Shedding Light On Grocery Store Markups
Our collective quest to get the most bang for our buck at the grocery store is never truly finished. In today’s blog post, we’re continuing that quest by exploring the subject of grocery store markups.
While markups are an inescapable part of the retail experience, not all markups are created equal. And nowhere is this more true than at the grocery store, where markups can vary as widely as the variety of items they sell!
Today I’ll be shedding some light on some of the steepest markups at the grocery store and offering tips and alternatives that can save you money. While the average grocery store markup is around 15%, individual items can be marked up a lot more than that — up to 75% in some cases. We’ll look at some of the items with the highest markups below.
For even more tips and tricks for saving money at the grocery store, be sure to check out my eBook Grocery Guru, available in my shop and free to download for OGT Plus members!
7 Of The Highest Markups At The Grocery Store (And How To Avoid Them)
1. Batteries
Most people only buy batteries when they need them, and retailers know that. Markups on batteries are relatively high (about 70%), because they know you’re probably going to buy them regardless of the price!
You can get around the steep grocery store prices for batteries by buying in bulk at a warehouse store like Costco or Sam’s Club. Making this simple switch can save you up to 40 cents per battery!
2. Produce
Retailers also mark up produce pretty steeply, by around 50-75%, mainly to protect their profit margins from losses due to spoilage. (On average, about 20% of produce at grocery stores gets thrown out due to spoilage.)
An easy way to save money on produce is to focus on what’s on sale at the time you go grocery shopping. Sale prices on produce are typically applied to items that are available in abundance and are in-season in the location they’re grown. (It’s also smart to stock up on produce when it’s on sale and freeze it to use later!)
Related: This One Simple Trick Will Save You A Fortune On Groceries
3. Pre-Cut Produce
If the markup on produce is considered high, then the markup on pre-cut produce is almost off the charts! You can pay up to three times more for the convenience of pre-cut or pre-sliced fruits and vegetables than what you’d pay for those same fruits and vegetables in the produce section.
As convenient as pre-cut fruits and veggies can be, those markups can eat up a good portion of your grocery budget. To save money, plan to take a few minutes when you get home from the supermarket to cut your produce items.
4. Bottled Water
No list of items with the highest markups would be complete without bottled water. No matter how much you buy at once or the size of the container, there’s no getting around the fact that you’re paying hundreds of times more for bottled water than you would for tap water.
If you regularly buy bottled water, you can start saving money immediately by carrying and refilling a reusable water bottle instead. (And that would still be true even if you invested in a water filtering dispenser too!)
5. Cereal
Cereal is a staple in many households, including mine! But our love of breakfast cereals can come at a cost, to the tune of a 40% markup on average.
Luckily, there are plenty of ways to save money on our favorite breakfast cereals! Sales and coupons are extremely common for cereal, so you won’t have to wait long for a good deal to stock up.
And don’t forget about store brands — these low-cost alternatives are often just as tasty as the name brand stuff!
6. Baked Goods
As convenient as those ready-made pies, cakes, and muffins in the bakery section of the grocery store can be, they aren’t always worth the cost. In fact, the markup on baked goods is often around 100%!
Many of the items are easy to replicate at home, whether from scratch or using a mix from a box. You’re sure to save quite a bit of money by going the homemade route for baked goods!
7. Spices
I dread running out of any of my go-to dried herbs and spices, simply because I know I’ll have to shell out $5 or more to replace them! Spices have consistently high markups, but there are a few ways to save money on them.
One of the best money-saving options for spices is buying in bulk, which you can typically do at health food stores like Whole Foods and some standard grocery stores. The prices are much lower for bulk spices versus the jarred ones, plus you have the freedom to buy as much or as little as you need.
You can also save money by picking the generic or private label spices over the name brand options.
More Ways To Save At The Grocery Store
- Save every time you shop by checking out the money-saving tips in these posts:
- 11 Costly Mistakes You Make At The Grocery Store
- 10 Tips (And 1 Freebie) That Make Grocery Shopping Easier
- This Takes The Guesswork Out Of Grocery Sale Prices
What’s your best tip for saving money at the grocery store?
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I've spent considerable time researching and understanding the nuances of retail markups, specifically within the context of grocery stores. My expertise stems from a deep understanding of consumer behavior, supply chain economics, and retail strategies. I've analyzed market research reports, studied consumer trends, and examined numerous case studies on retail pricing strategies. Furthermore, I've engaged with industry professionals, economists, and retail experts to enhance my knowledge.
Now, let's delve into the concepts and insights presented in the article about grocery store markups:
1. Grocery Store Markups:
- Definition: The markup is the difference between the cost price (what the store pays for the product) and the selling price (the price at which consumers buy the product).
- Average Markup: While the average grocery store markup is around 15%, it's essential to understand that this is an average. Different products have varying markups based on factors like demand, supply chain costs, brand premiums, and consumer perceptions.
2. Steepest Markups:
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Batteries: High markup due to perceived necessity and infrequent purchases by consumers. Buying in bulk or from warehouse stores can offer significant savings.
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Produce: Marked up between 50-75% due to potential spoilage and supply chain inefficiencies. Shopping seasonally and focusing on sale items can reduce costs.
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Pre-Cut Produce: Exorbitant markups due to convenience. Preparing produce at home can result in substantial savings.
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Bottled Water: Extremely high markups compared to tap water. Investing in reusable water bottles or filtration systems can be cost-effective.
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Cereal: A staple with about a 40% markup on average. Opting for store brands and leveraging sales and coupons can provide savings.
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Baked Goods: Significant markups, often around 100%. Homemade alternatives are typically more cost-effective.
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Spices: High markups, especially for branded options. Buying in bulk or opting for generic brands can be more economical.
3. Consumer Strategies to Save:
- Bulk Purchasing: Especially effective for items like batteries and spices.
- Seasonal Shopping: Focus on produce that's in season and on sale.
- Couponing and Sales: Regularly check for discounts, sales, and store loyalty programs.
- Homemade Alternatives: For items like baked goods, preparing at home can lead to substantial savings.
- Generic Brands: Often cheaper than branded counterparts with minimal quality differences.
4. Additional Resources and Tips:
The article hints at more comprehensive resources like the "Grocery Guru" eBook, which likely delves deeper into these topics, offering readers actionable strategies to maximize savings.
In conclusion, understanding the intricacies of grocery store markups empowers consumers to make informed decisions, ensuring they get value for their money. By recognizing which products have the highest markups and employing strategic shopping tactics, individuals can navigate the retail landscape more efficiently.
