Pinching pennies on groceries

McClatchy Newspapers (MCT) - Even in a recession, you have to eat. But with food prices up 7 percent this year and projected to go up at least another 3.5 percent next year, it's not easy to fill the grocery cart.

Doris Jones has started eating just two meals a day. She drinks water and juice to stay full.

Jones, 62, has a part-time job at Target and gets a small pension from General Electric. Her husband, retired from the now-nonexistent GTE phone company, doesn't. Though they are empty nesters now, they still have a son in college.

With everything costing more, food is just one place where she's skimping.

"I try not to do things I'm not needing to do," Jones said. "I feel like I don't know what happened to the money. I'm still buying the cheaper products, but the money still goes away."

Many shoppers have time-tested strategies for saving at the food store. Some pinch pennies out of necessity, others because it's habit or for the sport of it.

But in the past year as prices for all kinds of staples from rice to cheese to butter have climbed, fewer shoppers are indifferent to the cash register total.

Coupons have taken on new importance _ The Promotion Marketing Association now reports that 97 percent of the people who do the majority of the shopping for their households use coupons at supermarkets.

Shoppers walk the aisles, scanning sales fliers and punching numbers into calculators. They stand in front of the cereal boxes, comparing prices, doing the mental math on buy one, get one deals. Others bypass certain aisles and products that were once a staple of their pantries.

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For Stacey Bianco, cookies top a long list of things she's cut out of the family budget. She's trying to trim her monthly grocery bill for her family of five from $600 to $400.

"I've stopped buying the $5 electric toothbrushes and have switched to the old 98-cent hand toothbrushes," said Bianco, 40, a stay-at-home mom from Raleigh.

"And these next two weeks, it's going to be a lot of soups, sandwiches and salads instead of a lot of meat."

Pushing a cart down the shiny aisles of a Wal-Mart Supercenter in Raleigh, Bianco was armed with a list, a calculator and pile of coupons in the pocket of her black coat.

She said she has clipped coupons off and on for 15 years but was forced to resume the habit when money became tight this year. Her husband works as a maintenance supervisor.

"When the gas prices went up, I had to start cutting the food budget back down," she said.

Her children, ages 7, 11 and 16, have noticed the changes. But Bianco said they are learning to adjust.

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"The kids are complaining about not having as many snacks," she said. "There are no cupcakes. I buy popcorn. Popcorn's cheap."

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Cutting back at the food store is almost inevitable, with the economy officially in a recession and consumer spending slowing across the board.

There is a high level of sensitivity to food prices because food is essential and the food store is one of the places where American shoppers spend the most time. Most families visit twice a week and spend an average of $97.80 a week there.

Next year, the estimated 3.5 percent increase in food prices could easily go higher if gas prices rise again, bad weather again affects crops or some unforeseen event affects the supply chain.

"We're looking at basically a 10 percent increase in food prices" over the two-year period of 2008 and 2009, said Brian Todd, president of the Food Institute, a New Jersey group that tracks food pricing. "That hasn't happened since the late 1980s."

At the very least, most people are trying to keep their grocery spending level as prices increase.

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Laura Sheppard quit her job as an engineer in August to go back to school for nursing. She and her husband, who is also an engineer, live in Raleigh and are now living on his income.

They used to simply go to the store and buy whatever they wanted. But now, Sheppard said, she shops at Wal-Mart for any items that come frozen, boxed or otherwise prepackaged and then goes to other stores for produce.

They've also taken other steps to limit their spending. They plan their weekly meals so they are less likely to grab items impulsively at the store.

They buy such items as ice cream and Coke only when they are on sale. And they've stopped buying frozen breakfast sandwiches; instead they buy the ingredients and make them at home.

"A box of four is like $8," said Sheppard, 25. "You can buy the meat, the eggs, the cheese _ enough supplies for eight or 12 _ for the same money."

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Betty Dean said her monthly grocery bill can easily be $750, even though she's paying more attention to sales, using more coupons and planning her meals a week or even two weeks in advance.

A 67-year-old retiree from the North Carolina Department of Health and Human Services, Dean said grocery costs eat up the majority of her $1,000 monthly Social Security income.

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She and her husband, Jim, survive on their two retirement checks and the remainder of the Social Security money.

"I used to be able to buy for us for $100 to $150 a week," she said. "If I spent $150 a week, that was just enormous. Now if we spend $150 a week, that's average."

For their part, stores have shifted gears and are promoting value.

They are being more aggressive with sales and promotions, and are launching new programs that emphasize bargains.

But retailers can't afford to give away too much, however, said Bill Greer, spokesman for the Food Marketing Institute. Most food stores have a profit margin of only about 1 percent.

"There's a very small margin of error," he said.

And shoppers still need to pay attention, Raleigh shopper Kindra McKnight cautioned, because advertised deals may not be the best overall deals.

Standing in the cereal aisle of a Harris Teeter store in Raleigh on a recent Wednesday night, McKnight was trying to calculate the final price on a Froot Loops offer.

On sale as buy-one, get-one free _ which means each box rings up at half-price _ and with a $1 coupon, she'd end up paying about 80 cents for a box instead of the shelf price of $3.59.

"Even if you go to Wal-Mart, Wal-Mart's prices have gone up, too," she said. "But at the same time, if you pay attention and you put in a little effort, you can save if you try."

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But despite their best efforts to trim costs, some shoppers are nearing the breaking point.

Doris Jones said things got rougher when her hours at Target were cut back.

Her daughter started helping her pay for her car. And she's started buying more store brand products, and switched to cheaper cleaning supplies.

But for Jones, there's more worry ahead: Her income from Target may soon be even less.

"They're telling us they'll have to cut more," she said.

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© 2008, The News & Observer (Raleigh, N.C.).