Price Components
The primary grocery price components you need to become familiar
with are as follows:
- Base or everyday price - Discounts (sales) - Give-a-ways - Unit costs - Other incentives (coupons, rebates) Base price The base or everyday price is defined as: the price of an item before any discounts, give-a-ways, or incentives have been applied. The prices of most items in any grocery store will perpetually fall into this category. My research has shown the following about base prices: 1. Publix base prices on all of the products I purchase on a regular basis (and certainly on those you purchase) range from 8% to 66% higher than Wal-Mart's base prices (more on this later). Note: Despite Publix having higher base prices, it would be a mistake to shun them altogether because their buy-one-get-one-free sale prices definitely beat Wal-Mart's base prices. 2. Target's base prices also beat Publix's but are slightly higher than Wal-Mart in most cases. If your stores differ from mine, you will have to spend some time recording and comparing prices for the items you buy most often. This is the only way you'll know where to get the best everyday price. Discounts Discounts, or sales, are temporary price reductions designed to lure you into a store. While Wal-Mart does not conduct true sales, they do have what they call rollbacks. Wal-Mart rollbacks can be either temporary or permanent price cuts. So, in some sense they could be called sales. At any rate, you may want to stock up on a particular Wal-Mart rollback item if you feel its lowered price is temporary in nature, especially if the item does not go on sale very often at other stores. Remember that in my strategy, Wal-Mart almost always serves as the store with the lowest everyday prices, and that sales at Publix and Target often trump Wal-Mart. Give-a-ways Give-a-ways are usually in the form of a free item if you buy so many of the item. They also serve to bring in customers. Examples: - Buy one and get one free (B1G1 or BOGO) - Buy three and get one free (B3G1) - Buy this item and get a different item free - Buy the brand name item and get the equivalent house brand free. Give-a-ways are a mainstay at Publix (my main sale store) and are a very important part of my price-reducing strategy. When combined with base-price comparison shopping and coupons, give-a-ways result in a powerful way to reduce your grocery costs. Factoid: I have purchased as many as ten of a BOGO item at Publix without any comment from the cashier (thus getting five of them at no cost to me). Unit Cost The unit cost is defined as: the price you will have to pay for a certain portion of a product, say an ounce, a pound, a can, etc.. Each product's unit cost is usually displayed on the shelf just below the item. The unit cost is the lowest common denominator and can be used to assure that you are getting a good deal. When comparison shopping, use the unit cost to determine the best price on equal or different sizes of the same product or even a similar product. Tip: Having a shopping list spreadsheet like the one featured on the Essential Spreadsheets page provides an effective way to calculate and compare unit prices. How to calculate the unit price If 44 ounces of Jif peanut butter sells for $6.44, the unit cost is 14.6 cents as follows: $6.44/44 ounces = 14.6 cents per ounce Other Incentives (coupons, rebates) - Coupons are the most prominent incentive offered to consumers and should be included in your shopping strategy (more on this coming up). - A longstanding, less-popular incentive is the mail-in rebate. These discounts can be quite valuable; just be sure to mail the required paperwork before the offer expires. Summary While grocery stores can negotiate prices charged by their suppliers and vendors, consumers have only one recourse when it comes to saving money... ... to reduce the purchase price through careful consideration of the price components discussed above. Next: When & Where to Buy |
Food Facts
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