I think we can all agree that groceries are a necessity. There aren't too many people in the US who grow enough of their own food to avoid at least a weekly trip to the grocery store. So, food is a necessity and we obtain it by purchasing it from the store.
Food, in the form of groceries, also constitutes a large portion of the family budget; whether you are rich or poor, you have to eat. So we have two established facts: we have to buy groceries at a store and we are committed to paying a good sum of money for those groceries.
Now comes the strategy for making the most of this situation. Harford puts into words some of the intricacies of the "grocery game" that I have been playing for years. Location, sale pricing, shopping cheaply and careful comparison are the hallmarks of the grocery game -- and any parent on a tight budget knows that this game can pay off big in the end!
Let's talk location -- like Harford discusses at the beginning of the book, location can play a big part in drawing in those who want the convenience of a store close to work, close to home or on the way to school. The store may pay a premium for this location, so be open to shopping at stores that are not as convenient. Grocery stores also have another game they like to play with regards to location -- while they may pay a similar cost per square foot for the grocery store located at Circle and Galley and the grocery story located next to Broadmoor Towne Center, they don't charge the same for the items sold. This location game they play happens all over the country -- grocery stores charge more for everyday staples in higher per capita neighborhoods than in lower per capita neighborhoods. Sometimes a few miles can make a big difference in the cost.
Does anyone disagree that when we are in a hurry, we spend more money on groceries? Harford points this out: "An expensive shopping trip is the result of carelessly choosing products with a high mark-up". Shopping cheaply involves using a list (and sticking to it) and paying close attention to the items you are purchasing. Don't grab the first jar of peanut butter you see or the can of soup that is directly in your line of vision -- look at the price, and choose accordingly. His suggestion of comparison shopping also comes into play here -- you are in a contest with the grocery store for your money. You want as much as possible for your pennies and they want to give you as little as possible for your dollars. Look high and low for items; stores like to make the cheaper stuff hard to find! Bulk garlic is usually cheap -- but I can't tell you have long I have to spend to find it. I can find jars of minced garlic, boxes of organic garlic but I swear the cheap, bulk garlic gets moved every week to a different part of the produce section!
Sale pricing -- this strategy can pay off in big savings when filling that grocery cart! You just have to change your attitude about the costs of food staples. Harford hit the nail on the head when he said "...it is just as accurate, and more illuminating, to turn the "sale" on its head and view prices as premiums on the sale price rather than discounts on the regular price."
By shopping with this attitude, you can select items that offer a fair value to you. When spaghetti is normally sale priced for $1.00/pound and you see it for $1.89/pound, it doesn't make sense to purchase any more than you absolutely have to have that day. This particular strategy works best if you have an excellent memory for prices or you have the organizational skills to keep a price book. Frugal grocery shoppers know the trick of the price book -- a listing of items your family regularly purchases along with the least expensive price paid for the item in the last six months. When shopping, consult your price book; if the item is close to the "low price listing", buy as much as you want -- if it is high, consider other options.
The price book strategy also helps to even out the problem of "inside knowledge" that Harford refers to. Grocery stores know that you are going to purchase meat, dairy, frozen foods, snack foods, etc. They spend a great deal of money tracking consumer spending habits in order to increase profits. You, on the other-hand, don't know if the prices that the grocery store is selling those items for is high, low or somewhere in between. Even advertised items can be high -- 10 for $10 is no bargain if the item usually sells for 89 cents. By keeping a price book, you have the inside knowledge to know whether the price is good. You may be surprised to learn that most "loss-leader" sales happen on a rotating six week schedule. If your family likes spaghetti, you want to buy it once every six weeks at the lowest cost. The same goes for Hot Pockets, ground hamburger and shredded cheese. Buy them during the low cost cycle and save your pennies for something else.
The biggest hurdle to the grocery game is time -- when we have the time to shop, to make a list, to keep a price book -- we can win the game. Those of us working full-time, going to school and raising a family frequently lose the game because we don't have the time to play (and that is just what the stores are counting on).