Groceries Savings Guide

It's the second-largest bill in most household budgets, but there are some smart ways to cut the cost of Groceries.

Guide Contents

    Groceries: The 2nd-Largest Household Bill

    Supermarkets are desperate to win your business using promotions, permanently-reduced prices, homebrands and other tricks.

    Competition is fierce, which means that you as a consumer can take advantage to save money.

    As an industry, supermarkets in Australia earn annual revenues in excess of $101 billion (IBIS World, Market Research Report: Supermarkets and grocery stores in Australia, October 2017). That shows just how much we spend on food in Australia.

    Fact

    An average Australian household will spend $240 a week on food and non-alcoholic beverages (ABS, Household Expenditure Survey, 2015-2016).

    At $240 a week, that’s over $12,000 a year that consumers must budget for – and our second-largest household bill after housing costs.

    But a big bill means big potential for saving. Find ways to reduce the cost of food by as little as 20%, for example, and there is a potential saving on offer of over $2,400 a year.

    So here is the 9Saver Guide to Spending Less at the Supermarket.

    Which Supermarket is Cheapest?

    There is not a great deal of difference between Coles and Woolworths pricing, but Aldi routinely comes out cheaper in Supermarket price checks.

    The consumer watchdog Choice found consumers can save nearly $80 a shop by switching to a basket of Aldi budget products – as long as you’re not attached to name brands in the bigger Supermarkets.

    The survey compared the average cost of 33 items at Coles, Woolworths and Aldi across 110 Australian supermarkets, including Items such as Nutri-grain, OMO laundry detergent, Tim Tam, Coca Cola, Dairy Farmers Milk and five fresh fruit and vegetables. The results?

    Savings tips for ALDI shoppers

    ALDI has about 500 stores across the country and is spreading from the east coast to SA and WA. You can see if there’s a store near you or one opening soon using this locator.

    Aldi is a bit different to Coles and Woolies, and it’s not for everyone. It lacks the broad range of the Supermarket giants, and some of the bells and whistles.

    But for those who do shop at Aldi, here are some of the ways you can reduce your spend at the discount German supermarket.

    SPECIAL BUYS: Aldi’s famous twice-weekly ‘Special Buys’ each Wednesday and Saturday discount items such as furniture and electrical goods. They are themed each week (one week: ski gear, next week: garden tools). But with limited stock at each store you have to be quick if you want to net some bargains. A $99 grey armchair once reportedly sold out within 20 seconds at a Chatswood store in Sydney!

    “COPY CATS”: If you’re willing to try grocery brands from Aldi that you may not see stocked on the shelves at other supermarkets, it’s even cheaper. Items such as baked beans have a similar look and feel to big name brands when it comes to packaging (they’ve been called “copy cats” and “phantom brands” for this reason), but the Aldi products are sometimes on offer for a fraction of the price of the big-brand original.

    HEALTH FOOD: Aldi’s own brand of wholefoods includes seeds, shredded coconut, chips, dried fruit and even some superfoods like goji berries.

    AWARD-WINNERS: Aldi products might be cheap, but they can also be award-winners. Their cheeses, for example, picked up 49 medals at the Sydney Royal Cheese and Dairy Show in 2013 and their Blackstone Paddock Margaret River Cabernet Sauvignon 2015 wine was awarded Gold at the prestigious Royal Adelaide Wine Awards while selling at just $17.99 a bottle.

    You can subscribe to Aldi’s e-newsletter here or download their apps here

    13 smart ways to cut the cost of grocery shopping

    The weekly grocery shop isn’t cheap. In fact, it’s likely your second largest expense (after your mortgage or rent) and can cost upwards of $300 a week depending on your family size.

    While ‘eating less’ and ‘going without’ can significantly reduce your costs, we prefer the approach of shopping smarter to spend less.

    This includes implementing strategies to hunt down deals, ascertain the true value of the products you buy and adapt your weekly food needs to focus on continuously bringing your grocery costs down.

    Here are 13 tricks to cut grocery bills:

    1. Plan your shop & save up to $1000 a year

    Before you set foot in a supermarket, know exactly which products you need to buy. You want to avoid ‘browsing’ or wandering aimlessly between aisles; this is playing into hands of the Supermarket’s marketing experts and it’s a guaranteed way to buy things you don’t need.

    Start by reviewing what you already have in your pantry and fridge and writing a concise list of items you need to buy. This is best done with a view to the meals you will be eating for the following week, so create a rough plan.

    Aim to use up the ingredients and items you already have; make it a game to try and finally use that last can of tuna or tin of peas! Stop letting food expire. Take the no new food challenge’ for a week.

