Shopping for Food

Americans consume a great variety of foods. They can choose from thousands of different food products and buy them at thousands of stores. Hundreds of brands offer numerous choices. With pizza alone, Americans can choose fresh-baked or frozen, deep dish or thin crust, meat lovers’ or vegetarian, or even pizza in a cone. In all, American consumers spend hundreds of billions of dollars a year on food. In this section, you’ll learn how to get the most from your food dollars.

Comparison Shopping

Shopping for food involves many considerations, including brands, sizes, quantities, unit prices, freshness, the availability of coupons, and store locations.

Economics & You How much do you spend per week on food? Is there any way you could spend less? Read on to learn about ways to save on food by comparison shopping and planning ahead.

Because American families spend so much on food, comparison shopping is important. It involves making comparisons among brands and sizes before you buy. You need to decide not only what to shop for but where to shop as well. A consumer should do only as much comparison shopping as is worthwhile, however. It does not pay for a shopper to go far out of his or her way to shop at a store that has only a few needed items at low prices. The additional costs of time and transportation would outweigh any potential savings.

Remember, your time has an opportunity cost. The more time you spend comparison shopping for food, the less time you have to do anything else.

Figure 5.1 Club Warehouse v. Convenience Stores

A. Club Warehouse Stores

Although these stores generally offer lower prices than grocery stores, you must buy most items there in bulk. Also, these stores often require people to become members in order to shop in them, and there is usually a membership fee involved. You need to make sure your potential savings on the items you will buy will be more than the other costs. Two popular club warehouse stores in the United States are Costco and Sam’s Club.

B. Convenience Stores

Although these stores are easily accessible, the selection of items is very limited, and you will pay a much higher price for most items than you would in a regular grocery store. You should shop in these stores only when you really need to save time.

There are different trade-offs involved when you choose to shop at a club warehouse or convenience store rather than a regular grocery store.

Trade-Offs in Stores

Deciding what food to buy involves numerous trade-offs.

Economics & You Which resource is more important to you: time or money income? Read on to learn about trade-offs between saving time and saving money income when shopping for food.

Americans typically do their food shopping either in grocery stores or in club warehouse stores, which charge lower prices than grocery stores do. Club warehouse stores sell a limited number of brands and items. Although these stores offer the largest potential savings for your food dollars, there is a trade-off.

Most food items are only available in large quantities, such as a “value-pack” of soup with 24 cans. Unless your family is large and eats canned soup regularly, you will have unused cans of soup in your cupboard for a long time. Therein lies an opportunity cost. You have tied up your funds in an inventory of food.

Occasionally, you may want to use a convenience store, such as 7-Eleven, for just that reason—because it’s convenient.

These stores are usually open 16 to 24 hours a day, but they carry only a limited selection of items, and they are considerably more expensive than grocery stores. See Figure 5.1 for more information on club warehouse and convenience stores.

Brand-Name, Private-Labeled, and Bulk Foods

When you go grocery shopping, many of the food items have well-known brand names. Some food stores also carry regional brands that are found only in certain areas of the country.

As an alternative to relatively more expensive national brands, some grocery stores and club warehouse stores carry their own store-brand products. These are also called private labeled products. According to some consumer surveys, it is possible to save as much as 40 percent by buying such products.

You can often save even more by purchasing bulk items. See Figure 5.2 below for more information on these kinds of items. There is often a trade-off between quality and price in the products you buy. A lower-priced store-brand dishwasher soap might leave a slight film on your drinking glasses, for example, compared to a more expensive national-brand alternative.

Often you will find that the larger the quantity of any item you buy in a supermarket, the lower the per-unit price. Most states require stores to provide unit pricing for food and other products. This practice makes it easy to compare prices not only for different brands, but for different sizes of the same brand.

For example, the price of milk might be expressed in terms of cents per ounce. You can then tell how much you save per ounce if you buy milk in larger containers.

Figure 5.2 Store-Brand and Bulk Foods

A. Bulk Products Bulk products are sold in large quantities, usually at club warehouse stores. Also, as shown here, they can be sold loosely—that is, you can take as much or as little as you want, and you will generally pay a lower price per unit

B. Store-Brand Products Store-brand products are the products retailers sell as their own brands. They may bear the name of the retailer selling them, such as Kroger or Safeway, or they may be sold under an entirely different name such as “Best Yet,” which is sold only at KMart.

Some food products are available in store-brand and bulk forms. Both store-brand and bulk foods usually have a lower price than brand-name products.

Cents-Off Coupons

Many manufacturers give cents-off coupons. The use of cents-off coupons, however, requires time—the time to collect and match them to items when shopping. Because time is a scarce resource, you have to decide if the amount you save using coupons is worth the time you spend. In addition, coupons tempt you to buy brand name products you might not otherwise buy— thus not saving you much at all.

Store Discount Cards

Most grocery-store chains now issue store discount cards, which they might refer to as “advantage cards” or “loyalty cards.” Using these cards is optional, but customers who choose to use the cards pay lower prices on some items. Store owners say the cards reward their loyal customers by offering discounts. The cards have drawn criticism from consumers’ groups, though, who claim that rather than paying reduced prices, card holders are really paying the usual price, and non-card holders are paying an inflated price. Also, the cards are used to track customers’ spending habits for marketing purposes. Some people feel that this practice is an invasion of customers’ privacy.

• club warehouse store: store that carries a limited number of brands and items in large quantities and is less expensive than grocery stores
• convenience store: store open 16 to 24 hours a day, carrying a limited selection of relatively higher-priced items
• private-labeled products: lower-priced store-brand products carried by some supermarket chains and club warehouse chains