Soaring grocery prices have left the average consumer wondering, “Is it even possible to save money on groceries in 2022?” Happily, the answer is, “Yes”.
Inflation is having a tremendously negative impact on families, making it now more important than ever that you know how to adapt and pivot as we head into a new year.
If you find yourself getting four bags of groceries for the same amount you used to pay for six bags, you are not alone.
In this article, I’ll show you exactly what’s going on with the price of food – and why the USDA has the rate of inflation correct. Then, share the six most important ways to pivot to save money on groceries and stop throwing out rotted food and put on my “far-seeing glasses” to predict the trends I see coming further down the road in 2022.
Watch the video version of this post, below.
What is really happening with grocery prices and inflation?
First of all, although CNBC, FOX News, and other national outlets cite a statistic of seven percent as the overall price increase in groceries, this is not what real life people are seeing when they go grocery shopping.
A much more accurate view can be found at the USDA in the monthly food plan section of their website.
Each month, the USDA publishes food plans, meant to represent the average cost of purchasing food to maintain a healthy diet. The charts are broken down into specific age groups and offer four food plans: thrifty, low-cost, moderate, and liberal, with “thrifty” being the lowest cost and “liberal” being the most expensive.
Although the UDSA maintains the charts each month mainly to provide a source of information and data for other agencies which deal with issues like food insecurity, food stamps, and helping low-income families, I have, personally, watched these monthly food plans for over thirty years.
While raising four sons on a low income which never reached that of the national US average, I always noted that my grocery budget was always nearly fifty percent lower than even the most diminutive USDA “thrifty” food plan.
It is important to understand that in compiling statistics on the cost of food each month, the USDA has used scientific methodology to devise a standard definition of what is means to eat a “healthy diet”. In other words, in order to create a useful set of statistics, draw comparisons for a large group of people, and track changes over time, they have standardized the criteria for what comprises a well-balanced meal plan which provides all the necessary nutrients for health and growth.
In everyday terms, they try their best to put themselves in the shoes of the average consumer, heading to the store every month to feed their family.
Using a hypothetical “grocery cart” the UDSA fills it with the same food every thirty days, thankfully, arriving at a far more accurate assessment of how rising prices are impacting individuals and families throughout America, rather than the standard used by the media, that of the “overall inflation of food prices”.
Simply put, the USDA shops each month like you do, filling their cart with meat, dairy, produce, eggs, and whole grains. When viewed over the past twelve months, this method of tracking prices, reveals a twenty-four percent increase, not the seven percent overall food inflation which has been touted by other government agencies and the media.
The USDA provided all the information to accurately compare the “Thrifty Food Plan” from January to December of 2021. The percentage increase seen when the USDA purchased their standard grocery cart full of food was twenty-four percent.
I applied this same percentage to the Low Cost, Moderate, and Liberal food plans, filling out the chart accordingly. However, I would suspect that higher inflationary jumps could be seen at the other three food plan levels, assuming that the monthly grocery carts for those levels contain higher priced foods, like a greater quantity or higher quality of meat.
Although the reasons for the sudden jump in prices are diverse (transportation issues, natural disasters, and a lack of workers, to name a few), the end result is the same.
We are paying more at the store every week and we need to make changes.
Six important ways to pivot to save money on groceries in 2022
1. Watch for Shrinkflation
Manufacturers are shrinking packaging contents. Yet, the the exterior of your favorite product looks exactly the same. This phenomenon is commonly known as “shrinkflation” and it is happening regularly at your local store.
Don’t assume that you are getting the same amount inside the package of your favorite foods that you did in 2021.
Watch packaging closely before putting your favorite items into your grocery cart. The outside may look the same, but a closer look will reveal that the ounces, grams, pounds, or kilograms have been decreased.
There is less product inside your favorite brands of food, meaning that it may no longer be the best buy on the block.
Food companies buy raw materials months in advance, meaning that for much of 2021, they have been able to avoid the unpleasant choice of raising prices. They have simply used that they had in stock to continue making your Keebler crackers and Wheat Thins.
However, I believe that manufacturers have now reached the end of their pre-purchased supplies. As they begin to purchase new materials at higher price points, they will pass that increased overhead along to consumers in the form of a “double whammy”.
Look for the size of packages to shrink and the prices to go up.
2. Do the Math
The increase of shrinkflation means that you are going to need to do math at the market. Don’t leave home without your …. calculator.
Even though many stores include the unit price on the shelf, it’s not always expressed in the same unit. It’s hard to compare the price per pound of one item – when the price per ounce is on the item you’re comparing.
The biggest is not always the best price. Alternately, if name brand is on sale, it (surprisingly) may beat out generic.
The new rule is: Do the math and check to be sure you really have the best deal before buying.
Look for a surge in off-brand and generic brands as they step up to the plate in terms of quality and quantity to grab their share of consumer’s pocketbooks.
For example in the last few years Aldi has cornered the market on a huge range of high-quality, off-brand products at fantastic price.
