Retirement Income

Thu, 12 Apr, 2018Danielle McCarthy

Why it’s time to start being strategic when you shop

Why it’s time to start being strategic when you shop

The supermarket industry has spent decades and fortunes on refining the psychology of their stores to encourage shoppers to spend more.

Those tricks can include cunning store layouts, subtle labelling devices and even maintaining the optimum temperature to shop in (see illustration).

But an afternoon spent shopping around and a week spent chatting with industry insiders shows there are ways for shoppers to defeat the best ploys of the supermarkets, and use the big stores' strengths to advantage.

Our shop indicated that there were significant savings to be had by taking part of your weekly shop away from the supermarkets a large portion of the fruit, veggie and meat purchases while continuing to rely on them for the tins, jars and "hard" supplies with a long shelf-life.

That's because the supermarkets' margins on goods such as tins of beans, peaches and bags of rice are much thinner than on fresh fruit, veggies and meat, so shoppers spending up on the perishables are effectively subsidising the sale of the hard stuff.

And while there are savings to be had on perishables by doing part of the grocery shop elsewhere, it isn't really possible to find lower prices on hard supplies outside the supermarkets.

The case for shopping elsewhere for fruit and veggies appeared compelling when we did our comparison shopping on Thursday afternoon, but the "specials" on the supermarkets' meat we encountered showed that the careful supermarket shopper with a big freezer could make considerable savings by bulk-buying on special.

The special on the skinless chicken breasts at the Foodtown we visited even beat the Mad Butcher's price.

Our comparison shop also found there is a clear cost to convenience, and brand.

That 2-litre bottle of Anchor blue top milk costs nearly a third more at the service station we visited than at Pak n' Save, and there was an even bigger difference between the cheaper service station brand cost and the cheapest milk at the big yellow store. The difference between the costliest 2-litre blue top and the cheapest was $2, or 66%.

But it also found that simple assumptions were not entirely true such as that smaller supermarkets, which are far more convenient than the big stores to pop into for top-up buys of things like milk and bread, are necessarily more expensive for all items, or that just because two supermarkets have the same name over the door they will charge the same.

Given the barrage of cunning ploys the supermarkets use to get shoppers to spend more than they need, a self-defence strategy with no less care is needed.

Jackie Gower from the Simple Savings thrift club says the first tip is to organise, and that means making a weekly menu plan and shopping to a list. That will make shopping trips more focused, faster and reduce the number of impulse buys.

Select your store, or stores. The big supermarkets are convenient, and there's no way to beat them for staples (unless budget-chain Aldi finally decided to make the leap across the Tasman), but for the price-conscious shopper, spreading your spend between stores means more trips in search of the best deals.

Gower also recommends bulk buying, where possible. When there's a staple you often use, snapping it up when it's on special can be sensible. Pak n' Save had five tins of Oak baked beans for $5 when we visited. If that's a brand you don't mind, loading up is sensible.

A chest freezer is needed for loading up on milk and bread when there are specials, or meat, which is one of those items that has such a high margin for the supermarkets that the "special" price cuts can be huge. Once the specials are taken into account the price of skinless chicken breasts varied at the supermarkets alone between $21.99 and $11.99 per kg. Academic studies indicate that bulk-buying can lead to bulk-eating, which won't disappoint supermarket owners.

To take advantage of the best price specials, it is handy to know what items generally cost. That can mean keeping a simple price book for the things you most commonly buy.

Gower said some Simple Savings club members took the trouble to ask people in the meat and bakery departments of supermarkets when they tended to mark down certain items. They then time their shopping trips to catch them.

For those who truly want to save, and have an adventurous streak and a huge freezer or friends to club together with, there's the option of contacting a wholesale butcher and buying a whole butchered cow or pig, or as is increasingly the trend, start growing fruit and vegetables in the garden.

Tricks of the trade

The stores have many tricks to woo the dollars from out of our pockets, but here are a few of the most ingenious.

Eye-level: Pricier, higher-margin articles are often put at eye level, while the budget ranges tend to be near the top of shelving units, or at your feet.

Product spacing: Milk in the back corner of the supermarket is put there to get you to walk further. Store owners want customers to have to walk the length of the store, past lots of tempting displays, to get to it.

Greens first: Fresh produce like fruit, veg and meat carry some of the stores' highest margins. That's why they are put at the start of your shop, so you don't fill up the trolley with lower-margin items before you get to it. If the placing was done with shoppers in mind, said one former supermarket-chain executive, the soft stuff like fruit would come after the hard stuff like tins so you could put it on top.

Mid-aisle placement: Placing some of the most commonly bought goods in the middle of aisles is designed to make it difficult to nip in and out of an aisle without passing a large number of other items.

End-aisle displays: Suppliers whose products are in end of aisle displays allow the store owner to have a greater margin than usual. There's only one reason for that: these displays work, and often they offer products shoppers don't need.

Labelling: People are easily manipulated by labels. Tell shoppers there is a "limit" of six cans of soup per shopper and they will buy more. Similarly, selling something at "3 for $3" will result in more sales than pricing the same items separately.

What are your thoughts?

Written by Rob Stock. First appeared on Stuff.co.nz.

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