What’s the best way to save at the supermarket? From the minute you walk in to the impulse buys at the checkout, grocery stores are experts at getting you to spend more.
Grocers map your every move
Grocery stores employ a whole arsenal of clever tricks in an effort to get you to buy more. Among the clever sales tactics food store operators prefer to keep hush-hush: the very steps you take once you enter their domain.
Even if you walk into the store with list in hand, you are following a planned map devised for you by retail psychologists. That means you’re unwittingly going to be looking where the stores want your eyes focused, at the goods that earn them the most money.
Shoppers are like rats in a maze
Grocery giants have painstakingly dissected our shopping behaviors. One thing they’ve discovered: Most consumers travel stores in a counterclockwise direction. Amazingly, retailers with a main entrance on the right side tend to do better than those with the primary entryway on the left, according to Psychology Today.
“The whole design of a store is architected to entice the customers to run the full circle of the store,” said John Herndon of Accounting Enterprise Advisors in Livermore, Calif., who has worked with Clorox and Safeway.
Endcaps — the eye-catching displays placed at the head of each aisle, — are designed to draw shoppers down an aisle, around the corner and up the next aisle. “It’s like a rat in a maze,” said Herndon.
This practice, he said, has been in place “for generations” and is used by all the major chains.
“In an industry like retail grocery, where the margins are anywhere between 2% and 3%, they can’t afford not to follow a best practice like that because market share is so tenuous,” he said. “They have you trapped in there (for an average of) half an hour. It’s like a pachinko game.”
It’s cheaper on the outer loop
While endcaps cause many shoppers to make a hard right and keep going, you should try to remain in an external orbit, said Hank Coleman, the operator of the website Money Q&A.
The aisles are “primarily junk food, higher-margin items and things we really don’t need,” Coleman said.
“The smart consumer stays on the outside and saves money while eating healthier (items such as) milk, meat and bread.”
To track how shoppers traverse grocery stores, the Wharton School of Business authored a 2005 study in which radio frequency identification tags were affixed to carts. They learned that some consumers are indeed outsmarting the stores by sticking to the outer “racetrack,” while making only brief forays into certain aisles to pluck things like a box of cereal or a stick of deodorant.
Endcaps don’t mean discounts
Endcaps pose another danger for consumers. Many shoppers have the false impression that they always offer good deals.
Don’t go for the head fake, said Stephanie Nelson, who runs the CouponMom.com website.
“Endcap items capture shoppers’ attention easily. Sometimes they feature sales items, but that is not always the case, so shoppers need to pay attention,” Nelson said.
“Also, be aware on the day before store prices change that the stores may have stocked the endcap with upcoming sale items early, which means you’ll pay full price on those items until the price drops on the day prices change,” she explained. “Look for the item price before assuming those endcap displays are good deals.”
Supermarkets play the shelf game
When you do venture down the aisles, you should know that the way products are arranged on shelves is the result of key business maneuvering between retailers and food distributors. This is true at all the big chains.
“The more expensive, brand-name items tend to be at eye level, while the less expensive, generic varieties may be on the bottom or the top shelf,” said Nelson, of CouponMom.com. “Take time to look up and down to find bargain alternatives, if the name brand items are not on sale.”
In short, if a bag of chips of is poised at eye level, it didn’t land there accidentally. That bag is part of a strategy. The grocer and the snack maker want your attention fixed on that very spot.
Bottom-shelf items often cost 50% less than their upstairs neighbors, said Jessica Patel, an editor and analyst at consumer-finance website Bankrate.com.
It pays to be seen
Manufacturers aching to gain that coveted eye-level spot for their goods typically must pay the big grocery outfits a “slotting fee” for the privilege.
“A slotting fee is a big source of revenue for retail grocers,” said Herndon, of Accounting Enterprise Advisors.. “Without that, you might find a lot of these guys going down the toilet.”
