According to the Bureau of Labor Statistics, the cost of groceries has increased by 20 percent over the past decade. In many areas, they’ve increased by 10 percent in just the past year. The most expensive items are meats and dairy products, as they are more difficult to produce and require more transportation and steps to get from farm to table.
Is there any chance prices will go down? In spite of the unlikely possibility of a complete drop in prices across the board, there are some ways prices may fall.
Supply Chain Improvements
Supply chains include many different types of businesses. There are companies that grow and process food, such as farmers and meat processors. There are packaging manufacturers, such as paperboard mills, who make boxes for shipping food from farms or processing plants to stores. Then there are transportation companies that transport food from farms or processing plants to distribution centers where it is stored until it is sent out for sale in grocery stores across the country—or even around the world. Finally, there is the store or market where the final product is purchased.
With so many people involved in the process of getting food to the dinner table, it isn’t hard to see how costs start to add up. But there is hope!
There are companies that are innovating ways to potentially lower the costs of consumer goods. One of these companies is Cetaris. Cetaris is innovating ways to lower costs on the maintenance of fleets of trucks, as well as having an inventory management app that can help reduce waste or under-purchasing (which can have higher demand and prices).
Competition is Always Interesting
Consumers will adapt their buying habits as well. As a result, companies are under pressure to continue to meet their goals. Every company will choose to lower their costs a few percentage points over not making a sale. Also, when too many companies in a single industry fight over a smaller number of potential buyers, prices also tend to drop, particularly for brands that aren’t as well known. When the less-known brands drop and create a gap between them and the name brand, the bigger companies may start to feel a need to drop as well.
What if Prices Don’t Drop?
Even when the market may suggest a drop in prices, sometimes they just don’t drop, or even continue to rise. What can you do when this happens?
- Buy in bulk when it makes sense. Buying in bulk is almost always less expensive. As the quantity increases, the cost per ounce decreases. However, don’t buy in bulk just to buy in bulk. Sure, a five-pound bag of grapes may be a better deal than a two-pound bag, but if half of it gets thrown out, that defeats the point.
- Use coupons. It is never fun to look for and cut coupons, but it can be worth your time if done correctly. Coupons are essentially free money for anyone who takes the time to use them.
- Look for sales. When going shopping, look for items that are on sale or in season. It is best to do this before you go out shopping; otherwise, it may become an additional impulse buy. However, even if it’s unplanned, an essential item on sale can be a money saver.
- Make a list. Far too often, people go to the store and just buy whatever looks good at the time. This leads to two issues. First, food for meals isn’t always purchased. This leads to not having anything to eat for a meal and then going out to eat. Second, too much food is purchased that is never consumed. Although the pineapple may look great, if it is not paired with a meal, it may end up rotting.
- Eat before going to the store. Almost everyone has gone shopping on an empty stomach. This results in a lot of unneeded food purchases.
Check expiration dates. The shelf life of meat, dairy, and produce can mean the difference between saving money and wasting it. Identify the expiration date that gives you the most time to eat it before it spoils.