I have become the loss leader queen!
Let me explain. Since retiring, I have taken over the chore of grocery shopping from my still-working spouse. The first thing I did upon taking this chore back was to resurrect my old pre-employment habit of planning out seven days worth of meals at a time to minimize trips to the grocery market, saving on both gas and impulse purchases (It's a proven fact - every trip to the market resulted in mysterious items like cake and ice cream somehow ending up in my basket!). I then dutifully made up a shopping list of the items I needed to buy and headed out to my local chain supermarket. My first foray out was pretty eye opening. I easily located everything on my list, but I also ended up way over budget.
Since I didn't want to increase our annual Grocery allocations at the expense of another category like Dining Out, Entertainment or heaven forbid, my beloved Travel, I went home and tried to figure out what I was doing wrong. Coincidentally, as I was doing this I happened to hear Dave Ramsey, a personal money-management expert and extremely popular national radio personality, tell one of his radio callers that most people spent less in their first year of retirement than they had anticipated, with one notable exception . . . they spent considerably more than on groceries.
Here are some of the mistakes I identified, and what I did to change things around -
- We were purchasing way to many convenience items, and paying the corresponding higher cost. Out went pre-packaged chicken broth, ready made pudding cups, mini cans of V-8, individually purchased breakfast bars, frozen entrees and name brand products. In came bouillon cubes, make at home instant pudding, refillable juice containers, granola bars packaged 6 to a box, deli meats, and no name products.
- I noticed for the first time (I know, no excuse - I plead workplace exhaustion) that every Tuesday in my mailbox I received sales ads for all of the grocery stores in my area. I began reviewing the ads diligently to see what was on sale before making up my menu and shopping list for the week. I began to visit a number of grocery stores each week, rather than just one, in order to purchase the majority of my weekly grocery items on sale. Many sale items, particularly those that are deeply discounted and therefore generate little if any profit, are known as loss leaders in the retail industry. The loss leader business practice is based on the theory that the appealing sales price of the advertised item will bring customers into the store, who once there they will likely purchase far more than just the loss leader items, thus increasing overall revenue for the store. Clearly this theory holds true in the grocery industry more often than not, since grocery stores continue to do it. And that is great news for people like me that can resist retail temptation and stick to their lists.
- I began price comparing non-sale items between each grocery store and noticed that Target had the lowest price by far on name brand items, generally at least 50% lower. With regard to non name-brand items, Trader Joes was the consistent price winner, particularly in the grains category. And with regard to produce - Sprouts came in with the best pricing, compounded by a hugh percentage of their produce department being on sale each week.
- I double dipped - that is, I planned meals with an eye toward using the leftovers in other meals. Homemade marinara sauce topped spagetti noodles one night, and became the base for lasagna later in the week.
- I began stockpiling items as they went on sale, using a six month consumption estimate to determine how much to buy. I thought six months made sense with regard to both freshness and our taste buds (they do change over time . . . remember Cheez Whiz?). I also immediately divided and froze perishable meat products bought in bulk into smaller packages that allowed me to defrost and use small quantities at a time.
- Any extra grocery money went to buying sales items that were not on my menu for the week, but that were too good to pass up. At the end of the day, a good deal is a good deal, and I simply work the items into my menu over the next couple of weeks.
Multiply that by 21 meals and you can see how the savings just go on and on. And although I do spend an additional hour or so each week perusing sale ads and making up my weekly menu and shopping list, I thoroughly enjoy the challenge of trying to beat the system.
The results of these small, simple changes have been pretty amazing - not only have I completely stopped overspending, I've actually been able to cut my grocery budget by $20 a week, an impressive $1,020 in annual savings, while still keeping my fridge, freezer and pantry all fully stocked. Which brings me back to where I started . . . would someone please pass me my crown?