You may not realise it but by using the same value investing skills you use to buy stocks to buy groceries, you can save on your weekly shop, meaning you have more money to invest. Here are 4 tips to ensure you never pay more than you need to on your next shop.
1. Do your research and get organised
You research a company thoroughly before buying its stock don’t you? So why not put a little more effort into your weekly shop? It could save you hundreds of dollars this year.
First, develop a meal plan and write your shopping list around it. This will help you avoid impulse buys and avoid wasting money on items you don’t need or will never use.
Second, forget about loyalty. Get familiar with which chains sell the products you want at the most competitive price and spread your shop over multiple supermarket brands. Given that most shopping centres have more than one as tenants, it’s not as time-consuming as it sounds.
2. Forget brands and buy private label
A higher share price isn’t always indicative of a company’s intrinsic value or quality and neither are grocery prices.
Many branded items can easily be switched with lower-priced private-labels. In fact, many private-label products are made by the same people behind your favourite brands anyway. Cows know only one way to make milk and Coles branded cheese comes from the same place as those with a Bega (ASX:BGA) label. Why pay almost double the price for a brand when private label products probably come from the same place anyway?
3. Buy discounted products in bulk
When you spot a bargain on the share market you buy big to take advantage of the cheap price. Adopting the same strategy at your local Coles, Woolworths (ASX:WOW) or Aldi has the same benefits.
And spotting a bargain is now far easier than piling up catalogues in the kitchen. Sites like lasoo.com.au make it easy to find the specials on your shopping list. Many products - BBQ sauce, for example – have a sell buy date years away and are regularly discounted by as much as 50%. Building a stockpile can save valuable time and money.
4. Spot price discrepancies
We tend to rush around supermarkets, especially when Little Timmy throws a tantrum upon seeing the bag of kale chips beneath the grapes in the trolley. This often means we miss many of the subtle tricks that supermarkets and their suppliers use to make us spend more.
Whether it’s charging more for pre-packaged fresh fruit compared to bagging it yourself, hiding lower volume inside packages the same size and price as competitors, or charging more for female branded products compared to almost identical male equivalents, there are plenty of examples where people are spending more than they should.
Be savvy, know the tricks and focus on buying the most value for the cheapest price. Compare unit prices of different brands and even those aimed at a different gender. That female branded razor doesn’t become $2 more expensive because it is pink and lavender scented, so why pay it?
By maximising the value of every dollar you spend in the supermarket you could unlock more cash to invest in companies on our buy list or take little Timmy to Disneyland. He might forgive you for the kale then.
If you have your own shopping tip feel free to list it below.
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