Balance between Health, Money, and Time at the Supermarket

[EdithKeeler]

Gonna have to call that one out. Aldi has pretty fantastic stuff at least here where I am.

Big Aldi fan here. Their produce was better when i lived in Texas--closer to the source, I think--but it's still pretty decent here for most things that I use regularly--carrots, onions, cabbage, celery, and their peppers are always really nice and cheap at my location. Other stuff is generally good--I've noticed some improvement lately, so they may have a new supplier or something. Aldi is at least the same price in my area for meat, but I have figured out when they mark it down and have nabbed some great deals on things like pork tenderloin.

I read a blog not too long ago where she did an experiment with food prices and found Aldi's prices to be 41% cheaper than the local supermarket (which is usually what Aldi advertises), and about 20% cheaper than Wal-mart. Great prices on processed foods and canned foods. I don't buy a lot of processed stuff, but I do buy "meal helpers" for my mom, like stuffed shells, things like that, and they are very good. Aldi also finally has whole wheat pasta, which made me happy to see--I wish they'd get a few more whole wheat bread choices, but I suspect it's coming.

I also like the fact that I don't have to wander around a bunch of stuff I'm not interested in--electronics, clothes--or have to choose between 47 brand of pretty much identical cereal or whatever. I do shop at the regular grocery, but I'm happy to pay that quarter to rent my cart.

[fips]

I think shopping and cooking can be overwhelming when people don't have a meal plan or know how to cook a few basic things.

Accurate. And simply getting started with whatever small steps is keeping people from implementing a good routine as well.

[Clarice]

I also like the fact that I don't have to wander around a bunch of stuff I'm not interested in--electronics, clothes-

Agree! That was what bothered me at Costco. I felt that visits to Costco just increased our family's level of consumption, so I quit despite liking many things about it.

Also, would any of you like to sound off on the subject of organic vs. non-organic? I think this is complicated. Is made in China organic produce good? Is grown in Texas organic rice good? What is better, non-organic pasta DeCecco made in Italy or organic pasta made in USA (someone here has a strong opinion about this )? Also, my understanding is that when you buy organic tropical fruits, organic onions, garlic, olives, and many other things you are paying for the process of certification and that's all as the pesticides are not used on these foods. If you buy certified organic at farmer's markets you are just favoring the big guys who have the money to go through a bureaucratic process of certification. Has "Organic" become a big business and lost its original meaning? Is it now "Buyer beware" as everything else?

[Seppia]

The simple answer to the organic / non organic debate is

On average, organic product are of better quality than non organic ones, but there are so many other variables that "shopping organic" isn't at all a guarantee of quality and/or better taste

[jacob]

I think it's simple for anyone who doesn't eat more than enough vegetables already (myself included)... buy more inorganic because it's cheaper ... but for those who already eats tons of vegetables and can afford it, switch to organic or better, start growing some or all yourself. Quantity over quality and change once you max out. That goes for buying as well as growing.

[distracted_at_work]

When I was a kid I had a part time job (2 shifts/week) at an organic grocery store to pay for a school trip. It saved my entire family 25% on organic food and I got to take home anything expired for free. I have actually considered doing this as part of my ERE.

[Clarice]

@jacob - Wouldn't you be concerned that spinach, celery, tomatoes, bell peppers, and potatoes are on 2017 "dirty dozen" list and prioritize it above the price/lb?

[jacob]

Not as long as the alternative is non-vegetables like meat or rice or beans.

Note that I don't optimize this too much. I only pay Pareto level attention to this dimension.

[Chris]

Wouldn't you be concerned that spinach, celery, tomatoes, bell peppers, and potatoes are on 2017 "dirty dozen" list and prioritize it above the price/lb?

In defense of spinach

The "dirty dozen" list is based on the amount of trace pesticides per pound. I eat what most normals would consider a lot of fresh spinach, and it only totals about 14oz per week. I likes me spinach.

And just because it's organic doesn't mean there isn't poison sprayed on it.

[conwy]

Does Costco sell fresh vegetables?

[Family father]

For my American friends: Costco is by a mile the best place to shop for food. The reason is very simple: they have the lowest percentage margins of all retail chains.
I know for a fact that up until 3 years ago (I would be surprised if it's not the case anymore) margins on their dry foods (pasta, oil, rice, etc) were a flat 13%.
Other retailers vary by item, but a good guesstimate is 20-30% for Walmart, 40-50% for Whole Foods, and 30-40% for most chains.

Amazing data, Seppia!

I'd love to know that for the spanish food retailers!!

When I was a kid I had a part time job (2 shifts/week) at an organic grocery store to pay for a school trip. It saved my entire family 25% on organic food and I got to take home anything expired for free. I have actually considered doing this as part of my ERE.

This looks like a great idea: it was kind of standard procedure in the small supermarkets when I was young, I wonder which are the policies about that for retailers nowadays...

I think avoiding eating out/fast food is the biggest cost-saver, so while bulk purchasing may cost more pound per pound for some items, if it keeps your pantry full so you aren't tempted to eat out, then it's a win.