    Fact

    Over $1,036 of food in the average household goes to waste each year, according to the NSW Government’s “Food Waste Avoidance Benchmark Study” in 2016.

    Top reasons for food wastage include:

    • Buying too much food
    • Cooking too much food
    • Poorly storing food / leftovers
    • Failing to eat leftover food in the appropriate timeframe

    2. Go shopping at night or at slightly odd times

    Shopping on a Saturday at 9am doesn’t just mean battling crowds; it can also mean bigger bills. Shopping later in the evening or at odd times will help you save money in two key ways:

    Shopping in the evening means you get access to end of day specials and price reductions. This applies to baked goods, fresh produce and a range of other items that need clearing. Supermarkets will try and reduce these items to ensure they don’t go to waste – this is your chance to save 30-40% off the marked price with no reduction in quality.

    You will avoid the masses and have the chance to be methodical in your aisle approach. Without the stress of other people and crowds, you can spend more time obtaining the items on your list and assessing the best deal for each.

    3. Buy fruit and vegetables in exact quantities

    The number one culprit for food wastage? Fruit and veg. How many times have you thrown out over-ripe bananas or vegetables that have sprouted new life forms?

    Always buy perishable items in exact quantities. This requires pre-planning and an understanding of how much you need for each meal. As this is not an exact science, the key is to learn from your previous mistakes by assessing which items you often throw out and why you didn’t use them.

    4. Never go shopping hungry (or with kids, if possible...)

    The hungrier you are, the more likely you are to impulse-buy.

    Top tip

    If you like to be active in the evening, why not shop after dinner? You won’t make purchases out of hunger, you’ll burn some calories, and you’ll get end of day specials.

    Similarly, everyone with kids knows that taking them shopping with you is less than ideal. If you CAN get someone to mind them while you focus on doing the shopping, this avoids the ‘pester power’ of your kids asking for things, but more importantly it gives you more time to reduce your weekly grocery expenses by focusing on hunting down the best value for each item.

    5. Shop at multiple supermarkets (loyalty does not pay)

    While the supermarkets have spent a lot of marketing money leading you to believe that accruing points and using their rewards scheme will save you money, the truth is that nothing saves you more money than simply showing no loyalty at all and instead focusing on the cheapest shelf price you can find.

    This means you should do your grocery shopping across multiple stores. This ties in nicely with the next tip.

    6. Shop at a shopping centre that has multiple supermarkets

    Competition is the key to saving money. If you opt to visit a shopping centre that has Coles, Woolworths, IGA and Aldi  under the one roof, you have the ability to easily compare prices and split your weekly shop across multiple stores. Coles is on the record saying that “store managers also have the discretion to lower prices on individual items to compete in local markets, which means prices sometimes vary slightly on individual items between stores’.

    If you can, visit a shopping centre where they are all located together.

    7. Use ‘grocery unit pricing’ to ascertain value for money

    Grocery unit pricing refers to the lower half of an item’s price tag, where it breaks down the cost of the item per KG for example.

    This allows you to compare the product to its competitors on a like for like cost basis, instead of its packaging or brand name.

    For instance, when you buy a jar of coffee – the grocery unit pricing tag will tell you the cost per KG of the product. As coffee comes in varying sizes, this measure will let you assess the true value of that coffee to ensure you are getting the best price per KG.

    This method of ascertaining value is particularly useful to dispel the myth that buying in larger quantities is always cheaper; sometimes this isn’t the case and you are actually better off buying many small jars of coffee instead of the big one (depending on the weekly specials). Also, just because a product is the cheapest on the shelf from a price tag point of view, doesn’t mean it’s the best value.

    8. Shop for specials, if you have the time

    Another tactic to pay less for groceries is to avoid meal planning altogether and instead purchase only the items that are on special or discounted. This requires you to slightly gamble on what it is the supermarkets are discounting that week; not particularly easy if you have a family of fussy eaters.

    But for those who are single or eating on their own, and can buy specials first and plan meals second, this can be a useful way to get not only variety but to save money by doing so.

    9. Avoid purchasing items that are packaged for convenience

    Convenience comes at a cost (much like a 7-Eleven is more expensive than a supermarket) – so avoid anything that is designed to be ultra-convenient if you can.

    For example, Aldi often package and wrap small trays of fruit and vegetables to expedite the checkout experience. Also, pre-packaged quantities in the meat and cheese section will cost you more than exact quantities from the deli section.

    10. Do the grocery shopping weekly, not daily

    Shopping daily increases your chances of impulse purchases. Shopping weekly, while requiring more upfront planning, is a great way to buy in quantities that enable you to prepare your meals in a more time efficient and cheaper way.

