I'm saving a fortune on my shopping?

cigarsmoker

Two years ago my wife and I retired, I at 60 my wife at ????. Until then we had not really monitored our supermarket shopping costs, but now having the time, I keep a spreadsheet of our monthly spend by category.

Based on newspaper and TV advertising, posted fliers, plus supermarket shelf talkers (price difference indicators) generally indicating ½ price, massive discounts and etc., etc., I reckon that my supermarket shopping should now be down by about 25% over any previous period in the past two years.

We don’t buy more or less than we usually buy, irrespective of offers, but obviously choose these discounted offers when we would be making these purchases anyway.

So, surprisingly, when compared, our supermarket shopping costs are steadily rising. We shop across various major supermarkets and are currently looking at an increase of almost 10% per annum (excluding alcohol) in normal supermarket costs.

Interestingly, we have recently started shopping for fresh fruit & veg at a local Asian grocery store and have noticed a major saving versus the main supermarkets. Examples are 2 Dutch aubergines costing £1.98 whereas 2 aubergines at the supermarket were £2.00 same quality, but half the SIZE. At the grocer they were charged by the kilo, at the supermarket priced each. Therefore 50% cheaper at the grocer!
Similar with pineapples, melons, pakchoy, cob corn, beans, peas etc., charged by the kilo, or at the supermarket in packs and duo-packs priced per pack.

I just don’t believe most of the advertising claims, and surely the Office of Fair Trading should be looking at this?

MyRubyRed

Well done in reducing your bills/ What do you suggest re OFT?

lilac_lady

Havana cigars for you now that you've saved all that money? :-)

geordie_joe

cigarsmoker wrote: »

I just don’t believe most of the advertising claims, and surely the Office of Fair Trading should be looking at this?

What advertising claims don't you believe?

It's not the OFT that gets involved with advertising, it's the advertising standards authority. They do give advertisers a slap when they mislead the public, and usually have over 2,000 adverts altered or withdrawn each year.

cigarsmoker

Yes, Havana’s would be nice – if I’d made the savings.
I’m not really sure what action should be taken but ‘Which’ a couple of years ago reported that based on its research many supermarkets were misleading the public in terms of price discount claims, also the OFT has made investigations in to ‘price fixing’ between major supermarkets.
The Guardian and the Independent newspapers have also investigated and found ‘cynical manipulation’ of pricing and the ‘Advertising Standards Authority’ of untrue advertising of cheapest supermarket claims.
Apparently the OFT is currently investigating supermarket pricing in a similar way to the work it did in 2006 and expects to report in July – could be interesting reading!
The point is though, when we are all being asked to accept pain for up to 5 years in relation to the national economy, supermarkets – in my opinion – appear to be exempt and are posting record profits.

cigarsmoker

Also, how come corner shops can now offer better pricing on traditional fruit & veg than supermarkets with all the supermarket purchasing power, expertise etc., unless supermarkets are simply ripping off the consumer?

geordie_joe

cigarsmoker wrote: »

I’m not really sure what action should be taken but ‘Which’ a couple of years ago reported that based on its research many supermarkets were misleading the public in terms of price discount claims,

I have no doubt that the supermarkets are misleading the public in their adverts/claims.

cigarsmoker wrote: »

also the OFT has made investigations in to ‘price fixing’ between major supermarkets.

Well lets hope they don't get all the way to court then realise they don't actually have any evidence.

cigarsmoker wrote: »

The Guardian and the Independent newspapers have also investigated and found ‘cynical manipulation’ of pricing and the ‘Advertising Standards Authority’ of untrue advertising of cheapest supermarket claims.

Price manipulation is different to untrue advertising. The OFT investigate price manipulation and the ASA investigate untrue advertising.

cigarsmoker wrote: »

Apparently the OFT is currently investigating supermarket pricing in a similar way to the work it did in 2006 and expects to report in July – could be interesting reading!

Yes, and it could be a laugh for the supermarkets if they forget their evidence again.

cigarsmoker wrote: »

The point is though, when we are all being asked to accept pain for up to 5 years in relation to the national economy, supermarkets – in my opinion – appear to be exempt and are posting record profits.

I think you are being misled by what you read. Take this example. In the following link, the headline reads "Tesco rings up record profits" Then the 2nd paragraph under the photograph says

Britain's biggest retailer posted underlying pre-tax profits of £3.4bn for the 12 months to the end of February, a 10.1% rise on the previous year.

This relates to the 12 months up to Feb this year. But what it doesn't say is that Tesco increased the number of stores it has by around 10% too.

If a supermarket increases the number of supermarkets it owns by 10% you would expect the profits to go up by 10% too. But by leaving out the increase in outlets, employees, customers, sales etc. it makes it look like they made extra profit by charging more for their goods.

There is also the point that people are spending more money on food now that they used to. As people have less money, they have been spending more in the supermarkets. Sounds odd, but I'll give you a simple example.

A couple usually have £50 spare at the end of the month, and spend it on a meal out. Then comes the "credit crunch" and they find they can't afford £50 on a meal each month. This does not mean they don't have all the £50 any more, they may only have £30 spare at the end of the month.

So they decide that is not enough for a meal out. So instead of their meal out they spend the money in the supermarket on a slap up meal, with wine, at home.

So they have gone from spending £50 per month in a restaurant to spending £30 extra in Tesco. They are £20 per month worse off, but Tesco sales have increased by £30 per month.

