Ever wonder why grocery stores try so hard to build shopper loyalty with special reward cards and offers? The reason is that your loyalty is vital to their profits. Here’s why.
Simply put, no store can offer the lowest price on everything.
In fact, most stores offer different products at various mark-ups, a process called merchandising the mix. Some products will be sold at cost (loss leaders) or at a small 5% mark-up. Other products will be sold 10%, 15%, or 20% above cost.
Your local store entices you into the store by advertising products with little to no mark-up, then count on your loyalty to remain in the store where you’ll also purchase the more lucrative 10%,15% and 20% mark-up items.
This is a crucial point. The low prices stores offer on some products is offset by the higher prices they charge on other items.
Now here’s how you use this simple fact to your advantage.
First and foremost, begin by throwing store loyalty out the window. Pick two or three different national chains that you will each frequent at least once a week. The key is to buy the low mark-up products at each store.
Now supermarkets have been clever at promoting the myth that you’ll waste more in gas by visiting a competitor’s store.
This is simply not true. In most mid-size to large cities, increased competition has resulted in major supermarket chains locating stores right near each other.
In smaller cities, major chains often have stores within a few miles of each other. While it might cost you at most $4-5 dollars in gas you can easily slice 20% off of your grocery bill – for many families this can add up to $100 or $200 dollars per month!
Personally, I shop in a location where there is a Dominicks supermarket located just 700 yards away from a competing Jewel-Osco store.
How do you tell which stores are selling which products at the lowest price?
Use a price book. This is a simple notebook in which you keep track of the lowest price you have paid for the products you commonly purchase. In it you’ll write down the product, the unit price you paid for that product, date, and store you bought the product in.
When you see a product in a store, check your price book. If the price is close to or less than the price in your price book, stock up on the product. If its not, wait until you visit the next store on your list or until the product goes on sale.
By cherry picking the deals at each store you’ll enjoy huge grocery savings.
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