stack coupons on top for additional savings. Other than loss leaders and applying coupons to sample-sized packages, “always buy the store brand” saves a bundle (unless you’re buying a lot of bacon, where store brand is more expensive).
Go big or go home, right? Well, not quite. Below we see the unit price of paper towels, versus the package size. As you can see, buying in bulk saves money on average, but pricing varies quite a bit. Stores are quite clever about pricing their packages; the tiniest sizes often carry a hefty “convenience penalty” of 30% or more, as we see above. The largest packages are in roughly the same price range as the mid-sized ones. While I use paper towels as an example because there are more package sizes available, I have observed that these principles hold true for other goods too. Grab that tiny package of flour or sugar if you must, but remember: you’re paying for the privilege of getting only what you’ll use right now!
Those enticing bulk buys at the warehouse stores come with the two hidden challenges, which make it important to use good judgement.
- Spoilage: if weevils get into a 50 pound sack of flour, you’ll lose a lot more money than with a 5 pound one, and this negates any bulk-buy savings pretty quickly.
- Storage: when buying in bulk, I try not to buy more than a 3-6 month supply of anything. Nobody wants to move house with 1000 trashbags and a roomful of toilet paper.
Despite this, bulk buys can still save you a lot of money if used right. I bought a 25 pound bag of flour dirt-cheap at a warehouse store, and thought it would never run out. Remember the apocryphal quote about how computers would only need 640k of memory? I was just as wrong. But what about 700 Ziploc bags? I’ve still got about 400 left from that deal. A price book can help you decide if you’re really saving enough money to justify buying enough supplies to provision a small army.
|Minimum Unit Price By Store ($/lbs unless otherwise noted)|
|Item Name||Aldi||Kroger||Food Lion||Harris Teeter|
|Eggs (lrg egg)||$0.124||$0.148||$0.258*||$0.177|
|Flour, All Purpose||$0.358||$0.398||$0.462||$0.538|
|Heavy Cream (qt)||$3.780||$4.690||$5.980||$6.580|
|Olive Oil, Extra Virgin (L)||$6.980||$6.663||$8.193||$7.047|
|Potatoes, Yukon Gold||$0.578||$0.918||$0.598||$0.998|
|Romaine Hearts (count)||$0.663||$0.997||$0.927||$1.330|
*Limited buying options, had to use name brand or more expensive version than normal.
Green denotes lowest price in category, orange is highest price.
As you can see from the graph and chart, although some stores tend to be cheaper overall, each store has some items that it sells at the lowest price. For example, although Harris Teeter is generally more expensive overall, it has the cheapest bacon. In some stores, goods are sold in small packages. These smaller quantities seem more economical, but often mask higher unit prices. This practice is quite common at low-end stores making one wonder if the stores are trying to prey on the financial misunderstandings of their customers. Further, I found that shopping at Aldi rather than Harris Teeter saves an average of 25%, assuming you pick the best value package at each store.
With the data above, we don’t get a set of hard and fast rules, but some useful strategies definitely emerge. Buy store-brand unless you have good coupons, and try to avoid the smallest package sizes. Each of these will save about 20-30% overall. If you set aside a little grocery budget every week, and know typical prices, then you can take advantage of sales and bulk discounts on nonperishable items. By comparison shopping and rotating which stores you visit, you can save a lot on expensive luxury items for fancier meals. Combining these strategies is enough to cut grocery costs roughly in half, and that’s how you beat the house and win the grocery game.