In The News

From The News Tribune (Tacoma, WA):

Bargain Hunters on Aisle 1, Aisle 2, Aisle 3, Aisle 4…
Tough economy pushes up business at discount grocers
By Kelly Kearsley

With two teenagers to feed at home, Misty Daily appreciates a good deal on groceries. The University Place mom pushed a cart full of food through the Tacoma Grocery Outlet store on a recent afternoon as her boyfriend tossed in a $1.79 box of cereal and a three-pack of mayonnaise for $4.

Daily estimates she saves between $50 and $60 per trip by frequenting the discount grocer.

Rising food prices have sent more South Sound shoppers looking for deals.

As a result, local discount and surplus grocery stores have seen a noticeable uptick in business, they say. The stores specialize in selling manufacturers’ surplus food. And if you don’t mind eating cereal with Christmas packaging in June or a bag of chips that’s near its better-if-eaten-by date, then you can save some serious cash.

“We’re seeing a lot more first-time shoppers,” said Lyn Lowe, who owns the Grocery Outlet on Sixth Avenue with her husband, Ken. “There’s more people coming in saying, ‘We’ve got to figure out how to make this budget work.’"

You may not be buying more, but your total grocery bill has likely increased over the past year.

Food prices across the country spiked by more than 4 percent in 2007, the biggest jump in 17 years. And they’re set to escalate another 6 percent in 2008, though some items, including eggs and milk, have gone up much more.

Several factors are driving the price increases, according to Brian Todd, president of The Food Institute, a New Jersey-based food industry information service. High fuel prices make food more expensive to transport, the devalued dollar has ramped up U.S. exports of food, and more of the corn crop is being used to produce ethanol.

“It’s been the perfect storm,” Todd said.

To weather it, shoppers are finding ways to stretch their budget.

For many, that means frequenting grocery stores that specialize in discount or liquidated food.

California-based Grocery Outlet has seen the number of customers grow at its 124 stores and has seen their hauls increase. The latter is likely due to shoppers consolidating grocery trips – going less frequently but buying more stuff – because of high gas prices.

In Tacoma, the Grocery Outlet on Sixth Avenue witnessed record sales last month, Lowe said.

In the parking lot last week, a Mercedes was next to a banged-up Toyota Corolla. Signs outside the store promised bargains: “Shop here to get your arm and leg back after getting gas,” read one. Inside, the aisles brim with an array of brand-name items selling for a fraction of their original price: Two-and-a-half gallon tubs of Haagen-Dazs ice cream for $5.99. Cartons of organic Pacific Natural Foods broth for 99 cents. Bottles of Martinelli’s sparkling cider for $1.49.

Save money by shopping at Grocery Outlet.

The store gets its products through partnerships with food manufacturers.

“Each product has its own story,” said Melissa Porter, Grocery Outlet’s vice president of marketing.

For various reasons, the manufacturers can’t or don’t want to sell the products on traditional grocery store shelves. The packaging, for instance, might be in a different language or related to a movie premiere or particular holiday, Porter said.

Those inexpensive bottles of Martinelli’s on the shelf? The labels were red and green.

“We are opportunistic buyers,” Porter said. “That means there’s going to be mayo in the store, but it might be Hellman’s this week and it might Kraft the next.”

Grocery Outlet isn’t the only store to take advantage of manufacturer deals.

Russell McGregor runs a similar operation, but he focuses on natural and organic products. McGregor’s Natural and Organic Foods is a hole-in-the-wall grocery store on Tacoma’s Pacific Avenue with narrow aisles and one cashier. But for people looking for bargains on organic food, it’s a gold mine.

McGregor buys from food brokers, distributors and manufacturers. Last week, his store was selling four bags of organic potato chips for $1. Bigger grocery stores stocked up on chips for the Memorial Day weekend, then cleared out their excess.

“I look for the deals,” said McGregor, who used to work for liquidation companies. “Because if I don’t have something that I can sell cheaper than anyone else, then they will just go buy it at Marlene’s” Market and Deli.

