Things Your Supermarket Won’t Tell You

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:

  1. “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.
  2. “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.
  3. “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.
  4. “Our stores might make you sick…” Insects, rats, and other vermin are a problem for any place that handles a large quantity of food.
  5. “…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.
  6. “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.
  7. “‘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.”
  8. “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.
  9. “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.
  10. “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.

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frugal
frugal
14 years ago

This is a great summary for all the supermarket tricks that they play on you. My post of
checking your receipts
go over a few other tricks that supermarkets can play on you, such as putting look-alike and more expensive items along with on-sale items.

mapgirl
mapgirl
14 years ago

Great tips. I am in love with the calculator on my cellphone. I broke it out just the other day to unit price between two brands of orange juice on sale. Love, love, love it.

J.D.
J.D.
14 years ago

Heh.

I’ve stood in the peanut butter aisle before, mentally calculating the cost-per-serving on various brands and sizes of peanut butter.

Marco - Stock Trading
Marco - Stock Trading
14 years ago

I was watching a documentary from FrontLine about Walmart this afternoon. They have an interesting system they use to lure customers to buy their expensive items. They have a lead item for a category – say a microwave for $30. Then you say – wow that’s cheap. Then you keep walking. 10 feet later you are in the microwave section looking at the premium brand microwaves that are much more expensive. But you still have the suggestion in your mind that their microwaves were cheap. But according to a former manager there it isn’t the case. Some of those higher… Read more »

Gary Dymock
Gary Dymock
14 years ago

Why not push for better food regs in the US? Here in the UK the major supermarkets – Tesco being one of them, who I gather are expanding in the US – label the shelves with theunit pricing as a matter of course. There are also laws regarding promotions – any price reduction must be backed up by proof that the higher price was genuine and on sale at a given location. Keep an eye on Tesco, if they don’t do those things in the US, demand them, because the store has these practises elsewhere. Once you’ve got Tesco doing… Read more »

cribcage
cribcage
14 years ago

Everything at a grocery store is close to double the price of Walmart or Target. I love this blog and I’m all about financial acuity, but this is the sort of dangerous conclusion reached by the narrow-minded thinking that often goes hand-in-hand with penny pinching. My mother used to buy oversized containers of laundry detergent. I’d explain that I understood smaller containers cost more per ounce but that I didn’t feel it was money wasted. “For my extra 14 cents, I’m buying the ability to lift these smaller bottles of detergent without pulling a muscle.” We had the same discussion… Read more »

Mr. Food Markets
Mr. Food Markets
14 years ago

Thanks for the insights about SM article. Yours is a thought provoking post – but there seems to be somewhat less here than meets the eye. Here’s my take. I guess I fall into the category of someone who shops pretty much in one place (Whole Foods) and am wise to their tricks! I’m not looking forward to the day I get outsmarted by product placements!

pfadfaog
pfadfaog
14 years ago

I’ve heard that grocery stores only make a 3% markup, but I can’t see how that could possibly cover their costs. I also can’t see how that’s true from the standpoint of my involvement with cooperatives that have markups of 20-35% and are still consistently less expensive than the grocery store. Something’s not right.

bill
bill
14 years ago

People that claim that grocery stores only use their “loyalty” cards to send out coupons truly have no clue what they’re talking about. Catalina Marketing in St Pete FL boasts this on their web site:

“In the retail industry, Catalina Marketing retrieves about 250 million transactions per week, across more than 21,000 grocery stores. On behalf of our grocery retail clients, we manage one of the six largest databases in the world, containing the purchase histories of over 100 million household IDs.”

Still think grocery stores aren’t making money by tracking you with those cards?

Spoonman
Spoonman
14 years ago

I second cribcage’s feeling about Walmart. I also add in that the price difference you find at Walmart is lost in the amount of time you spend in line. Even when I do a monthly supermarket trip, I can be in and out in an hour. If I attempt the same thing at Walmart, it takes more than an hour just to get through the line since they never have enough cashiers, prices are always wrong and everyone in line in front of you has to have prices rechecked, and so on and so on. Saving money is great, but… Read more »

rich
rich
14 years ago

I’d take a lot of those Digg comments with a grain of salt. President’s Choice is Loblaws/Superstore’s *high-end* brand; their discount house brand is No-Name. President’s Choice products tend to be a bit more expensive than the big brands but tend to be a bit better quality as well. I don’t understand his point about how the store preferring to sell house brand products means the house brand must be low-quality. It seems to me that they’d prefer to sell house brand because they’re able to pocket all of the profits instead of sharing some with Heinz, and because getting… Read more »

Lazlo
Lazlo
14 years ago

Supermarkets will turn over all the information attached to your loyalty card to the authorities upon request.

