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December 3, 1998

Holiday Budgeting

Save on Food & Groceries

1. Know thyself. Understand what sets you off into the "I owe you how much?" netherworld. If you're impatient and just buy the first thing that you see, go shopping on Tuesday or Wednesday, the least busy days of the week at the grocery store. Or if you're suckered by all of the yummy-smelling prepared foods at the hot deli, make sure you eat before heading out to Kroger's.

2. "Large" doesn't always mean "economy." Believe it or not, a marketing professor at the University of Pennsylvania (an Ivy League school, no less) has done a study showing that when consumers buy a large amount of something they eat it quicker. For example, you buy the "big is more" bag of M&M's (I swear, he studied M&Ms) and you're so proud of yourself because you saved money that you eat them all in one sitting. Be careful, if you do get the large sizes of food containers, that you don't fall prey to this syndrome.

3. Watch the register. Money Magazine found that because of scanner errors as many as 30% of the supermarkets they surveyed overcharged their customers. What's worse, of the stores who did overcharge, they found that they did it on about 10% of all their products. One more reason to keep an eye on that cute checkout girl.

4. Join a warehouse club. Save On magazine suggests joining a warehouse club. It says that warehouse clubs like Costco and Sam's Club don't stock a huge variety of food brands, but the stock they do keep tends to be of high quality and, above all, cheap. Save On compared prices of 12 popular food items at a suburban New York warehouse club and a chain supermarket a few miles away. (Among the items: Campbell's tomato soup, Cheerios, Chicken of the Sea tuna, Grey Poupon mustard, Heinz ketchup, and Oreo cookies.) The warehouse club was cheaper on all 12 items, with an average savings of 28%. Unlike supermarkets, however, warehouse clubs charge membership fees. The one they visited charged $37.89 to join, so you'd have to spend about $135 before those 28% savings really begin to kick in.

5. Join a co-op. Another Save On tip was to sign up for a food co-op or buying club. Here's how they work:

-- Food cooperatives are stores, ranging from full-size supermarkets to small specialty shops, owned by their members. At many co-ops, non-members can buy food, too, though they may not get as much of a discount. There are currently about 500 food co-ops across the U.S.

-- Cooperative buying clubs, also called preorder co-ops, are groups of consumers who buy food in bulk, then divide it up to fill individual members' orders. Members also volunteer time to help with the grunt work. Some 4,000 clubs now operate in the U.S.

To locate a co-op or buying club, call the National Cooperative Business Association at 800-636-6222 and leave your name and address. The association will send you a list of regional warehouses that supply co-ops; the warehouse nearest you can then refer you to outlets in your area. How much will you save? According to the co-op association, about 33% to 49% off normal supermarket prices, with the biggest savings coming at the buying clubs.

6. Try store brands. Generic brands are often as much as 30% cheaper than name brands and are usually produced by the same companies. To encourage customers to try their store brands many grocers offer a money-back guarantee on their house labels. If you try it and don't like it, take it back.

7. Understand the grocery store mind-set. Be careful about buying things that are displayed at the end of the aisles and at eye level. The grocery store is out to make as much money as possible and these are often the most lucrative items for the store.

8. Buy quantities you can use. If you think you're going to save money by buying a larger amount of something, make sure that you'll be able to use up what you buy. If half of your 20 lb. bag of potatoes spoils, you really haven't saved anything.

9. Made from scratch isn't always savvy. For example, bread and cakes are often cheaper from a mix than trying to make them from scratch, and they often taste just as good, if not better. Also, if your household is small, buy packaged salads instead of an entire head of lettuce that you probably won't finish.

10. Buy in season. There's a reason that we eat pumpkin pie in November and strawberries in May. That's when they're fresh and affordable. Scuttle the thought of having fresh blueberry pie for Christmas dinner. It will make you crazy trying to find them and drive you to the poor house even if you do.

- Trudy Bowen

Visit our Living Below Your Means message board for more money-saving tips.

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