Picking up Nickels

Friday, August 18, 2006

Strategy: How to Save Money on Groceries

As I mentioned in an earlier blog entry (Where Does Your Money Go?), I made some changes to my grocery shopping habits in an effort to reduce expenses. My strategy of buying whatever I wanted with little regard for prices obviously wasn't getting the job done.

After a bit of research, common sense, and trial and error, I came up with a grocery shopping strategy that has worked well for me (resulting in a 28% decrease in grocery spending in the first year). The premise is simple:

Determine your "buy price" for items that you buy on a regular basis and stockpile them when they can be bought at or below that price.

Here are my grocery shopping rules:

    • Know your prices

      The first step is to educate yourself about prices. If you buy the 31 load box of Tide detergent every month, make sure you know the everyday price for Tide at your local Safeway, Walmart, Walgreens, etc. Now, remember the time you got a really good deal on that box of Tide? That is your buy price. The store makes their money when you buy Tide at the everyday price, but you should wait to buy Tide until you can get it for your price.

      It will take some time to get up to speed on prices. Try keeping a price book until you can identify a good price on demand. After you've been doing this a while, you will have your own set of buy prices like paper towels rolls for 50 cents, canned tomatoes for 16 cents, a box mac & cheese for 33 cents, etc.

    • Shop at the right stores

      Did you know that a grocery chain may have different prices for the same item at different stores? I had always bought groceries at the nearest supermarket (6 miles from home). That particular store had no local competition, so there was little incentive for them to have lower prices. One time I happened to be shopping at a different store in that chain (11 miles from home) and was surprised to see that the everyday prices for many of the items that I bought on a regular basis (milk, bread, steak, produce, chips) were lower than what I had been paying at the store closest to home.

      What was the difference? COMPETITION! The store with the lower prices had a competing grocery chain a few hundred yards away. However, things got even better for consumers when a Super Walmart opened down the street. Traditional grocery stores are terrified of Walmart! Once Walmart came to town, the flood of price cuts, coupons, promotions, and generous sales really started to take off.

      I have shopped at these two grocery stores for three years now and take advantage of the deals that each offer every week. I also pick up items at CVS or Walgreens when they have a good deal (which can be often) and even spend some money at Walmart every few weeks.

    • Stockpile items when the price is right

      We've established that you should buy in quantity when you find an item at your buy price. This is called stockpiling. The beauty of a stockpile is that when you have a bunch of paper towels that cost you 50 cents per roll, you have a supply to last you until you can buy more at 50 cents per roll. The less informed shoppers can continue pay the regular price of one dollar per roll.

      When building your stockpile, consider that some types of products usually go on sale at certain times of the year. For example, things like soda, ketchup, hot dogs, and chips are on sale quite often during the warmer months when everyone is cooking on the barbeque. Similarly, things like baking ingredients, canned goods, and spaghetti sauce are on sale during the Fall and Winter. Also, don't be alarmed if you grocery spending temporarily increases when you start building your stockpile. Once your stockpile is built, you will see your spending decrease since you've started shopping smarter.

      It is also important to keep in mind that you will need to store all this stuff somewhere. Basically, don't buy 50 multi packs of toilet paper if you have no where to put it. I keep my stockpile in the basement: a stand up freezer and a shelving unit from Home Depot have done the trick for me.

    • Identify good deals in the sales circular before shopping

      You need to spend a little time doing your homework before you head out to the store. Look for items that you can buy at your buy price taking into account sales, coupons, and promotions. For a little help, here are a few web sites that can help you identify deals at your local stores:

    • Load up on coupons

      The best deals can be had when you combine a good sale with coupons. Knowing that, I try to get my hands on as many coupons as I can and I keep them until they expire. An important thing to keep in mind when accumulating coupons is to stay organized!. I have seen other couponers who organize their coupons in a large accordion-style folder, but I find it easier to keep the ones that I will use sorted by category in a small coupon wallet. Do whatever works for you.

      There are many ways to obtain coupons locally, although buying the Sunday newspaper for the SmartSource, Valassis, and Proctor & Gamble coupon inserts is the most obvious option. Another good source for coupons is to get the ones that others have discarded in recycling bins. In fact, I have had some of my best finds in the recycling bin at my local Post Office.

      Does your store offer self-checkout? Check them for Catalina coupons (printed out at the register when you buy certain items) that other shoppers have left behind.

      Coupons can also be found in many other places like from friends and family, grocery circulars, magazines, library or foodshare coupon exchange bins, on item packaging, and from in-store blinkies (coupons found in a dispenser with a blinking light).