Have you tried Aldi’s specialty products? Their coffee is first rate and the price point is also very good.
3. Take Advantage of Sales Cycles
Sales cycles are predictable periods of time in which the prices of products drop to their lowest. There are two basic types of sales cycles: seasonal and cyclical.
Manufacturers and distributors have these sales, hoping that the increase of selling a large volume of their product will more than make up for the reduction in price.
Not only should you BUY during these drops in price, you should OVER-BUY. That’s right! Stock up and have a plan for preserving it for later use.
Seasonal Sales Cycles
This type of sale is seen mainly when the cost of fresh food, especially produce, bottoms out when it is in season and most plentiful. Produce has a relatively short shelf life, meaning that if it is shipped ripened, it must be sold quickly. Dropping prices ensures that grocers won’t be left with moldy, overripe, unsellable product.
For example, you can count on citrus fruit going on sale in January and February and apple prices plummeting when the new crop ripens in the fall.
Seasonal sales cycle also happen near major holidays. Cabbage is cheapest near St. Patty’s Day, while strawberries go on sale for Valentine’s Day. Barbecue sauce, blueberries, and baked beans will appear in ads near the 4th of July, just like turkey, ham, cranberries, sweet potatoes, and squash go on sale for Thanksgiving and Christmas.
Cyclical Sales Cycles
These sales include pretty much every other area of the store with the exception of produce. The cycles come around every six to twelve weeks. The cycle varies according to the product. For instance, pasta goes on sale every ten weeks or so, while canned beans may follow a six-week sales cycle.
Manufacturers rely on volume selling during a sale. The store relies on “up sells” of related products. For instance, when pasta goes on sale, you’ll find regular priced pasta sauce and parmesan cheese on the shelf sitting right beside the Cremette pasta.
Why? The grocer knows your brain will make the connection and suddenly you’ll be serving your family an Italian feast, for which you paid regular price on everything except that discounted box of spaghetti.
I believe that sales cycles WILL continue into 2022. Yes, we may see overall higher prices than in the past, but the basic premise of sales cycles is here to stay.
4. Don’t Buy “the Usual”
If you are in the habit of grabbing ground beef just because that’s what your family likes, 2022 is the year to branch out a bit and choose something different.
Here’s an example of what I mean.
Although beef has gone up twenty percent, other items in the meat category have remained more stable. For instance, poultry and fish have both risen about eight percent and all other meats just five percent.
Not only should you focus on buying meat items which have not gone up as steeply in price, you should also keep in mind sub-categories which will be an even better deal.
For instance, within the broad category of “poultry”, turkey will always be on sale for Thanksgiving and Christmas and chicken breasts will always be the most expensive way to buy that meat. Whole chickens, thighs, or drumsticks have always traditionally been cheaper. So, that eight percent increase will mean that they will remain your cheapest buy in 2022.
When it comes to fruits and vegetables, look in the frozen or canned food sections. While fresh fruits are up six percent, the processed varieties have risen just four percent. So, canned pears, pineapple, or peaches in natural juice may be a really great buy.
Bear in mind that if you find a great deal in the fresh produce section, it’s easy to learn how to can, freeze, or dehydrate them for later use.
Although manufacturers will try to make up for losses in profit, good deals will still be available. You just have to know where to look.
5. Cook from Scratch
I received an email from a viewer, Martha, this morning, in which she sent a great reminder that before you purchase a boxed mix or pre-made product, that you need to, “Check costs to make any desserts and bread”.
She added , “You may find that it’s cheaper to make from scratch or you may realize that — it is too expensive & choose not to make” it at all.
Honestly, with a few exceptions, making food yourself is less expensive than buying prepared or boxed meals and entrees. Cooking takes a practice, but if I learned to do it at the age of 20 with virtually no prior experience, you can, too.
Canning, dehydrating, and freezing will continue to grow in popularity, as families see the wisdom in having food stored up for the future.
6. Set Aside “Stock-Up Money”
I’ve done this for years and suggested it in the past. At the beginning of the month, divide your grocery budget into fifths. One-fifth (or 20%) will be set aside for stocking up when you find fantastic markdowns.
For example, if your grocery budget is $500 a month, when you divide it into fifths, you get $100 for stocking up and $400 for the rest of the month (or $100 a week).
Having money specifically earmarked for stocking up on great deals takes the pressure off of your budget and gives you peace of mind that you aren’t going to get to the 20th of the month and find that you have virtually no money left in the food budget, because you spent it all buying case lots of that great deal you found on the 4th of the month.
You will need to be ready and have money set aside for grabbing those great deals when you find them. Also, in 2022, it’s not wise to wait and plan to go back later. That fantastic markdown or low, low priced product may not be there next time.
What are you seeing at your local grocery store? Bare shelves? Rising prices? Great deals when you are at the right place at the right time?
Let me know in the comments below. I’d love to hear from you.