The stores don’t sell everything. Grocery Outlets carry a bit of produce and dairy, though mostly as a convenience for customers. They obtain those perishable items the same way as any other grocery store and don’t make money on them.

The key, Lowe said, is to shop discount stores for the deals and fill in the missing pieces of your grocery list at a traditional store.

“Once customers understand that’s how it works, it becomes the thrill of the hunt,” she said.

 Ken and Lyn Lowe, owners of the North Tacoma Grocery Outlet.

At many surplus grocery stores, the best deals are found on items that are close to – and sometimes past – the dates printed on their packages. At Sunshine Liquidators on South 12th Street in Tacoma this week, several items were dated for a few months ago, from salad dressing to granola bars.

The Grocery Outlet doesn’t ship food items that are past their dates to its stores, Porter said. And the stores will significantly mark down items that are close to their best-if-used-by dates in order to move them.

But what do all those dates actually mean?

Federal regulations require dating on only infant formula and some baby food. Dates on other food items are applied by manufacturers and can indicate a variety of things, according to the Food and Drug Administration’s Web site.

  • An expiration date indicates the last date a food should be eaten or used. The FDA says that foods purchased or used after the expiration date could contain harmful bacteria or pathogens and may not be safe to eat.
  • A use-by date is the last date recommended for the use of the product while at peak quality. This is the last date a consumer is recommended to use a product while it is at peak quality. This date is recommended for best flavor or quality. It is not a food-safety date.
  • A sell-by date indicates the last day the product can be sold. It tells the retailer how long to display a product and guides the rotation of shelf stock. It allows time for the product to be stored and used at home and is not a food-safety concern.
  • A best-if-used-by date represents the recommended time limit a food should be used within for best flavor or quality. It is also not a safety date.

For McGregor, it comes down to common sense. He might buy or sell a jar of pickles past its best-if-used-by date, because the food is preserved. But he’d be more cautious of other items, like food containing nuts, because they’d be more likely to turn rancid.

Ruby Truax trolls the aisles of Grocery Outlet on a regular basis. She has two young boys at home, including a 9-year-old who is starting to eat more than she does. So Truax finds basics at the outlet store, like canned stewed tomatoes and frozen french fries.

“I like to see what they have on sale, and if I find a good deal, then I stock up,” said Truax, 25.

And while food prices and gas prices are making surplus and discount grocery stores more appealing, Grocery Outlet’s Porter believes there’s an even bigger sociological shift happening right now.

“I think it’s becoming hip to be frugal,” she said. “People are finding it sport to save money.”

How to stretch the food budget
With people’s budgets stressed by $4-per-gallon gas and increasing food prices, The News Tribune asked readers for their tips on saving money on food. Dozens responded via e-mail. Here are excerpts from some of the South Sound’s bargain hunters.

Marion and Morf Morford of Tacoma
The North End Tacoma couple try to stay away from packaged foods, instead eating mostly fresh produce and dried beans and peas. They frequent the Grocery Outlet and McGregor’s Natural Foods, as well as local farmers markets. The two reserve the upscale Metropolitan Market for select items they can’t find anywhere else.

Amy Kliewer of Tacoma
Kliewer learned to shop frugally when her four children lived at home. All but one are now out of the house, but she still hunts for a good bargain. She buys her bread at bakery outlets, and she scans grocery advertisements to find the best deals. She heads to Grocery Outlet on Valentine’s Day and Christmas for fancy chocolates to use as gifts. And she cooks mainly from scratch instead of relying on prepackaged food items.

Robin Echtle of Tacoma
Echtle shops at the Grocery Outlet on a weekly basis. She offered her grocery shopping plan with the advice, “Have a plan, work the plan.”

  1. Review ads in paper.
  2. Cut coupons for the stuff already on the list or on the “stock up when it’s on sale” list.
  3. Visit Grocery Outlet.
  4. Then Fred Meyer.
  5. Then Metropolitan Market, for the stuff no one else carries.

A saavy shopper loads up her car.