Buying in bulk at grocery stores
Can spending more at grocery stores save you money? It can if you are buying larger quantities in bulk. When companies sell larger quantities they spend less on things such as packaging and make more profit per package, so they are usually willing to sell their products to you for a lower price on a per unit basis.
Sometimes these savings can be significant. My favorite food to buy in bulk is buffalo. If you haven’t had buffalo before, it is delicious. It is very similar to beef and can be used in any recipes where you would normally use beef. However, it is much healthier than beef.
The problem with buffalo is that it is very expensive. I buy my buffalo from a local buffalo rancher I met at my local farmers market who my kids call “Buffalo George”. Buffalo George charges $7/ pound for ground buffalo and up to $22 for the most expensive steaks. Even though I am willing to pay a little more because it is healthier, that costs a lot more than beef. To save money, I buy a quarter ( half a side) of buffalo at a time. Because I buy in bulk, Buffalo George gives me a big discount and only charges me a little over $4/ pound for a variety of ground buffalo, roasts, steaks, and ribs. At that price isn’t much more expensive than buying beef. Paying $450 all at once for over 100 pounds of meat seems like a lot of money, but it saves me money in the long run as I know I won’t have to buy meat again for over a year.
Where to buy in bulk.
Warehouse clubs such as Costco or Sam’s Club can be some of the best places to buy in bulk. If you don’t have a warehouse club in your area you can also look online to see if you can find good deals on large quantities of what you are looking for online. I buy my pistachios off of Amazon, where they cost about 1/3 of what they cost at my local grocery store if you look at the cost per pound.
Even at your local grocery store, buying the largest size available will often save you significant amounts of money. To see if buying the larger size really saves you money, you need to be able to compute the price of an item on a per unit basis, which is a way of calculating how much an item costs without considering how much of it you are buying.
Calculating per unit price
To calculate what an item costs on a per unit basis you need two pieces of information, the cost and the size. When you are comparing two items, the units used in the size must be the same. For example, you can easily compare an 8 ounce package to a 24 ounce package, but you can’t compare an 8 ounce package to a liter package. Look at the two boxes you are comparing closely and see if you can find on them the size of the package measured in the same units.
Once you have the price and units figured out, you just divide price by the number of units. So if a 8 ounce package costs $4, then you divide $4 by 8 to get a per unit price of $0.50/ounce. Then you compare that price to the larger package. For example a 24 ounce box might cost $8. That would mean the larger package has a smaller per unit price of $0.33/ ounce. When you think about it this way, it is easier to see that the larger package at $0.33/ ounce is much cheaper than the smaller package at $0.50/ ounce even though you pay more for the larger package.
How much can buying in bulk save you?
Let’s do a little study to see exactly how much buying in bulk can save you. My family’s favorite meal is pizza. For this study, I took a trip to my local grocery store and looked at the prices of everything I would need to make a pizza. I looked at the price of both the smallest and largest packages available for each ingredient. I then calculated how much it would cost me to make a pizza both with the small packages and by buying in bulk. Here is what I found.
Cost of making a pizza when buying small packages
Ingredient Small package quantity price pizzas/ package price/ pizza .25 oz yeast .75 oz $2.19 3 $.73 3.5 cups flour 17 cups $2.24 5 $.47 2 tablespoons olive oil 34 tablespoons $5.99 17 $.35 .5 teaspoon salt 156 teaspoons $.72 312 $.00 .5 teaspoon sugar 384 teaspoons $2.29 768 $.00 .5 cup pizza sauce 1 cup $1.89 2 $.95 1 cup cheese 1cup $2.44 1 $2.44 8oz mushroom 4oz $1.55 1 $3.10 3.5 oz pepperoni 3.5oz $1.89 1 $1.89 Total cost $9.94
Cost of making a pizza when buying in bulk
Ingredient Bulk package quantity price pizzas/ package price/ pizza .25 oz yeast 32 oz $6.39 128 $.05 3.5 cups flour 33 cups $3.59 10 $.38 2 tablespoons olive oil 102 tablespoons $9.79 51 $.19 .5 teaspoon salt 156 teaspoons $.72 312 $.00 .5 teaspoon sugar 384 teaspoons $2.29 768 $.00 .5 cup pizza sauce 8 cups $4.79 17 $.29 1 cup cheese 4 cups $8.98 4 $2.25 8oz mushroom 8oz $1.99 1 $1.99 3.5 oz pepperoni 7oz $3.59 2 $1.80 Total cost $6.94
You can see that by buying in bulk I can save $3.00/ pizza which reduces my cost of making a pizza by 30%. I expected that result buy I am actually pretty shocked that it costs me more to make a pizza at home than it does to buy a $5 carryout from Little Ceasers. That is interesting. Maybe that proves that buying in extreme quantities like Little Ceasers must do gets you even bigger discounts?
You can see from this study that although you will spend more up front if you buy in bulk, your meals will cost quite a bit less in the long run when you buy larger packages with a lower per unit price.
What are your favorite ways to save money by buying in bulk?