SmartMoney has a list of ten things your supermarket won't tell you. Though this was first published five years ago, it's still informative:
- “We trick you into paying higher prices.” Frugal folk preach “buy in bulk”. But supermarkets have caught on. Now bulk isn't always cheaper. “We found proof at a store near the SmartMoney offices, where a 12-ounce bottle of Aunt Jemima syrup cost $2.09, while a 24-ounce bottle was $4.65; a quart of Lactaid milk was selling for $1.79, while a half-gallon was $3.85.” Always check the unit pricing.
- “Our ‘specials' are anything but.” Some stores raise prices on advertised specials. Coupons are often for more expensive brands. Your best defense: shop at one store and learn its prices.
- “Everybody pays a price for our ‘loyalty' program.” You either pay higher prices by not joining, or you pay with your privacy by signing up. Some experts advise using a fake name when joining these programs.
- “Our stores might make you sick…” Insects, rats, and other vermin are a problem for any place that handles a large quantity of food.
- “…and if they don't, our employees will.” Cleanliness programs cost money. And people are lazy, in the grocery industry just as anywhere else. Surveys have found that nearly half of all deli and meat workers engage in unsafe practices.
- “Federal guidelines? Who cares?” There's no uniform standard for supermarket safety. Some of the guidelines are thirty years old, and there's little enforcement.
- “‘Fresh' is a relative term.” “Except for regulations about baby food and infant formula, there are no federal laws mandating product dating. In most states a retailer may legally sell foods beyond the date on the package as long as the product can be considered unspoiled and safe to eat. Even repackaging is legal.”
- “We like to play head games.” Remember my review of Why We Buy? Supermarkets use many subtle ploys to get you to buy more than you plan. Sometimes not even shopping with a list will save you.
- “Our product offerings are rigged.” Supermarkets make more profits from manufacturers than from consumers. Manufacturers pay “slotting fees” to have their products placed in desirable locations. Supermarkets say these fees keep costs low for customers, but the manufacturers say the fees result in increased wholesale prices.
- “Our scanners are a scam.” You're overcharged more than you think. “Over the course of one year, [one man] patronized California supermarkets that give customers an item for free if the scanner rings up the wrong price. By year's end, he says, he took home more than $4,000 in free good…”
More insider info on grocery stores
This article was posted at Digg, where the members have shared some great comments. Here are some of the best.
One supermarket employee notes:
There's no privacy risk with loyalty programs. At the store I work at, your address is only used to send you thank-you coupons and crap from us, and your phone number is only used to look up your card in our system should you forget to bring it.
Which is backed up by another commenter:
I worked in the Marketing department for a large supermarket for several years. I can tell you unequivocally that the loyalty card programs are there for the supermarket to maintain their margins (which are the lowest of all retail formats, usually less than 3% markup on almost anything). Yes they also get quite a cost savings by selling the data to advertising companies, but the general gist is so that they can spend less on advertising and send pertinent deals specifically to you (micromarketing at its best). As a general rule, all supermarkets are run on the cheap, and are always looking to save a buck. The neat thing is that many are moving towards a personalized email/circular idea that offers items YOU buy when they are on sale, saving you time and effort.
Some commenters offer gross anecdotes:
This is a true story, it's also why any meat I buy comes from a professional, independent butcher: A year ago a local supermarket got fined for having a legally blind guy working at the head of the meat dept. He didn't even see the flies buzzing around and shit unless customers complained. Apparently couldn't smell either. And the supermarket didn't even fire him, they transfered him to another store.
The most disturbing thing I know about supermarkets are the chickens they sell. You know that chicken you buy for cheap? The reason its so cheap is because its mass-produced in chicken factories…usually you can see the marks on the chickens. They're called “hock burns” and are caused by acidic conditions from the waste(shit and such).
Others discuss esoteric points like slotting fees:
Adding my two cents about the slotting fee point:
Not only this is true, but the most expensive shelve to “get” for the companies is the one easily accessed. For example, notice how often the well-known brand of ketchup is located near the bottom, and some no-name ketchup brand is near the eye level.
Furthermore, I dont know about the US, but here in Canada there is an invasion of grocery store's own brands on the shelves. For example, Loblaws/Provigo owns a series of products called “President's Choice”, which mimicks the well-known brands using usually cheaper ingredients, or just using batches that didnt fully pass the QA test.
What you may not know about this: the grocery stores are paid back by the grocery's headquarters depending on how much this self-owned brand sells.
To sum up: not only that store's brand is usually cheaper for the customer, but the local store are being paid to put it on the shelves. Makes you wonder how really cheap/bad quality those products can be!
This commenter has some interesting observations:
I was in the grocery business for a long time. I think the busier stores are usually the best for freshness. Canned goods hardly ever get rotated so some of those in the back are pretty damn old but most things last a real long time in those cans.
A few more interesting things: I've seen very few bad produce isles. The stores know that if it looks bad it won't sell. When you walk by the seafood counter it shouldn't smell like fish.
The big money is made in the surrounding departments like the Bakery, Meat, Pharmacy, Frozen Food Aisles, etc. The main aisles are less then 3% profit margin. There are a lot of items they actually lose money on. For example, Miracle Whip, Velveeta, etc seem to be popular ones. These are loss leaders. And they are usually items people seem to remember the price of.
One fellow says that many of the items on the list are true, at least at his store:
As a current employee of Safeway, I can tell you that a lot of these things are true. I am a cashier that works graveyard stocking shelfs and doing price changes. Since I have started changing prices i have noticed a lot of tricks that Safeway uses.
1. The sale price can only be .50 less the the full price. sometimes its more.
2. Everything at a grocery store is close to double the price of Walmart or Target.
3. I have seen the actual price go up to make you think your saving money with the sale. (Safeway brand sodas use to be on sale for $1.00 full price was $1.19 for a six-pack now they are 1.49 and they are on sale for 1.25.)
As far as dates go, as a shelf stocker, we dont have enough time to pull everything off the shelf and check the dates. a lot of the time the stuff in the front gets pushed to that back of the shelf. which means the stuff in the back could be expired.
Please note that I'm no alarmist about grocery stores. I don't think they're evil. The original article made some interesting points that could help people save money, so I posted a summary.
Author: J.D. Roth
In 2006, J.D. founded Get Rich Slowly to document his quest to get out of debt. Over time, he learned how to save and how to invest. Today, he's managed to reach early retirement! He wants to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you reach your goals.