Why You Pay More at the Grocery Store (and How to Stop)

by Tara Struyk on 20 February 2013 9 comments
Photo: Jaro Larnos

Many of us don't think too much about what we throw into our grocery carts — or how much it all costs. After all, we have to eat! But for most Americans, food makes up one of the largest expenses in the budget, right after paying for housing and transportation. If you can trim just $20 off your weekly grocery bill, it can save you $1,000 per year; saving $60 per week could put more than $3,000 extra in your pocket.

Believe it or not, those kinds of savings aren't unrealistic, and you don't have to starve to death to achieve them. All you have to do is look at where grocery stores make their money and where you may have some bad shopping habits. (See also: How to Grocery Shop for Five on $100 a Week)

What You Pay More For

It isn't hard to guess which items in the grocery store have the highest mark-ups; after all, you won't see a fancy display around cabbages or low-fat milk. In fact, the highest margin — and therefore lowest value — items will fall into one or more of the following categories.

Convenience

The closer a food is to being ready to put on the table, the more it'll cost you. That's why things like pre-cut fruits and vegetables and breakfast cereals have significant mark-ups. The same goes for most packaged convenience foods and pre-made meals. For many of us, throwing a few convenience items in the cart is a matter of necessity — or sanity. Just be aware that the less preparation you do at home, the more you'll pay at the store.

Brand Names

It wasn't long ago that store-branded foods were pretty terrible imitations of brand name favorites. Nowadays, however, most stores offer a great range of high quality products under their own labels and, in many cases, they're much cheaper than the mega brands you'll see advertised on TV.

Brand name items are marked up dramatically. You might have to do a little experimenting, but for the most part, brand name foods don't cost more because they're better — they're just better known. Do you really want to pay for your canned soup's star power?

Organics

There's still a lot of debate about whether organic produce provides a health benefit over conventionally grown fruits and veggies, but one thing you can't argue with is that organic comes at a price.

Organic foods tend to cost 30 to 50% more than regular produce, largely because organic producers are smaller, have smaller markets, and don't receive the same subsidies as other growers.

If you're concerned about pesticides, pay more where it counts by choosing organic items that tend to be highly contaminated when grown conventionally. According to the Environmental Working Group's 2012 "Shoppers' Guide to Pesticides," these items include apples, celery, bell peppers, peaches, strawberries, and grapes. Items such as onions, corn, pineapple, and avocados, on the other hand, are relatively uncontaminated, so buying organic here may provide limited benefit. To save even more, check out organic produce at a local farmers market, or grow your own in the back yard.

Habits That Can Cost You

Avoiding the most costly items in the grocery store is essential, but if you really want to nail frugal grocery shopping, you have to steer clear of costly habits as well.

Lack of Flexibility

One of the best ways to save money on groceries is to be a little flexible about what you buy each week. Having a meal plan is great, but you also have to be creative and willing to roll with the sales and promotions at your local grocery store.

Rather than dutifully scooping the same old meats, fruits, and veggies into your cart every week, use the sales to determine what you buy. Choose items that are on special and work them into a flexible meal plan. This kind of shopping has gotten even easier with websites like PunchFork.com, which allows you to enter an ingredient or two and find tons of illustrated recipes that'll fit the bill.

Lack of Research

Doing a little research in local flyers before hitting the shops can be a great way to shave a few dollars off your food bills. Chances are there are a few grocery stores in your area, so you can often decide which one to visit based on what you need.

When I want to stock up on canned tomatoes, pasta, and dried beans, I often head to my local Italian market, where there's a broad selection of these items at a lower price than at other stores. When I want to stock up on rice and noodles, I visit the Asian market. If you know which stores have the best prices on certain items, you can visit them intermittently to stock up, and decide where to shop that week based on what you need the most.

Lack of Math Skills

Grocery stores couldn't possibly make comparing prices more confusing.

Fortunately, most of us now carry a pocket calculator in the form of a smartphone with us wherever we go. This makes calculating unit prices much faster, and, unless you're a math whiz, probably more accurately, too. There are even a few apps that'll do all the work for you, such as Unit Price Compare for Android or the CompareMe Shopping Utility for iPhone.

Time: One More Thing Worth Saving

Once while browsing canned tomatoes, an old woman sidled up beside me.

"You can't buy those," she hissed, before telling me the same tomatoes were 25 cents cheaper at a store across town.

I bought the tomatoes. I'm all for saving money, but we all have to decide when the savings just aren't worth the price of our time.

Perfecting your grocery shopping strategy doesn't have to mean avoiding all the snacks you love or spending all weekend clipping coupons. In fact, how far you go is entirely up to you. After all, being frugal is about more than just saving money, it's about living well on less. And that, in my opinion, is all about balance.

How are you saving money at the grocery store?

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Guest's picture
Guest

I think you mean $20/week, not month. (First paragraph.)

Meg Favreau's picture

Thanks for the catch! We've fixed it.

Guest's picture

The tactics that grocery stores use to make you buy more is actually pretty crazy and in depth. Everything from smaller baskets and bigger carts, to the bakery section being at the front, to forcing you through the right entrance so you grab things with your right hand. The best tip here is flexibility; if you go to the store and buy items that are on sale rather than ones that fit into the meal plans for the week, you will save a lot of money.

Guest's picture
Guest

Surprised you didn't mention shopping at places that don't typically sell major name brand goods such as Aldi, Save-A-Lot, and Trader Joe's. I switched in 2012 and my grocery bills went down almost 40% vs. 2011!

Tara Struyk's picture

Great point. I do think that avoiding brand-name products as much as possible saves a lot, but I forgot to mention stores that specialize in that. I shopped at Aldi in college (I no longer have one nearby) and the price of things like cereal there is amazing!

Guest's picture
PutItInABlender

To save money at the grocery store you need to evaluate just what exactly it is that you eat and why you eat it:
(is it the convenience of bring the frozen cardboard box to work and nuke it?
is it because the food will keep outside of a fridge from the morning until lunch time?
is it because you don't have time to cook during the week?
is it because you're easily bored of the same foods?)

Armed with that information you can then review your grocery receipts and enter them into excel in two columns, item name, item price, then sort the columns by item price to give you an idea of what is costing you the most money.

Once you know what you eat, why you eat it and how much it costs you to continue to eat it, you can then look at recipes and price out how much the ingredients cost to see at what price point does it make more sense for you to just buy the item vs. make it yourself in a batch, on the weekend, and freeze it for later.

I basically cook all the main dishes for the week every Sunday in huge batches and freeze them. The only cooking I do during the week is to reheat a previously frozen main dish or to make a side dish or to grill something outside, so 20minutes max.

The benefits of this technique are:

You learn to cook.

You know exactly what is going into your food.

You have the convenience of a frozen cardboard box lunch but you have control of the nutritional and salt content.

You will pay the lowest possible cost for your food.

You will begin to find multiple recipes that use similar ingredients so that you can buy in bulk yet still have variety.

Tara Struyk's picture

Thanks for the comment. I know a few people who use the batch cooking strategy. For those who overspend because they're pressed for time during the week, it can be a great solution.

Guest's picture
Guest

What I have found is that there is one product (corned beef hash) that I pay more for the big brand, and it is only because the store brand does not taste as appealing, but the house brand of most of the processed foods are suitable substitutes.

In fact, at regular price, you usually pay less for the house brand than brand names on sale, and sale prices are ridiculously low on the house brands, that you would have to be insane to pass up the savings.

Tara Struyk's picture

Sometimes there is a difference. I guess you've got to give the big brands some credit for the R&D and testing that goes into their products. But if I can't taste the difference, I don't pay for it.