Yep. that's where I am now

I don't skimp on the quality of ingredients but I also don't feel like every item is a necessity just because it's healthy (like avocados when you live in the northeast). I try very hard to avoid recipes with special ingredients like that. I view them as treats, not staples. I try things, but my regular list isn't full of expensive items or ones that are hard to get locally. I'm not completely rigid about it though --I treated myself to some mace for christmas and I'm having fun experimenting with it.

Here's a (US) guide to what's in season by month and state. Use it as a guide to what shop for ... buying in season is always better.

I like this approach: if you buy seasonal, you get better quality-cost relation...

[Seppia]

Does Costco sell fresh vegetables?

Yes they do

For my American friends: Costco is by a mile the best place to shop for food. The reason is very simple: they have the lowest percentage margins of all retail chains.
I know for a fact that up until 3 years ago (I would be surprised if it's not the case anymore) margins on their dry foods (pasta, oil, rice, etc) were a flat 13%.
Other retailers vary by item, but a good guesstimate is 20-30% for Walmart, 40-50% for Whole Foods, and 30-40% for most chains.

Amazing data, Seppia!

I'd love to know that for the spanish food retailers!!

Thanks.
In Spain there is no exceptional case such as Costco*, but Mercadona is the one with the lowest margins together with the discounters.

*Costco is really, really unique in retail. Aside from Amazon, I cannot think of a retailer that is equally unique

[Family father]

@Seppia

Thanks!!!

You are a well of wisdom!!

[Seppia]

Some more info on the Costco / Aldi debate:

I don't like to sound like a dick, so sorry in advance if this sounds arrogant, I am really writing this in the interest of the community (because of my job, I think I have good reason to believe my knowledge of the food business and of the large retail chains is in the 99.99th percentile).

My point is that Costco provides the best value for money to the consumer because the margins are WAY smaller (in the aggregate) than any other retailer.
This does not mean they are always the cheapest, nor that they are the cheapest.
Costco quality is also very much above average, and quality has a cost.

As I stated in a prior post I know for a fact that up until 3 years ago (don't think this has changed) they put a flat 13% on dry grocery items (pasta, rice, oil, canned tomatoes etc). This is about half the margins of next cheapest (20-30% depending on the items).

They can do this because they have a completely different business model.
To keep things short (EDIT: well, not too short) the main differences are:

1- they have way, way less skus per type of item. Whole Foods, Shoprite and the likes will offer 10 different brands of pasta, times many skus.
In costco usually you can buy very few brands (often a private label and a brand), and for each brand the selection of skus is 4-5 tops: they are very efficient.
2- their customers buy in bulk, and they buy a lot of stuff: the average ticket is multiples of what it is at a regular retailer.
3- their customers pay a fee to access the stores: they are very loyal.

the above create a specific set of advantages that allow costco to work with the already mentioned much smaller margins.

I think we can all agree that the least margins are put on top of products, the better value for money the consumer gets.

1- allows them to negotiate prices better than anybody else because, for any given product category/segment, there's less suppliers to share the huge pie of Costco volumes (sometimes only one, as the brand supplier will also make the Kirkland product) - keep in mind Costco is #2 worldwide after walmart.

1- also allows them much greater efficiency. less waste = less costs.
People always bitch about how overpriced Whole Foods is (it usually is), but there's a cost in having three times the skus per square feet than the average retailer, there's a cost having more clerks, there's a cost having those ultra nice shelves and freshly prepred food.
Costco receives merchandise on a standardized pallet, and has specific packaging requirements that mandate that the only manipulations they have to do in store are 1) bring pallet in the dedicated spot and 2) remove a slip cover

2- allows them to distribute all fixed costs on a bigger volume, hence reducing the per-unit impact.
Any store needs to make X amount of money per day to be profitable, let's say it's $1000.
They can make those $1000 putting 20% margin on $5000 of daily sales or they can make the same $1000 putting 5% on $20000 of daily sales

3- locks customers in, it's kinda like a sort of amazon prime. they paid the fee so they feel obliged to always shop at Costco.
it also allows Costco to sell them a lot more ancillary services compared to the standard retailer.
The card allows Costco to also have unparalleled (except for online retailers) knowledge of the shopping habits of ALL cusomers, to be used for targeting and other stuff

The discounters such as Aldi or Lidl reduce costs and margins with efficiency, as they also tend to carry less skus compared to the average retailer, but they are not as efficient as costco, because they lack the huge volumes (they do not have the same bargaining power with suppliers, and they dont have the same massive volumes per store to spread their fixed costs on), they don't sell them "extra stuff" and they cannot target them as well.

some additional points:

- the above is valid in the aggregate: traditional retailers will have loss leaders, and I'm sure costco gets occasionally ripped off by a few suppliers, so, some specific items may be a better value for money elsewhere.

- Discounters have very little interest for quality, except for tactical reasons*. So they can often be cheaper than Costco. If a 25 year old Yugo is sold 20% cheaper than a new BMW doesn't mean it's better value though.

