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:

  • The Coupon Mom
  • The Grocery Game
  • Hot Coupon World (particularly good for CVS Drugstore deals)
  • dealideal.com
• 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.