      Coupons can also be obtained online. There are several web sites out there that give you a preview of coupons that will be in the next Sunday paper, as well as provide an archive of coupons from previous weeks that you can refer to when trying to match coupons to deals in your local store's sales circular. My favorite coupon preview site is the Taylortown Coupon Preview. Please note that since the coupon inserts do vary by region, you may not get all of the coupons listed at this site in your local Sunday paper. However, this site (and many others) do allow you to order multiples of any coupons that you may be interested as long as supplies last.

      Ebay is another great resource for obtaining coupon multiples. If you're looking to stock up on Tide detergent, you can easily see what's available by searching ebay for "Tide coupon". If someone is having an auction for some coupons that you want for a fair price (including shipping), be sure to bid on them before someone else does!

      There are also many regional coupon and deal sharing web sites out there. I get my local coupon fix from the Yahoo group New England Couponing. It's a group of really nice folks who share information on coupons and grocery deals throughout New England. Sign up and I guarantee that some veteran couponers will be able to teach you a thing or two about saving money.

    • The rest
      • Shop at stores that offer double coupons.
      • Never go shopping without a list.
      • Shop by price, not by brand.
      • Get a rain check when a sale item is out of stock.
      • Don't forget to take advantage of deals at drug store chains (Walgreens, CVS, etc).
      • Take advantage of mail in rebates.
      • Ask if a store accepts competitor's coupons.

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6 Comments:

  • or shop at superwalmart and avoid all this fussing...

    for example oscar meyers weiners.. on sale at pricechopper 2 for $4 regular price at superwalmart $1.50 each...

    no need to stockpile.. no need to couponhunt...

    By Anonymous Anonymous, at 8/22/06, 8:35 AM  

  • All the fussing is to save $2k per year on grocery spending. Why pay regular price if you don't have to?

    As for hot dogs, Ballpark hot dogs are buy 1 get 1 free at Stop & Shop every few weeks. I bought 4 packages of them a few weeks ago. Regular price is $3.99 per package. Two packages were free, and I used four 75 cent coupons that were doubled to $1.50 each.

    Net cost was $1.98 for four packages of hot dogs. I think we still have two packages left in the basement freezer.

    By Blogger Frugal Frugalson, at 8/22/06, 8:47 AM  

  • Your plan is great, but may prove frustrating for readers in my situation. For a few months, I tried to follow a plan similar to this one. The problems that I encountered can be boiled down to one point: I live in a relatively small town. Therefore, a lack of grocery store competition resulted in only Kroger offering a limited double coupon policy. My local newspaper carries the Vlassis and SmartSource coupon supplements, but they often didn't include the really good coupons I would read about on sites like The Grocery Game.

    Eventually I gave up, and started shopping almost exclusively at Aldi. One generally only has their store brands to choose from. Luckily their store brands are EXCELLENT! Best frozen pizza ever, for example. And most importantly, their prices are the best in my town.

    The aforementioned Tombstone-style pizza? $1.99. A gallon of 2% milk is $2.19. Last night I picked up a 6-pack of English Muffins for $.25!!

    So, if one has to have the brand name stuff and you live in the right area, I think your plan is excellent. But for me, low prices and good quality (and no coupon hassles) bring me back to Aldi.

    By Anonymous Scott Steele, at 8/22/06, 11:44 AM  

  • scott,

    You are fortunate to have an Aldi's to fall back on! They have a great reputation for selling quality products at a good price.

    As far as getting coupons, sometimes I buy or trade for multiples of really good coupons that aren't available in my area (you can get them at Taylortown or Kachinaweb, for example). I usually pay less than 10% of the coupon value, which is a pretty good deal.

    By Blogger Frugal Frugalson, at 8/22/06, 2:20 PM  

  • Hello

    I am quoting you here

    "As for hot dogs, Ballpark hot dogs are buy 1 get 1 free at Stop & Shop every few weeks. I bought 4 packages of them a few weeks ago. Regular price is $3.99 per package. Two packages were free, and I used four 75 cent coupons that were doubled to $1.50 each.

    Net cost was $1.98 for four packages of hot dogs. "


    Your plan sounds great BUT I am not sure why they let you use 4 75 cent coupons. A lot of times cant you use just one coupon? Or if its buy one get one free does the coupon still apply? A lot of places I thought (And I guess I am wrong) only let you have one offer or one coupon. Can you please explain how this worked?


    Thanks

    By Blogger Chris, at 12/5/08, 9:53 PM  

  • Chris,

    I've never encountered a situation where I wasn't allowed to use two coupons in conjunction with a buy 1 get 1 (B1G1) free sale. I've even combined a B1G1 coupon with a B1G1 sale to get both items for free.

    It doesn't sound intuitive to use a coupon for an item that you are technically getting for free, but it is something that I do quite often.

    By Blogger Frugal Frugalson, at 12/6/08, 4:44 PM  

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