I expect their are many people who have given up a night at the pub for a night in with supermarket bought booze too. They are spending less, but spending more at the supermarket.

The simple fact is, when money gets tight people look for the cheapest alternative. They stop buying their fags at the local paper shop and walk the extra mile to the supermarket where they are 10p cheaper. They stop ordering takeaway pizzas and buy them from the supermarket. The result is, they spend less, but spend more in the supermarket. So the supermarket profits go up.

geordie_joe

cigarsmoker wrote: »

Also, how come corner shops can now offer better pricing on traditional fruit & veg than supermarkets with all the supermarket purchasing power, expertise etc., unless supermarkets are simply ripping off the consumer?

That's a good point, a few weeks ago I mentioned that my local fruit & veg shop was selling cauliflowers from cornwall for 50p, but Morrisons were selling cauliflowers from cornwall for 87p. Someone said it was because supermarkets set their prices once a week, but the smaller shops can change their prices daily. So obviously the price had dropped and the little local shop was tacking advantage of being able to change it's prices quicker than Morrisons.

This turned out to be tosh, because every day I have looked at them and the little shop has always sold them for 50p and Morrisons have always sold them for 87p.

The difference is, the ones in Morrisons are in a printed plastic bag and are in perfect condition, pure white with no marks or dirt on them. The ones in the little shop are in brown paper bages, and they are battered, marked and dirty.

So I think morrisons are paying more for the better ones. Or what look better, I expect they taste the same.

And to turn your argument around, how come Iceland sell Stardrops for £1 when the little hardware shop down the road sells it for £1.69?

I suspect the reason small fruit and veg shops are cheaper because they have to sell the produce quickly. All the profit they make comes from fruit & veg, so they have to sell it.

A supermarket, on the other hand, makes it's profit from a much larger selection of goods. It is only interested in the total profit it makes, so it can afford to have fruit & veg higher, then sell it cheaper if it is not sold by it's use by date, because it will make the profit up on other things.

cigarsmoker

Interesting and valid points Geordie Joe, however what do you make of the extract from a report in the Telegraph 3 months ago:

Fresh figures published this week suggested the wholesale price of basic food essentials, such as bread and butter, have dropped by almost 50 per cent in recent years.
But these declines have not been translated into lower prices on supermarket shelves, with customers paying higher prices.
Experts criticised supermarkets for being unfair to consumers by raising their prices.
Lee Woodgate, of the National Farmers Union, said: “It’s an unfair situation that has a real impact on consumers. Supermarkets have unwielding power, which is why we need a regulator.”
Dr Tom MacMillan, executive director of the Food Ethics Council, said: “Supermarkets extract high margins because investors demand it and will go elsewhere if they don’t get it.”
The Government proposes introducing a watchdog to settle disputes between supermarkets and suppliers. But many of the supermarkets have resisted the idea of an ombudsman.
Food inflation rose sharply in 2007 and 2008 as the rising price of oil and a series of poor harvests around the world increased food prices.
The worst hit was wheat, which shot up in price after a catastrophic harvest in Australia and other parts of the world. This in turn pushed up the cost of animal feed, causing milk and meat products to rise in price.
But while consumer prices remain high, wholesale prices have since declined, raising questions about whether supermarkets are boosting their profits at the expense of customers.
The wholesale price of butter reached a recent peak of £3,400 per tonne in September 2007, but was just £2,825 this month – a fall of 17 per cent, according to figures from Mintec, a leading commodity research company.
But the average price of a 250g pack of butter rose from 92p to £1.04 over the same period, according to the most recent figures from the Office for National Statistics.
The wholesale price of wheat reached a recent peak of £195.5 in March 2008, but has since dropped to £109 per tonne, a fall of 44 per cent.
But consumers are now paying £1.22 for a loaf of bread compared to £1.12 two years ago.
Charities warned that pensioners are among the most badly affected by the rises as they spend a disproportion among of their income on food.

paulwf

For fresh products in general supermarkets are more expensive and that's the way it has always been. Where supermarkets can really compete is on branded goods where they can cut out any wholesalers and go straight to the manufacturer and demand a hefty discount for stocking their product.

Unfortunately a lot of people only look at the headline offers of branded goods. Many shoppers will also only consider shopping at supermarkets these days, friends look at you oddly if you dare to suggest going to a independent shop to buy anything. Even looking on mysupermarket to get the best price doesn't help, if anything it just cosolidates the choice down to the top 3 or 4 supermarkets instead of encouraging people to look elsewhere.

Unfortunately in areas such as mine the supermarkets have won with their pincer movement of out of town stores followed by in town express stores eliminating the independents. Any greengrocers left are of very poor quality so there is little alternative.

One thing I will say in defence of supermarkets though is when people focus on their large profits bear in mind that their actual profit margins are sometimes tiny (especially on fresh produce, processed food is where they make money), it's just the sheer number of shops that they have that makes them large. Supermarket profit margins on food are probably tighter than for many independents.

chelms38

Keep making the savings,but if you can put it in a savings account and treat yourself to a holiday or something nice for the house that you can both enjoy.If there is something half price I try to save the difference and they all add up.Still on saving money,but changing the subject I bought a set of hair clippers 5 years ago and everytime I use them I put a fiver away and I usually use them every fortnight. :T