You’re overpaying for groceries, but here’s what you can do about it now

Certainly, collecting coupons or participating in a grocery store’s loyalty program can reduce your bills. But that savings comes at a price, and you have to factor it in when you’re comparing rates.

“Price remains key, but price alone is no longer enough to win by itself,” says Frank Kroger, a vice president for shopper marketing at Valassis, a Livonia, Mich., marketing company.

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Shoppers say their definition of value has changed to include price as well as customer service, convenience and added services, such as online ordering and curbside pickup, he notes.

Kroger’s advice? “Look at the overall value of their shopping experience. Is it saving you money, or is it saving time or angst?”

Indeed, that is increasingly how grocery shoppers define “competitive.” It’s a big-picture definition that includes price, convenience and experience.

“Consumers are really demanding a retail experience but also want price and convenience,” says Keith Daniels, a partner at Carl Marks Advisors, an investment banking firm.

In other words, you’re probably better off not obsessing over why a gallon of milk costs 5 cents less at the other supermarket, and focusing on the fact that your preferred grocery store is closer, has the items you want and offers friendly service.

True, your bills are rising, but only because it’s that time of year. If you’re like most Americans, you’ll probably overspend for groceries this Thanksgiving (oh, and don’t forget the other holidays coming up), but add it all up, and you probably didn’t get ripped off. And you can take the FTC’s word for it.

Are groceries too expensive?

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9 thoughts on “You’re overpaying for groceries, but here’s what you can do about it now

  1. Please, please, please go back to a single page for each article. It is really annoying to have extra clicks to see the whole thing.

  2. Are groceries too expensive is a relative question.
    If I make $20 million a year, they’re cheap.
    If I make $300/week, they’re out of sight expensive.

  3. I’m glad the FTC is keeping large mergers chains with a lot of overlap on a short leash, but it IS true that the grocery industry generally runs on very tight net margins. (Markups over the raw cost of the goods look high, but there’s an immense amount of labor, spoilage, facilities, promotional expense, etc. involved.) There isn’t anybody minting money there. In many stores, the only departments to make much in the way of profit are Deli/Bakery, Drug/Cosmetics, along with the departments where space is leased out and vendor-serviced. (Non-fresh bakery, Snack foods, Soda, and Beer/Wine) Produce, Dairy, and Meat have high shrinkage due to spoilage, and Grocery (non-perishable foods) is not particularly high margin to begin with.

  4. Near my house are two grocery stores. One is Giant, that has a gas station on site with the lowest prices around, plus offers gas savings from buying groceries. the other doesn’t. Guess which one is significantly more crowded.

  5. After January 20, the FTC may no longer exist or, if it’s still there, blocking mergers will not be on the agenda. Consumers in the United States are about to find out what pure, unregulated capitalism looks like.

  6. If you have the means to stock up at sales, and can buy low and seasonal, groceries aren’t too bad, but for people living week to week, who can only buy that week’s food and/or like out of season produce, groceries can be very expensive. Also, groceries are expensive at mini-marts in poor parts of cities, and cheaper at places like Aldi’s way out in suburbia.

  7. Where I live (B.C. Canada), we have a choice of Safeway, Costco, Save-On-Foods, Walmart, No Frills, Superstore & other smaller markets, to purchase our groceries. A few of these stores ‘price match’, so to save money, I collect all of their flyers, make my list & go to Superstore.
    They will match all prices, have the lowest gas prices,( with loyalty card), all cashiers are open on weekends, & they have an excellent loyalty program, which provides cash for future grocery & pharmacy purchases. None of these stores is more than a 5 or 10 minute drive away, so competition is very healthy here.

  8. I shop at Whole Foods so food shopping is expensive for me, but I’m okay with it. I like the experience, and the yoga pants/ponytail moms.

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