    While shopping daily can help you buy what’s on special, the majority of consumers struggle to withhold the temptation of impulse purchases. Further to this, shopping weekly means only one car trip to the shops instead of 5+.

    11. Be cautious of shopping online for groceries

    According to a 2016 mystery shop by Fairfax Media, purchasing your groceries online can see you pay upwards of 10% extra for the same products. While incredibly convenient, this additional cost is further compounded by the delivery charges you will pay.

    The primary market for online grocery shopping is time-poor individuals, who are likely value their own time higher than the savings they could make by visiting a store themselves.

    Again, convenience costs extra (see point 9 above). If you want to save, visit your local supermarket in person.

    12. Shop in a cheaper suburb

    Excluding nationwide specials, it pays to know that each supermarket has the ability to vary its own pricing. This means there can be a 10% difference in your grocery basket based on which suburb you visit.

    Remember, do your own research and visit a single supermarket brand at two locations. Compare the basket prices to ensure you aren’t paying a premium.

    13. Buy shares!

    Given how much we all spend on groceries, why not buy shares in the supermarkets to have a portion of their profits returned to you in the form of capital growth and dividends?

    While it won’t recover your yearly costs of food, it gives you a chance to recover something and make an investment in a company you use at the same time. (Who knows; you might already be invested in them through your superannuation…)

     

    9 tricks the supermarkets use to make you spend more

    Supermarkets have spent the past 50 years finessing their ability to maximize sales once you enter their store.

    The psychology of shopping is complex and the supermarkets employ people solely to design the store so that you will spend more.

    For example, discounted milk is placed at the rear of the store; this forces people to walk down an entire aisle (often the bakery aisle) in order to retrieve. It’s small tactics like this that encourage you to ‘stock up’ while you are there.

    Here are 9 tricks that supermarkets use to make you spend more:

    1. Store layout

      The layout is designed to maximise your time shopping and cross-sell you complementary items. Similar to how IKEA makes you wander a single, meandering path of furniture to leave the store, supermarket aisles are designed to both help and hinder your shopping efforts.

      They help you by conveniently categorising the items you need together, but they hinder you by doing a really good job of making you scan each and every shelf to find what you are looking for. The more time you spend ‘seeing things’ the more likely you are to make an additional purchase.

    2. The checkout

      The checkout is the perfect place to showcase incidental and low-cost items that do not require a lot of brain power in the decisioning process. Items such as chewing gum, chocolate bars, bottled drinks and magazines are perceived to be low cost and budget-friendly, but can add up over the long run.

    3. The smell of freshly baked goods

      The smell of freshly baked bread is well-loved and creates a moreish desire to eat. Whether intentional or not, this smell has the potential to make you want to buy more.

    4. In-store music

      Psychologists agree that music plays a big part in our desire to consume in a retail environment. Stores have the ability to create a sense of calm or even a sense of urgency.

      Similar to how an upbeat / fast tempo song gets you motivated to work out at the gym, calm and soothing music can make you feel relaxed, happy and most of all – willing to take your time. Cue those smooth classic hits!

    5. End of aisle displays

      Each aisle ends with a strategically set-up display. The display will often showcase a weekly special to entice you to buy. This could be a paid placement by a brand or a way for supermarkets to push products that are high-margin.

      Sometimes the products showcased in these displays are completely out of context and unrelated to the aisle. It’s hard to use ‘grocery unit pricing’ and compare similar products when items are out of context.

    6. Eye-level selections

      Supermarkets along with other retailers (such as Kmart, Big W and Target) utilise their shelf heights to obtain the attention of the relevant audience. Items at the checkout and in the confectionery section are often placed at the perfect eye level of children. The resulting “pester power” creates in-store arguments that often result in parents buying items they otherwise wouldn’t.

      Expensive and prestige brands are situated on the middle shelf, at adult eye-level. If you physically crouch down to find lower cost items, you’ll save money.

    7. Buy one, get one free!

      This tactic is a great way to push discontinued products. Remember, just because you get one free doesn’t mean to say that there isn’t a cheaper option sitting alongside it. Offers such as this are more likely to be run on premium brands, where you are likely already spending more than you should on the item to account for the brand name.

    8. Trolleys versus baskets

      The more space we have, the more inclined we are to fill that space with ‘stuff’. The same goes for shopping trolleys. Shopping trolleys normally outnumber shopping baskets 5:1 in terms of availability.

      If you only need a few items – don’t take a big trolley.

    9. Taste testing teams

      Again, this is often paid marketing by big brands. The chances of you buying the product after tasting it is exponentially increased. This is not simply due to your liking of the product; it’s because you feel obliged and compelled to buy after you get something for free.

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