Supermarkets are facing increasing competition from Costcos, Wal-Mart Supercenters and other outlets. It seems that everyone is selling groceries these days. But what’s the most cost-effective way for you to knock out your shopping list? Food editor Phil Lempert was invited to appear on “Today” to share some insight on how to get the most for your money. Here are his tips:
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Everyone loves to save money, and since the average American goes grocery shopping twice a week, there’s no better place to start looking for those extra dollars.
You probably know you should have a list prepared before you head to the store (those shoppers save an estimated 25 percent on their shopping bill by eliminating impulse purchases), and you should bring those coupons (which now have an average face value of more than 75 cents) — but what you may not know is that where you shop may also make a difference.
Today every retailer seems to be selling groceries, and why not? We buy foodstuffs more often than any other category of goods, which increases the likelihood of us visiting a particular store more often. And when we are there, if merchandising is doing its job, we will buy more items than we planned to, which leads to extra profits for the store. As a result, there is a battle going on between warehouse clubs, supercenters, drug chains and our traditional supermarkets to entice us to make our purchases at their stores.
Working with ACNielsen’s HomeScan Panel, we took the top 50 grocery products and compared the average prices paid by these real shoppers over the past 12 months across five different kinds of stores. The prices were calculated based on the UPC code — so we are comparing the exact same brand name and package size (even for club stores) to get total-sale pricing, including the use of coupons and frequent-shopper cards.
So who has the cheapest groceries?
Supermarket shopping basket, $82.57
Mass merchandisers (e.g., Wal-Mart, Kmart, Target), $78.45
Supercenters (e.g., SuperKmart, Wal-Mart Supercenter), $78.05
Drug chains, $78.05
Club stores* (e.g., Sam’s Club, Costco, BJ’s), $83.90
*Price for club stores based on 48 items; two items were not available. If these items were available and we used the supermarket pricing, club total would be $87.66, and total basket would cost 5.81 percent more than average in the supermarket.
So where should you buy your groceries?
Best bet, depending on how convenient the store is to your home, would be the supercenter or drug chains. But remember, by using coupons and frequent-shopper cards you can easily make up that extra 5 percent and more at a supermarket, which usually is more convenient and has a broader selection of products. It’s also important to point out that often our shopping list includes more than just the top 50 products (let’s remember that according to the Food Marketing Institute, the average supermarket today stocks over 32,000 different products) so it’s important to check out those weekly circulars and compare prices between supermarkets.
Another great way to save money is to buy the store’s own brand.
According to the Private Label Manufacturers Association, one in five products purchased in grocery outlets is a “store brand” product. Store-brand sales now exceed $40 billion each year. According to Michael Sansolo, senior vice president of the Food Marketing Institute, shoppers today want value, and as a result supermarkets are working hard to improve the taste, consistency and packaging of their own brands. When asked why store brands costs less, Sansolo tells us that “innovation comes from the brands. Supermarkets can then offer a similar product with less money spent on advertising and packaging, which is then passed on to the shopper.”
The truth is that even with all the marketing efforts utilized in maintaining a brand’s positioning, many of us make our decision when we are in the store, and which product we purchase is often based on how the product is displayed and presented. At times, a retailer may leverage the display or ad of a nationally known brand to create sales for the store brand — placing a store’s own brand adjacent to the brand most heavily advertised is just one example of this strategy.
But it all comes down to “We gotta eat this stuff”… so what does it taste like?
We gathered store brands from ShopRite, Whole Foods, Wegmans, Wal-Mart and Albertsons and did our own taste test. In every case the foods were at least as good as the name brands, and in some cases the savings were almost 50 percent.
Store brands have come a long way. Once thought of as a cheaper alternative with less quality, many of the store brands we tested actually exceeded the comparable national brand in areas in addition to cost. Pricing and product attributes have been supplied by the retailer (except where noted) and verified by ingredient or other package declarations in this comparison.
Here’s a sampling of the products we tested.
ShopRite Extra Virgin Olive Oil, 1 liter for $5.99
Compare to: Bertolli Extra Virgin Olive Oil, 1 liter for $8.99
ShopRite Cheddar Cheese Sharp, 10 ounces for $2.99
Compare to: Kraft Cracker Barrel Sharp Cheddar Cheese, 10 ounces for $3.99
ShopRite Fruit on the Bottom Yogurt, strawberry, 8 ounces 2/$.99
Compare to: Dannon Fruit on the Bottom Yogurt, strawberry, 8 ounces for $.79
WHOLE FOODS MARKET
365 Organic Blue Cheese Fresh Dressing, 12 ounces for $2.99
Compare to: Marie's Blue Cheese Dressing, 11.5 ounces for $3.49 to $3.99
365 Tuna in Fresh Spring Water, 6 ounces for $.99
Compare to: StarKist Tuna in Water, 6 ounces for $1.29 to $1.39
365 Pasta Sauce, 10 ounces for $1.99
Compare to: Prego Pasta Sauce, 10 ounces for $2.29 to $2.49
Wegmans Santa Fe Salsa, 16 ounces for $1.50 (2/$3.00)
Compare to: Ortega Santa Fe Salsa, 16 ounces for $2.29
Wegmans Vodka Blush Sauce, 16.5 ounces for $2.39
Compare to: Flora Vodka Blush Sauce, 24 ounces for $5.69
Wegmans Blueberry Fruitful Morning, 13.5 ounces for $2.50 (2/$5)
Compare to: Post Blueberry Morning, 13.5 ounces for $3.29
Albertsons Essensia Pizza, $3.85
Compare to: DiGiorno, $5.12
Albertsons Pancake Syrup, 24 ounces for $2.49
Compare to: Aunt Jemima, 24 ounces for $3.82
Albertsons Rocky Road Ice Cream, $4.54
Compare to: Edy’s/Dreyer’s Rocky Road, $5.83
WAL-MART (Wal-Mart’s corporate office would not disclose the name or pricing of the “comparable brand”)
Great Value Creamy Peanut Butter, 40 ounces for $3.05
Great Value Pancake & Waffle Syrup, 24 ounces for $1.29
Equate Weight Loss Shake, $3.97
Two more things to remember about store brands. First, be sure to check out the ingredients listing carefully; if the ingredients (and the nutritional information) are identical, there is a good chance the store has copied the same formula and the product will be identical. Secondly, every store brand these days has a 100 percent satisfaction guarantee. If you don’t like the product, bring it back for a refund.
Saving money on groceries can be easier than you think!
Phil Lempert is food editor of the “Today” show. He welcomes questions and comments, which can be sent to firstname.lastname@example.org or by using the mail box below. You can also visit his Web site at www.supermarketguru.com.
© 2013 MSNBC Interactive. Reprints