My 25% Grocery Savings Rule
Published March 15th, 2008
For many couples, a significant portion of their monthly disposable income is spent on food. This includes groceries, eating out, and ofcourse the daily coffee and muffins many people can’t seem to do without. For both health and financial reasons we have done a major overhaul of our eating and spending habits over the last year.
We managed to slash our total food and household products bill by close to 50% over the last 12 months –saving over $5000! We accomplished this by drastically cutting back on eating out and coffee, making extra portions of food for lunch, planning according to the sales, shopping between three different discount grocery stores, stocking up on big ticket grocery items, and cutting out most of the pre-prepared foods in our groceries.
I’ve written about some of the above in other posts, and the advantages of buying locally grown food, but today I wanted to focus on my 25% grocery savings rule. I apply this rule consistently, and over time, I save huge amounts. I know…get to this magic rule already: I don’t buy most of my groceries or household products unless they are on sale for at least 25% off of the regular price at the discount grocery stores. Kind of anti-climactic huh? No, it’s not exciting, but it works for me.
One thing that self-made millionaires have in common, is that they find ways to keep more of the money they earn. I don’t mean they’re selfish, I mean that they’ve applied the principle of working smarter, not harder to their finances. These people understand the value of living below their means. Yes, when they find a good deal, they stock up–just like the rest of us. It just doesn’t make sense to pay 25-60% more for exactly the same item, does it?
In my part of Canada, there are a couple of prominent grocery companies–I find this confusing since the companies are always changing hands–and names . They each have several brands of grocery stores under their umbrella. For example, Loblaws owns the higher end stores like Fortino’s, Ultra, and Zehrs, as well as the discount grocery store No Frills. Metro owns A &P and Loeb as well as Super C, and Food Basics, to name a few. If you aren’t sure, you can always look at the house brands they have in common: The “No name” and “President’s Choice” brands can be found at the Loblaws owned stores, and the “Equality” and “Our Compliments” brands can be found at A&P and Food Basics. The bottom line here is that they are owned by the same companies, and sell the same food. Maybe the discount stores sometimes get the slightly deformed rice cakes, but do you care if it’s all safe to eat and the same product?! Even the fruits and veggies usually all come from the same distribution centre.
Many of the brand name and house brand products are even made in the same plant, on the same line, just put into different packages and shipped off. Like you, I’m attached to certain brands, and don’t really care about others. I’ve been so bold in the past as to see which house brands are as good as the real thing.
Like any other area of personal finance, when it comes to feeding yourself and your family, you need to do your homework and learn the numbers. You should know what the average prices are, and what is a good sale price is for most of the items you buy. Some items often go on sale, and the sales rotate every 6-12 weeks. Some items are just never on sale, so you need to find out where you can get the best quality and quantity for the lowest price.
My 25% savings rule in action:
Some items that do go on sale include: Paper products, condiments, large bars of cheese, yogurt, cereal, ice cream, canned soup, frozen vegetables, fresh fruits and veggies, meat, snack food, soap, detergent, and pop, just to name a few (when I say sale, I mean a real sale–at least 25% off what the discount grocery store sells it for regularly). You’ve got all of your basic food groups covered here, which, if you’re into healthy eating, should really be the bulk of your groceries anyway. I’m sure that some pre-prepared foods also rotate through the sales but I don’t buy them, so I wouldn’t know.
I’ve learned the prices and the sizes, and only buy certain things when on sale. How many items I buy depends on how quickly we go through it. Meals are planned based on what I already have stocked up on at home, and what is on sale that week. By deciding exactly how much I’m willing to spend on something, I never pay more than I need to. I just buy more at the next sale before my supply runs out. This does require some organization, but you get into the habit pretty quickly. The other advantages to planning ahead are less time spent wandering through the store, and less expensive impulse purchases.
I shop at 3 different discount grocery stores that are only within 10 minutes of each other, and on a good day can have all of the shopping for the whole week done in about an hour and a half. On Thursdays, I go online before the paper even comes out, and check out all of the flyers within a few minutes at the click of a mouse. The nice thing is that by shopping at different stores, I can always take advantage of the sales. For example, I buy cheese when 560 grams (a big bar), goes on sale for $3.99. I never pay more than this because it goes on sale at least once every 4 weeks at one of the stores, and when it does, I’m ready! If I do end up going into a full price grocery store for something, I smile as I walk by the same bar of cheese for twice the price 
I know that real maple syrup never goes on sale at the grocery store, so I found the cheapest place to get 1L of it is at Costco for $9.99 (as opposed to $7 at the grocery store for less than half of that). So you can even apply this principle to items that don’t go on sale, you just have to be willing to do your homework. Yes…my American friends…maple syrup…you must try this with your pancakes!
The disadvantage to shopping at a discount grocery store, is that there is often less selection. This hasn’t been a problem for me, since I make most of our meals from scratch. If I do want something special or different, I’ll just pop into one of the full priced stores and pick it up. After all, so many people have far less selection than we do in North America, and do just fine. As I’ve mentioned in some of my food articles, when you look at working with the basic food groups in their true and unprocessed from, the possibilities for what you can make are endless!
If something I usually buy doesn’t come up on sale, then I just do without and get something else in the same food group, or have a back-up brand that I go to. Flexibility certainly comes in handy when it comes to being frugal: I look at it as adding variety and way to experiment with new foods.
It’s also a good idea to keep an eye on the flyers for the full priced grocery stores and other stores, because they can also have good sales. The loss leaders and best deals are generally on the first and last page of the flyer if you’re short on time. There have been so many times I’ve been short on something, and lo and behold it’s on the front sale page of the Zehrs flyer! Also, you know it’s a really good price if they put a limit on how many you can buy.
Just keep in mind that every store has its advantages and disadvantages, and having variety in your diet can be great for you. The key is to really know your prices, spend a bit of time planning ahead, and to be consistent. Like many aspects of frugality and personal finance, slow and steady wins the long term race.
Want to learn more? Check out the series below on how to implement my grocery savings rule in our life!
My 25% Grocery Savings Rule in Action-Part 1: Introduction
My 25% Grocery Savings Rule in Action-Part 2: Planning and Resources
My 25% Grocery Savings Rule in Action-Part 3: Challenges
My 25% Grocery Savings Rule in Action-Part 4: Case Study # 1
My 25% Grocery Savings Rule in Action-Part 5: Case Study # 2
A on March 18, 2008
Congrats on the Festival of Frugality!
This is a really great post. I have started to adopt some of the same tactics as you, but the stinky part it that it takes several months to start to figure out the schedules and sales. My town only has 3 (well kinda 4) grocery stores. 2 of them are Wal-Marts (oh how I loathe thee- and wish I didn’t have to shop there!) Sales are kinda hard to come by because supply is so much less than demand, but still I do the best I can!
frugalscholar on November 24, 2008
This has been the key to my savings on food! The Grocery Game has you count your savings from the “retail” price (which is why people claim 60-90% savings). Counting from the “already low” price tells you your real savings!