Amid grocery inflation, extra consumers are turning to greenback shops for groceries
A man looks at frozen foods for sale at a Dollar store in Alhambra, California on August 23, 2022.
Frederic J Brown | AFP | Getty Images
Among all the rising costs, the sky-high grocery bills were particularly painful.
Although the consumer price index, a measure of inflation that measures the cost of a broad basket of goods and services, began to ease since last reading, food prices have risen again, the US Labor Department reported.
Over the past year, food prices have risen by more than 10% overall. Egg prices alone are up 60% by December, butter is up more than 31% and lettuce is up 25%, according to Labor Department data.
As a result, consumers are looking for any – and all – ways to save. For some, that means shopping at their local dollar store.
Dollar stores attract more grocery shoppers
According to a recent report by Coresight Research, discounters’ share of total grocery spending has slowly but surely increased. According to Coresight’s weekly US Consumer Tracker, more than one in five consumers already buys groceries from dollar stores.
A separate study published in the American Journal of Public Health also found that dollar stores were the fastest growing grocery retailers, in part because they are expanding at an unmatched pace, particularly in rural areas.
More from Personal Finance:
64% of Americans live paycheck to paycheck
Almost half of Americans believe we’re already in a recession
Why inflation skyrocketed by 10 items in 2022
To lure shoppers, the country’s category giants – Dollar General And money treeowned by Family Dollar — have added and remodeled stores with more refrigeration units and expanded grocery offerings, including healthier foods and fresh produce, according to the Coresight report.
“If the two retailers continue to improve the quality of their fresh groceries while maintaining the low prices associated with their brands, there is a high chance that they will strengthen their value proposition to their existing customer base and also attract new customers from higher-priced retailers,” states in the report.
“It’s about taking your dollar a little further”
Today, shoppers are considering alternatives, especially when it means better prices, said Julie Ramhold, consumer analyst at DealNews. “It’s about getting your dollar a little further.”
However, the value isn’t always there, she added. Despite the name, “you’ll have a hard time finding items that cost as little as a dollar.” It is important to check the unit price and compare it with offers from other stores, including Walmart and Trader Joe’s, Ramhold said.
In addition, the range of groceries will still be smaller than in a supermarket or warehouse club. For example, fruit and vegetable choices could be limited to more durable offerings like pre-packaged salad mixes and bananas, Ramhold said.
Additionally, when sales are lower, you are more likely to find items near their expiration date. “It’s important to check the sell-by date,” she warned.
To that end, Ramhold advises shoppers to focus on staples like rice, pasta, and dried beans, which can also be tailored to different cuisines and don’t cost much.
(“The Dollar Store Cookbook,” available on Amazon, has recipes mostly limited to such pantry-stable ingredients, including Cream of Tuna on Toast with Canned Tuna and Cream of Celery Soup.)
The best tips for saving on groceries
As grocery inflation continues, savings experts share their top tips for spending less on groceries, no matter where you shop.
- Scrutinize sales. Generics can be 10% to 30% cheaper than their “premium” counterparts and just as good — but that’s not always the case. Name brands may currently be offering bigger than usual discounts to maintain loyalty. Therefore, it is important to check prices.
- Plan your meals. When you plan your meals in advance, you’re more likely to buy only the things you need, said Lisa Thompson, savings expert at Coupons.com. If planning isn’t your thing, at least go shopping with a rough idea of what you’ll be cooking in the coming week to stay on track and avoid impulse buying, she added.
- Buy in bulk. For the rest of the items on your list, you can save more by buying in bulk. Joining a wholesale club like Costco, Sam’s Club, or BJ’s will often give you the best per-unit price for condiments and durable goods. Then keep your pantry organized, with foods that are nearing their use-by dates so you know to cook or consume them before they go bad, advises consumer savings expert Andrea Woroch.
- Use a cash back app. According to Ramhold, Ibotta and Checkout 51 are two of the most popular apps for making money back in stores. The average Ibotta user makes between $10 and $20 a month, but more active users can earn as much as $100 to $300 a month, a spokesperson told CNBC.
- Pay with the right card. While you can earn 2% with a generic cash back card like the Citi Double Cash Card, there are specialty grocery rewards cards that can earn you up to 6% back at supermarkets nationwide, such as the Citi Double Cash Card. B. the Blue Cash Preferred Card from American Express. CNBC’s Select has a full round-up of the best cards for grocery shopping, along with APRs and annual fees.
Subscribe to CNBC on YouTube.