For manufacturers, slotting fees “are just a way to get the greatest degree of visibility to their products. So you’ve got Clorox, Hidden Valley Ranch, the cereals, and on down the line,” he added.
In short, while shopping, you’re likely gazing at labels that companies invested a lot of money to place in front your eyeballs. According to the Federal Trade Commission, slotting fees for bread, hot dogs, ice cream, pasta and salad dressing products have reached $30,000 a year to cover shelf placements inside just one region in one grocery store’s chain.
Free slices can save you big bucks
Instead of buying your cold cuts at the deli counter, Bankrate’s Patel suggests you buy a whole cooked ham, a full turkey breast or a hunk of roast beef (preferably a cut that’s on sale) from the meat section. Then head to the deli and put the store employees to work for you.
“You can save 50% on cold cuts by buying (cooked meat) and asking the deli section to slice it,” Patel said.
“Many people have no idea they can do this, and it’s a nice trick to know if there’s a deal to be had on whole cooked, packaged meats. There isn’t a cost for the deli or butcher to slice it up for you,” she added. “It’s similar to having the bakery write a name on a birthday cake for you. It’s a service stores offer to their customers.”
‘Bulk’ doesn’t always equal ‘deal’
Many stores promote their bulk offerings as sweet deals, and they often are. For example, if Americans switched from buying prepackaged coffee to scooping coffee in the bulk aisle, they would save the planet 240 million pounds in foil packaging, and pocket some spare change, said Chris Reining, the founder of the personal-finance blog Mr. Everyday Dollar.. He cited researchers at PortlandStateUniversity, who found that packaged products are 89% more expensive than their bulk counterparts.
Now, the secret.
“A word of caution: The bulk aisle is not a utopia,” Reining said. “Be sure to compare the price of a bulk item to its packaged counterpart. For instance, I did the legwork and figured out that bulk almonds are almost double the cost of packaged, so I buy packaged. But one of my favorite things about grocery stores is they list the price per ounce on the shelf, so it’s an easy comparison.”
Ironically, buying in bulk can cost more when you’re buying at a bulk store, Patel said.
“It’s all about looking at the cost per item and breaking down the prices,” she said. “You also need to think about how much of the product you are going to use. If you can get a 5-pound tub of mayo for $8, is it really worth it if you are only going to use half the jar? Not really. At that point you just paid $8 to use the same amount you would have gotten in a smaller container worth $4.”
Savings on produce are in the bag
Are you one of those super-selective shoppers who paws through the apple bin to ensure your fruit isn’t bruised? Do you inspect each potato to keep ugly spuds from entering your cart?
Grocers love you persnickety types. But fruit and veggies already packaged in a brand-name (or generic) bag are often the better buy, according to Patel.
“The bonus to buying items such as potatoes, oranges or onions by the bag instead of singly is that each bag is required to have a minimum weight by law,” Patel said. “You usually wind up getting a bit more of the product, so grocers don’t go under that advertised weight — in essence, netting you a few free ounces of potatoes or oranges.
“Now you need to make sure you will use it all to get the best value,” she adds. “Spending a bit more to get more potatoes that you are going to wind up tossing isn’t a bargain at all; it’s a waste of food and money.”
Scanners make mistakes
Watch that beeping window at the checkout, said Andrew Schrage, the editor of the personal-finance blog Money Crashers.
“Scanners aren’t error-proof. Pay attention when the cashier is ringing up your groceries, and ensure that all sale prices are rung up correctly,” Schrage said.
Schrage points to statistics provided by the Wisconsin Department of Agriculture, which dispatches state inspectors to conduct spot checks of grocery scanners. Scanners there were incorrectly overpricing products nearly 5% of the time five years ago. More recently, that error rate had dipped to 2.8%, according to the state agency.
The extra pennies add up. According to ABC News, U.S. shoppers lose $1 billion to $2.5 billion a year on scanner blunders. Those checkout slip-ups appear to peak during retail crunch times, like the holiday season, when customers are in the biggest hurry.