One man was convicted of a crime because police used the loyalty card database to show that he was at a certain store at a certain time.

Mary
Mary
13 years ago

Many years ago my Mother told me it is illegal (back in the 70’s) for stores to place a higher price label on items already on the shelves and tagged, and that if you can remove the higher label(s) they have to give you the item for it’s original price as it was tagged based on what they paid for that particular shipment. I recently purchased a package of gum (a 3 pack) that had been $1.99 for soome time, this time it had 2 other tags over the %1.99, a $2.29. and $2.49 which I wound up paying as… Read more »

Honest Abe
Honest Abe
13 years ago

Nice try, Lazlo. Which “one man” and where? You are full of it. Anyone can get a brand loyalty card from ANY store with false information, no ID required. This would never be valid in court.

The information collected is used for demographic information (what do you buy, what will you buy more of).

If you are dumb enough to give them your correct info, they send you coupons based on previous purchases.

Stupid conspiracy theories presented as fact have no place here, only confuse the issue.

Kendra
Kendra
11 years ago

I’m very careful about checking unit prices when I shop, and lucky for me (although everyone else seems to hate it) I’m a picky eater, and shop only for foods I know I will eat, and I don’t buy large quantities if I know they will go bad. I also check what price is being scanned in at the register, and any time I go to a deli/sandwich shop, I make sure that whoever handles my sandwich washes and gloves their hands before handling it. I WILL call them on it if they don’t, and have them remake my food.… Read more »

Toby
Toby
11 years ago

I usually check unit pricing too; is displaying unit pricing some sort of regulation? It seems to be present in all major grocery stores.

Loramir
Loramir
10 years ago

As a grocery store employee: –Definitely do check your receipts or watch prices as items are scanned. Sale items sometimes don’t make it into the system at the right price. Most of the time this is simply human error, not intentionally trying to overcharge you. Usually once the error is pointed out it gets fixed immediately in our system. –Store discount cards CAN save you a LOT of money. My store (Piggly Wiggly, a Southern chain) offers big discounts with our card, especially on meat. If you don’t feel comfortable signing up for one (and we do send out good… Read more »

kim
kim
10 years ago

I third cribcages feelings about walmart. I buy all I can at local grocery stores and avoid walmart as much as I can. My boyfriend works there and so did my mother-they treat their employees horribly. Also-they treat their customers like shoplifters. I constantly see people pulled over at the door after they check out and a walmart employee checking purchases against the receipt. this has also happened to me several times there. My buggy is not searched at other grocery stores. Why are people shopping at a store where everyone is regarded as a shoplifter? I’d rather pay a… Read more »

Life41
Life41
10 years ago

Experience from retail….regardless of the business or the name…what you pay is not the price of value but a over inflated price for ‘SOMEONE’ else’s profit! Simply put, regardless of the feel me good service you may think you are getting. MONEY 101-There is no such entity as a “SALE”, no one is in business to loose money and the ones that are reaping from your purchases, you will never see them or know them personally. You will form a relationship with the cashiers, managers..etc…they are not the money makers. The normal perspective is pay the purchase price all the… Read more »

Robert F. Jaffe
Robert F. Jaffe
10 years ago

The AARP has online groups to help retirees save money. I recently posted an item there that recited what we pay for meat here in Florida. That generated excited posts from all over the country from folks who pay way less than we do. Is there any other central website with boards for exchange of pricing information and other news from sea to shining sea?

Nadine
Nadine
10 years ago

My Mom shops with a pencil in her hand. She crosses off items from her shopping list and writes the price on the item itself. If it rings up with an error at the cashier’s, she can immediately complain and have it corrected. I was buying tea and went back to the aisle to take a picture of the real price to update the cashier once it rang up the wrong price. I really like all the features of modern mobiles – camera and calculator in one piece 😉

Machy
Machy
8 years ago

CHECK your reciepts BEFORE leaving the store! Target stores in Pasco, FL have overcharged our family on six separate items within just two months, especially on so-called “clearance” items.

If you dont catch the fraud within 90 days, you get their standard corporate refund (middle finger). Done with the BullS-eye

Mark
Mark
7 years ago

One Acronym – CDI
Calorie Per Dollar Index

It takes a bit more time, but I write down the prices of everything on my list. When I get to the scanner, if it rings up wrong, I’ll know.

Mark
Mark
7 years ago

Oh and I have an excel spreadsheet I keep a running tab of. I add each product I buy in a column, and across the top I have the store, the date, the price, etc. No matter what store I’m in, I know if it’s a good deal or not.

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