Buy basics, learn to cook and move to Arizona or Kentucky
When times are tough, super-markets know vigilant shoppers notice even tiny changes in the price of foods like milk, cereal, bread and cheese. In fact, there are about 500 such products, and stores raise prices on these staples at their own peril.
So how do markets deal with rising food costs? They tinker with the price of the roughly 45,000 items people don’t buy regularly enough to have a fixed idea of their cost—tacking on 3 to 4 percent to specialty products like, say, gourmet pasta sauce or fresh-squeezed juices, without consumers noticing. “There’s an opportunity to make some margin back on those items,” says Jim Hertel, managing partner of Willard Bishop, a consultant for the industry.
But don’t expect the savings to be passed on to you when costs come down. Many manufacturers lock in prices well in advance, and they often hold off on bringing prices back down to make up for the resulting losses, says Howard. One way to be sure you’re getting the best deal when prices drop: Stick to basics. Products like coffee and meat are likely “to reflect their underlying costs more quickly than most other foods,” Howard says.
How can I spend less money on food?
One word: cook.
I can offer no specific advice (buy store-brand cereal, buy vegetables in season) that will take you as far as the general exhortation to cook your own food.
When you eat in a restaurant or buy prepared meals, you are paying for both labor and materials. When you cook, you pay only for materials. The price of your meal is determined not by what the market will bear but by what the ingredients cost. When you cook, you can vary your menu based on what looks best and costs least.
Now, you may not know how to cook, or you may not enjoy cooking. But cooking is not rocket science, and to feed yourself and your family, you don’t need to master more than a dozen recipes and/or techniques. And you can learn to cook from a book.
The 5 percent decline in Arizona prices reported Thursday was substantially more than the 1 percent nationwide drop reported by the American Farm Bureau.
But at $54.75, the cost the 16 food items in Arizona still remains significantly above the national price of $48.19. Murphree said that Arizona prices rose faster than the national average and have taken longer to come down.
Downtown Phoenix resident Mike Butler has noticed the falling prices. He was in Safeway Thursday picking up milk, on sale for $1.58 per gallon.
“They seem to be having a lot more sales lately,” said Butler, who added that he is eating out less as a result of the declining economy.
Besides passing along the lower commodity prices, grocers are feeling increased pressure from consumers and competitors to reduce prices across the board.
“Our customers have become much more price-conscious,” said Kristie Nied, a spokeswoman for Chandler-based supermarket chain Bashas’ Inc. She said that coupon use has increased significantly over the past few months as consumers search for “deals.”
After climbing for a year, Kentucky’s retail food price index fell in the last quarter of 2008, according to Kentucky Farm Bureau’s January marketbasket report.
The 40 food items chosen for the marketbasket cost shoppers an average $111.63, surveyors found, down from a record $114.72 in October.
The latest survey finding was more than $7 above the index for the end of 2007, when the marketbasket average was $104.43, the Kentucky Farm Bureau said in a news release.
According to an American Farm Bureau survey, U.S. grocery prices in the fourth quarter of 2008 were 1 percent lower than the fourth quarter of 2007. For the full year, marketbasket prices were 7 percent higher than 2007, the Kentucky Farm Bureau said in the release.
Although food prices increased in 2008, food costs less in the United States than in other countries, Kentucky Farm Bureau said in the release.
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