A good rule of thumb is to buy high margin products at grocery stores only if you have a good coupon deal for them. Otherwise, it’s easy to blow your budget quickly.
You might not even realize that grocery stores mark up certain items so high. After all, you get used to seeing that price time and time again. Therefore it feels normal and fair.
However, there are high margin products that grocery stores dramatically inflate the price on. Make sure you always look for coupons for these items.
High Markup Groceries: Fresh Produce
Grocery stores markup prices on items that they are likely to take a loss on. Fresh produce is at the top of the list. After all, it spoils quickly. Therefore, grocery stores have to throw a lot of it out. Moreover, many shoppers won’t purchase produce with blemishes. As a result, a lot of items are thrown out just because they don’t look pretty. In order to recoup those costs, grocery stores markup their produce prices significantly. In fact, a lot of fresh produce is marked up 75% or more.
Of course, fresh fruits and vegetables are good for you. You don’t want to avoid buying them altogether. However, you should always use coupons to reduce their cost. Alternative options include:
- Get produce directly from the farmers through farmers’ markets and CSAs.
- Sign up for some of the “ugly produce” deliveries that are now available particularly in urban areas.
- Buy produce in bulk with neighbors and split it up to keep costs low.
- Always buy produce when it is in season.
- Shop around to find the stores that offer the least markups in your area.
Meat is Also Marked Up
Basically, the same rule that applies to produce will apply to any store items that are going to perish quickly. Meat is another example. Additionally, it is important to be aware of the meat that you purchase, because some have higher markup prices than others. In particular, the price will be higher if the meat has been cut up into small pieces. For example, you can save money by purchasing a large steak and cutting it up yourself rather than purchasing pre-cut cubed steak. Additionally, when the butcher marinates and prepares meat for you, they mark it up.
The High Cost of Prepared Foods
It is so tempting to stop over in the prepared food section of the grocery store to pick something up for dinner. The soups, salads, and hot meals are all ready to go. However, you will pay for the convenience. The markup is high. Unfortunately, there are rarely coupons for this section of the grocery store. Forego the prepared meals and buy ingredients at the grocery store instead.
Bottled Water is one of the Highest Markup Groceries
According to some sources, the markup on bottled water can be as high as 4000%. In other words, grocery stores make a lot of money off of you when you purchased bottled water. Your best bet is to invest in a high-quality home filtration system. However, if you must buy bottled water, then you should always look for a coupon. In fact, try to double-stack or triple-stack coupons on this high markup item.
Other High Margin Products
Here are some other groceries that typically have a high markup. Make sure that you always use coupons, shop the store brand, or avoid these items altogether:
- Bakery goods, particularly those that aren’t on the shelf but are instead in the bakery section
- Canned goods, especially soups
- Cereal, especially the colorful, sugary, kids’ cereals
- Cheese, especially the type that is in the deli instead of the dairy section
- Ground coffee
Is there anything that you typically buy at the grocery store that you suspect has a high markup? Share in the comments so we can investigate.
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