How an Old-School Grocery Price Book Can Save You Hundreds
by Gary Foreman
If you aren’t using a price book when you food shop, you’re likely missing out on some savings. We explore how an old-school grocery price book can save you hundreds.
A grocery price book is one of the most valuable tools you have in saving money. And one of the easiest and cheapest to use.
Your food budget is a great place to cut spending. Unlike some other areas (housing, transportation), you can make changes without making significant adjustments in your life. You can do some small things that will add up over time.
The savings can be substantial. If you’re like the average family, you were spending about $412 per month on groceries before inflation drove prices up this year. You’re probably either paying more than that now or not getting as much for your $412.
One easy way to stay on top of which foods are experiencing the biggest price increases and which are the best buys is by using a grocery price book. A price book may be an old-school tool but it is still very effective in helping you find savings on your grocery bill.
How does a price book work?
To see how it works, let’s look over the shoulder of a professional purchasing agent. They work for a company that will spend over $10 million every year. And the buyer is measured in large part by how much money they can save the company through lower prices. So how do they do it?
First, they know when they’ll need more of a given item. It may be this month or next, but they know when more is required. It’s important not to run out. That puts them in a situation where getting a reasonable price is not the primary goal. Getting some “now” is more important than price. Our buyer knows that’s an excellent way to waste money.
They keep a ‘buy history’ for each item they buy. It may be on index cards or even on the computer. But no self-respecting buyer will work without it. Why? The answer is simple. A buy history gives the purchasing agent a fantastic tool to save money and make good decisions. The history will tell when, where, how many, and at what price the item was purchased. It may even include information from when the price was checked, but the item wasn’t bought.
At a glance, the buyer can tell how many they buy at a time. He knows if the price has been going up or down. Is it time to check the price at a different supplier? Is there a good time of the year or month to buy the item? Do you save money with larger quantities?
Armed with that information, the purchasing agent will do their shopping. They can quickly spot a good deal. Sometimes the price will cause them to ‘stock up.’ Because they know what they have been using and what they expect to use, it’s easy to decide how much they want to buy. Conversely, they can tell when it’s best to buy the minimum amount because the price is too high.
Another advantage is that they can benefit from seasonal savings even if they don’t need an item now. If an item is cheapest in September and they always buy in November, it’s a good idea to buy early.
Setting up a price book
What does all of that have to do with a price book you can use to save money? Everything! The price book is just a homegrown version of the purchasing agent’s buy history. And your menu plan is like their forecast. It’s a little less formal but contains all the same elements.
In its simplest form, an old-school price book is usually either a spiral or loose-leaf notebook. It can be 5 x 7, 8 1/2 x 11, or any other size that’s convenient for you. The idea is to have something that you can take with you when grocery shopping.
You want to divide it into parts roughly equal to the store’s sections—meats, dairy, beverages, cereals, etc. Make the categories suit your preferences. The goal is to easily find an item in your book with a minimum of effort while you’re in the store.
Each item that you regularly use at home will have its own page. On that page, you’ll have a record that’s just like the buyer’s history. You’ll list the date, store, size, and unit price. If something is interesting about a price, enter it even if you don’t buy the item.
It won’t take long to have a good idea of what each item should cost. You’ll begin to spot trends in pricing. If you shop at more than one store (and you should), you’ll see that some items are cheaper in one store while others are best bought at a different market. And your information will get better with age. The longer you keep a price book, the easier it will be to spot trends and bargains.
You’ll quickly be able to distinguish the actual sales from those that are more headline than savings. But you’ll also know when you’re looking at a real bargain and be able to make a ‘stock up’ decision on the spot. Having a menu plan will also help you ‘forecast’ your usage of an item. (See also: How to Read Your Grocery Ad Like an Insider.)
Many shoppers keep a cheap calculator with their book or at least make sure to have a calculator app handy on their phone. It allows them to compare prices on a per-unit basis. I don’t know about you, but I never learned to multiply or divide by 16 in my head!
OK, so it’s simple and inexpensive. What’s the payback?
Well, some claim savings of 30% after they’ve been using the system for a while. That seems a bit much, so let’s just say you save half of that, or 15%, on your bill. If you are that typical family that was spending $412 per month, you could save $62 per month on groceries, or about $742 per year.
Even if your inflationary food bills are closer to $500 or $600 per month and you’re not seeing significant savings on too many products right now in your area, a price book can still help you track the foods your family eats most often.
That’s not too bad for an investment in a $3 notebook!
Reviewed October 2022
About the Author
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.
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