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Grocery stores are designed for profit, not savings

Like veggies and like saving money? Buy a bag of whole carrots and cut them yourself.

Associated Press

Like veggies and like saving money? Buy a bag of whole carrots and cut them yourself.

SAN FRANCISCO — If you ever leave the grocery store with a slight sense of bewilderment at what you've just bought, you are not alone.

Despite the utilitarian look of most grocers' shelves, careful science goes into deciding how to display the thousands of items each store carries and how to make them appeal to consumers.

Marketers tug shoppers toward items they did not intend to buy (thus the bewilderment) with package design, shelf placement, tie-ins and temporary price cuts.

"You can call it exploitation or you can call it savvy marketing," says Tod Marks, a senior editor at Consumer Reports who is known as Tightwad Tod on his blog at blogs.consumer reports.org/money/tightwad_tod.

Kit Yarrow, a consumer psychologist who teaches at Golden Gate University, said marketers have put more thought into grocery stores than any other type of store because they see an opportunity in the monotony of shopping for necessities.

"It is really a blind spot for most people once they get into the grocery store because it's a very habituated activity for them," Yarrow said. "It's also relatively boring so they don't want to put in as much thought as they put into a new handbag or a new suit.

"There's not much that happens by accident in there," Yarrow added.

For a bundle of 30 products that would cost an "impulsive" shopper $288 — including three packs of 30 diapers each for $36.63 — Marks and his team found a "savvy" shopper would pay just $166 at the same grocery store. In addition to guarding against marketing ploys, the savvy consumer tracked down coupons, used a store bonus card and chose the most economical sizes, including a pack of 100 diapers for $21.49.

What to watch for the next time you head out for groceries.

End of the aisle: Marketers pay grocers dearly to put their wares on the prominent shelves at the end of each aisle because products there can sell 30 percent more than those on other shelves, even when the item is cheaper elsewhere in the store, Marks said. Shoppers see so-called end-caps more easily and sometimes mistakenly assume they hold hidden deals or clearance items. "The best thing is not to buy on impulse," Marks said.

Eye level, eyes open: Grocers and marketers know shoppers look straight ahead or, at most, from side to side, as they shop. So products on shelves at eye level often cost more than their lower-shelf siblings (or even items slightly higher).

More can be less: Marks' team found that one in four times a smaller version of a product was cheaper per ounce or pound or serving or other "unit." So check the unit price instead of assuming that bigger means cheaper.

DIY carrot sticks: Cut-up fruits, vegetables and cheese cater to shoppers who want to pry open a plastic bag instead of hunching over a cutting board, but that convenience can be pricey. "You have to really ask yourself, 'Is it worth it?' " Marks said. Consumer Reports found that 6 ounces of preshredded carrots selling for $1.50 cost five times more than a comparable handful of whole carrots.

Don't pick their number: Be wary of suggestions from marketers, especially the buy-five-for-$5 type. You usually don't have to buy all five to get the promotional price, but people often do, either because they think they have to or because they feel like they'll save more.

That one last thing: The items in the display by the cash register are always marked up, whether they're toothbrushes, bandages, candy or toys. Avoid them.

Remember the tried and true: Marks also suggests buying store brands, which can be even more economical than shopping at warehouse clubs; Consumer Reports' 30-item bundle cost $154 when it included as many store brands as possible and $156 at a warehouse club.

He concludes with a recommendation that can save time as well as money:

"I hate to say it because it sounds idiotic, but make a list and stick to it."

Grocery stores are designed for profit, not savings 11/19/09 [Last modified: Thursday, November 19, 2009 3:02pm]

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