Although inflation seems to be easing, the cost of food and essential items remains significantly higher compared to last year. With everyone needing to eat regardless of increasing prices, many individuals are finding inventive ways to cut down on grocery expenses. You might already know about strategies such as cutting coupons, sticking to a shopping list, and opting for generic brands instead of name brands to save money.
While these strategies are beneficial, there could be several methods you haven’t considered that can assist you in keeping more money in your wallet. Read on for insights to maximize your budget.
Why are groceries currently so costly?
If you think that food prices are skyrocketing, rest assured it’s not just your imagination.
As reported by the USDA Economic Research Service, food prices for items purchased at home increased by 7.1% from April 2022 to April 2023. This follows an 11% rise in retail food prices from 2021 to 2022, as stated by the Government Accountability Office (GAO), marking the largest increase in four decades.
While inflation plays a significant role, it’s not the sole contributor. Other contributing factors include:
Rising labor costs: The expense of food production is escalating as the labor market becomes tighter. According to the Federal Reserve Bank of Kansas City, a constrained labor market translates to wage increases, which have elevated production, labor, and distribution costs. These increased expenses are then passed on to consumers through higher prices.
Animal and plant diseases: The outbreak of avian influenza from late 2022 to 2023 led to a sharp increase in egg and poultry prices. In December 2022, the USDA reported that egg prices hit record highs, averaging around $5 per dozen. This represents a 200% increase compared to 2021 prices. Additionally, citrus greening—a disease that affects a tree’s ability to produce fruit—has negatively impacted citrus yields.
Conflict in Ukraine: Ukraine typically provides 9% of the world’s wheat, 12% of its corn, and 17% of the global barley supply. The GAO indicates that along with a reduced supply of wheat and other grains in the U.S. due to drought conditions, the ongoing conflict in Ukraine is likely to result in higher bread and cereal prices.
Wildfires and droughts: These adverse conditions have harmed crops nationwide, leading to a reduced yield of food available for consumers. For instance, in California, severe weather has caused delays in planting, increasing the chances of produce shortages.
Strategies for saving on groceries
Your grocery spending will depend on various factors such as where you shop, the items you select, and the number of individuals you need to feed. However, by making some straightforward adjustments to your shopping habits, you can extend your food budget further.
1. Prepare meals at home.
Cooking at home instead of dining out or ordering takeout is undoubtedly a smart way to save money on groceries. The Bureau of Labor Statistics reported that restaurant food prices increased by 0.4% from March to April 2023, whereas prices for food prepared at home fell by 0.2% during the same period.
Additionally, making your meals allows you to control the quality of your ingredients. When dining out, you might not know what was included in your meal preparation. At home, you choose the ingredients and determine the quality and quantity of what you use.
2. Create a meal plan.
Implementing a meal plan can assist in structuring your grocery list. While some may prefer to prepare one dish and consume it for several consecutive days, you don’t need to go to such lengths. Choose some ingredients you enjoy (preferably those on sale) and formulate multiple recipes around them.
For example, if chicken is on sale, you could cook one or two pounds on Sunday. Throughout the week, you can make tacos, barbecue, enhance the leftover plain chicken with a slow-cooked meal for a busy weeknight, or use the remaining chicken for quick dinners or salads. Experimenting with spices and condiments can keep things interesting.
3. Utilize what you already possess.
If you’re a bargain hunter, you may have accumulated non-perishable items such as canned goods and staple ingredients when they were on sale. With a well-stocked pantry, consider planning a few meals each week based on what you already have, and then supplementing grocery trips rather than the other way around.
This approach not only saves you money but also reduces food waste by using up what you have before it spoils. If you have a freezer, consider stocking frozen fruits and vegetables, and take advantage of sales on meat by freezing it for later use. Canned goods can make for a quick, hearty meal, especially when combined with spices and sauces.
4. Check unit prices.
While strolling through the store, it’s easy to grab products based on familiarity with brands and sizes. However, this can sometimes result in unnecessary spending. Always check the unit price for each item instead of relying solely on the retail price shown on the shelf label.
The unit price, which is generally printed in smaller text next to the retail price, allows for better comparison of prices among different sizes and brands. You might discover that one brand offers more for a lower unit price or that purchasing a larger size, even if it costs slightly more initially, is a better deal because you get more for a lesser price overall.
Also, be aware that more expensive items often are placed at eye level in stores, so check higher or lower shelves for better deals.
5. Take advantage of cashback or loyalty programs.
Many retailers offer loyalty cards or points systems that can be redeemed on future purchases or even at gas stations. Certain credit cards provide cash-back rewards for grocery shopping, gas, and other household expenses. Accumulating rewards for a larger grocery trip can help stretch your budget further.
While cashback amounts may vary, utilizing a card that offers a percentage back on each purchase can mitigate rising costs. Just ensure you choose a card without an annual fee, a low-interest rate, and provides a significant cashback percentage—some credit cards offer between 1% and 6% back on groceries. Look for introductory bonuses that can add to your savings, and always aim to pay off the balance monthly to avoid accruing interest.
6. Utilize rebate applications.
Apart from cashback offers, you can use rebate apps like Fetch or Ibotta to save even more. These applications help you find deals whether you’re shopping online or in-store, allowing you to earn cashback or points redeemable for gift cards on certain purchases.
Rebate apps collaborate with retailers such as Target, Walmart, CVS, and Costco, among others. Users can select a store, select offers on products they wish to purchase, and then photograph their receipt to receive additional cashback. Linking your store loyalty accounts can also lead to extra discounts.
7. Think about joining a wholesale club.
Joining a wholesale club like Costco can be beneficial for saving money, especially for larger families. You can also share bulk purchases (and their costs) with family or friends. While most wholesale clubs require an annual membership fee, they may be worth it. If you have the storage capacity for items and are certain you’ll use them before they expire, buying in bulk can yield substantial savings compared to making frequent smaller purchases. Keep in mind: you’ll likely need to spend more upfront, so plan accordingly and ensure you’ve got the necessary funds on hand.
Conclusion
While grocery prices are beginning to decrease, it may still take some time before consumers see significant relief. To save on groceries, make the most of store discounts, cashback opportunities, and rebate applications. Employing these strategies will enable you to get what you need without straining your finances.