*Some of the tactical reasons may include a) getting some name brand and selling it at zero margin to instill the idea that "discounter X also has brands and has them cheaper than anybody else! they MUST be the best place to shop", and b) having a decent fresh grocery aisle (also run at a loss or zero profit) to give the idea that "they have quality stuff".

[Clarice]

@Seppia - thank you! I do believe that the perception of an industry insider is the most accurate. The trick is not to buy stuff that I won't use while there )

[Riggerjack]

As a regular Costco shopper, I'll back everything seppia says about them. Our shopping is done at Costco for most everything, then fruitstands for the minor veggies. I don't buy onions or potatoes from Costco, I just can't get through them fast enough to justify the large quantities, but most of my veggies are from Costco, and that won't change until I start growing them myself.

Most of what comes into my house comes from Costco or the internet. We don't have an Aldi's on the west coast, but we do have discount grocery stores. The produce is similar, as is the price. Everything else is much better quality on average. The difference is so clear, consumers tend to just trust Costco to find a good compromise between price and quality, and not put any comparison shopping in for many purchases. It's common to hear a variation on "I just got a new big screen TV. Where? Costco, 80 inches! Oh, sounds spendy. Not really, just $XXX, I was buying some socks, and saw that, and just bought it! Was that a good price? I didn't check, I was at Costco, so probably..." So there is clearly a hazard to shopping there, but that's a self control issue, not a quality issue.

As to organic, it's been a few years, but when last I looked into this, it's all the same agricultural practices, but some folks are willing to pay big bucks for certificates, to massively mark up organics to suckers. Using approved pesticides isn't a big deal, but the time/hassle to achieve the certs is the reason most farmers don't get them. And farmers are very aware that the price differential of organics is temporary. The ones I asked basically said that they had missed that boat, and anyone getting in late will get killed. The higher costs, plus more losses, meet the lower prices as more farmers get certified.

Non GMO is a variation on the same theme with even less going for it. There are 14 genetically modified foodstuffs per USDA, and thousands of "non GMO" foodstuffs. Do your own math there.

[Clarice]

I've found this discussion very helpful and convincing - I've reinstated my Costco membership. I will have to focus on groceries there and steer clear from other departments.

[Kriegsspiel]

Seppia, can you explain the basis on which you're judging the quality of the items at the different stores? Are you going with an eyeball test, sourcing knowledge, something else?

[Fish]

I think Seppia's making a mathematical argument here? Though having compared food from Costco with normal grocery food in my area, it does seem to be a better value overall. It was stated somewhat axiomatically:

I think we can all agree that the least margins are put on top of products, the better value for money the consumer gets.

Price (to consumer) = Cost (to retailer) * (1 + Margin)
Quality is assumed to be directly proportional to cost, then this becomes something like:

Price = Quality * (1 + Margin) , which rearranges to: Quality = Price / (1 + Margin)
Or one can also think of it as: Value = (Quality / Price) = 1 / (1 + Margin)

Then for two similar items at identical price points, the retailer with the lowest margins has the highest quality product. Note that the best deals are supermarket loss leaders (Margin < 0).

I mostly use a traffic light system to control the cost of food:
1. Green <$2/lb - these are my staples, e.g., organic potatoes, organic carrots, rice, organic drumsticks at Trader Joe's;
2. Yellow $2-4/lb - I still buy these foods frequently, e.g., organic beans, DeCecco pasta, canned wild salmon, Meyer lemons.
4. Red $4-6/lb - I buy these foods less frequently, e.g., bacon at Trader Joe's, organic or grass-fed butter, cheese.

This is a really nice system Clarice! Simple and effective. Assuming prices are semi-stable then the categorization can be done once and shopping can be done from memory. Jacob's "limit order" price book idea results in better deals but requires some effort to track prices.

[Seppia]

Seppia, can you explain the basis on which you're judging the quality of the items at the different stores? Are you going with an eyeball test, sourcing knowledge, something else?

Few reasons:
First, I have direct knowledge of their product selection process (PM if you want more details).
They are among the very few retailers that put quality first: if your product isn't "good" (defined part subjectively, part objectively - ingredient list, production process, heritage, panel tests etc) it won't be in their stores, no matter the price.
Second, I have worked in some form in the food business for around 23 years*.
For this reason I know many suppliers (who makes the good stuff, who makes shit, etc), I have lots of contacts in the food world and can recognize food quality easier than most because of experience.

*9 in a restaurant (weekends only + school holidays) starting when I was very young (6 of which in the kitchen starting as potato peeler and ending as a sous chef) and 14 in sales, both in foodservice and retail, in europe and north america.

@Fish: just to nitpick

Margin 13% means that when a product is sold for $100, the margin of the retailer is $13. So if you wanted to calculate their shelf price based on their sourcing price the equation would be
Retail price = Cost / (1 - margin)

What you are describing is called "markup"
Retail Price = Cost * (1 + markup)

Small technicality but it can make a big difference at higher margins (ie 50% margin = 100% markup)