Casual Kitchen’s Core Principles: #5: Understand the True Nature of Grocery Store and Consumer Retailing

This is part five of a six-part series on Casual Kitchen’s core principles. Find the beginning of this series here.

Core Principle #5: Understand the True Nature of Grocery Store and Consumer Retailing

There’s a rhythm to retailing. Everyone knows the cheapest time to buy Christmas cards is right after Christmas. Clothing prices go to extraordinary discounts when retailers misjudge demand. And an excellent time to buy a car is when the dealer wants to move excess inventory.

This same discounting rhythm exists in grocery stores too, with one key wrinkle: food is perishable. This idiosyncrasy makes your local grocery store the source of some of the best values in retail. Sometimes.

An example: think about ground beef approaching its sell-by date. Sell-by dates present enormous problems to retailers: the product rapidly becomes worthless as it reaches that date, and this often drives increasingly aggressive discounting behavior from the grocer. After all, it’s better for them to sell this food at a partial loss rather than throw it away at a total loss.

From the consumer’s standpoint, however, the sell-by date for ground beef means nothing! You can easily freeze this meat and eat it weeks or even months later. And so it goes with many perishable products: an alert, opportunistic consumer can almost always avoid paying full price.

There’s one problem, however. Grocery retailers and consumer products companies also use certain pricing tactics to make you think you’re getting a better deal than you really are. You have to know what an attractive price really is for a given item, or you’ll get fooled into buying products that seem attractively priced but really aren't. And of course if you buy items you don't need just because they’re on sale, it’s a waste of your money no matter how much you "save."

Therefore, you’ll want to have a good working knowledge of the normal cost of the products you buy, so you can instantly recognize--and stock up--when your grocery store offers merchandise at prices well below normal. Which it often will.

Thanks (uh, I think) to my former career on Wall Street, I have a freakish memory for prices. Normal humans, however, might find it more useful to keep a price book to help remember prices for typical, frequently purchased grocery items. It’s surprisingly easy: all you have to do is carry a pocket notebook (or even a simple text file on your smartphone), and each time you shop, just jot down the prices of four or five items. It takes just a few seconds, but in a matter of weeks you’ll have a surprisingly extensive and complete price book.

Then, whenever you see an item priced at what appears to be an attractive level, just check that price against your price book before you buy. You’re now in the enviable position of always knowing when prices are attractive--and when they’re not. This empowers you as a consumer: it makes you informed and prepared for any surprise opportunities.

Let’s move on to the pricing rhythm of fresh produce items, which offers consumers yet more opportunities. Consider another example where the produce department took delivery of far more potatoes than they could normally sell, leading to a buy-one 5lb bag, get-two-free sale to move product. Deals of this sort are surprisingly common in grocery stores, and while they are a boon to value-conscious consumers, they also offer yet another challenge.

Why? Well, produce items spoil too, and unlike our meat example above, many produce items can’t really be frozen without damaging the structure or taste of the food. In order to capture the value of a sale, you’re going to have figure out a way to eat that extra produce... before it rots in your fridge.

But the solution here is also surprisingly easy: bias your upcoming weekly menu towards potato-centered recipes. Recipes here at Casual Kitchen that would fit the bill might include Viennese Potato Soup, Quick Scalloped PotatoesVegan Potato Peanut Curry, or even Tapas-Style Potato Chips.

The nuance here is this: Stay a bit flexible with your menu plan. Tilt your upcoming recipes toward foods that happen to be on sale. This means keeping a relatively small list of easily scalable recipes in your mind (or on your smartphone) that can take advantage of whatever foods are priced most attractively that week.

With dried, canned or non-perishable commodity foods you can compound the value you receive by waiting for sales and stocking up. With these types of foods you don’t have to worry about spoilage, which means over time you can gradually stock a gigantic pantry just by waiting for the very best sales. Best of all, along with saving enormous amounts of money, this process puts you in the enviable position of always having the option to cook from your pantry--which means during some weeks you’ll hardly need to go to the store at all. Result? Still more savings.

A quick tangent: it goes without saying that if you make additional impulse buys along with these steeply discounted food items, you are playing right into the hands of the discounting strategies of the retailer. Retailers typically price certain items as loss-leaders in order to get you in the store in the first place (you’ll often see the word "doorbuster" used for these types of loss-leader sale items). Just remember, there’s no rule that says you have to buy extra, not-on-sale items just because the retailer wants to make more money off you. Buy what you need, take advantage of the doorbuster item, and walk out of the store with a satisfied smile on your face.

Finally, readers, here’s where you’ll begin to find synergies across all of the core principles we’ve discussed so far. If you begin building a moderate sized collection of basic, easy, scalable recipes (none of which contain long, complicated lists of ingredients), built around first order foods and basic produce items, you’ll have a good sense of which recipes can be built around food items that happen to be on sale. Thus, you can let the grocery store’s sale items dictate the bulk of your weekly (or even monthly) menu items. This flexible approach to cooking and shopping can cut your food bill tremendously, while saving you enormous amounts of time and effort.

1) Why Do Products Go On Sale?
2) Retail Industry Ninja Mind Tricks
3) Early Retirement Extreme by Jacob Lund Fisker -- see in particular the section "Limit order price book" and the chapter entitled "Eating."

Next up! Core Principle #6: Be an Empowered Consumer

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