Since our financial epiphany, we have tracked our expenses using a self-made excel sheet. Within this excel sheet, we have established different categories like grocery, household items, eating out, hydro, car fuel, etc to allow for some quick analysis when needed. We have been reviewing our expenses semi-annually to see which areas we can improve on.
One of the key expense categories that we keep a close eye on is our grocery spending. With two growing kids, I expect that our grocery spending will increase over the next few years. Baby T2.0 started eating solid foods in 2H of 2016. Today she often eats as much as I can. Baby T1.0 eats quite a bit too. Occasionally both kids would eat more than I do! So, we have already seen the grocery budgetary effect of having two growing kids.
With that in mind, I was super inspired after reading Justin at Root of Good’s article on price comparison of low cost grocery stores. He concluded that Costco costs more, and Walmart is the best. After reading his article, I began to wonder, what would happen if I were to do a similar study of grocery stores in our area? Would we find a different result? Would we find that Vancouverites pay more for food?
I decided to do the experiment. I visited 5 grocery stores near me in the metro Vancouver area to check prices on 18 food items that we regularly purchase. The grocery stores I picked were Walmart, Safeway, Costco, Save On Foods, and Superstore.
I had some assumptions going into the experiment. I assumed that Safeway would be the most expensive store with Save On Foods slightly behind in food prices. I assumed that both Walmart and Superstore would be the cheapest, with Costco falling in the middle of the cost spectrum.
The Raw Numbers
Here are the raw numbers with the lowest cost for each item highlighted in green:
Note: We are a bit messed up here in Canada when it comes to food unit measurements. Technically we are supposed to the metric system, but prices for produce are typically displayed in dollar per pound, then gets converted to dollar per kg on the receipt (sometimes meats too). Hence for my usage of both $/lb and $/kg.
My assumption was correct, Safeway and Save On Foods were clearly the “price leaders”. I was shocked how much more expensive Safeway and Save On Foods were when compared to Walmart and Superstore.
As expected, Walmart and Superstore led the way on having low priced items.
Costco didn’t sell any organic produce, so it was not possible to do an “apple to apple” comparison with the other stores. Costco was also the only store that didn’t sell canned coconut milk.
What surprised me is the fact that Costco had the cheapest overall price if we add up the prices of the 14 available items. Walmart was 17.76% more expensive than Costco, Safeway was 33.13% more expensive than Costco, Safe On Foods was 30.54% more expensive than Costco, and Superstore was 2.58% more expensive than Costco (looking at the “$ more expensive than Costco” row in the chart above). Despite this surprising result, I believe this was a bit misleading. This was probably a result of a huge price delta in meat items between Costco and the other stores. So when we added up everything, the overall Costco price was lower than the other stores.
Another thing to consider when shopping at Costco is that Costco is the only store in this experiment that comes with an annual membership fee. You must have a membership to enter Costco and you must show your membership when you purchase an item (you can get away without one, however, if you use a Costco gift card). So when calculating the true Costco price, we need to consider either the $60 Gold Star membership fee, or the $120 Executive membership fee.
If we pick the 14 lowest priced items from the 5 stores compared, the total price came out to be $49.18. When compared to the optimized price, Walmart was 29.60% more expensive, Safeway was 42.76% more expensive, Costco was 14.40% , Save On Foods was 40.55% more expensive, and Superstore was 16.61% more expensive.
As noted, the data might be a bit misleading due to the overall cheaper meat prices at Costco. If we take out meat prices, the optimized total price was $27. When comparing this optimized price, Walmart was 5.02% more expensive, Safeway was 28.83% more expensive, Costco was 8.43% more expensive, Save On Foods was 28.39% more expensive, and Superstore was 16.14% more expensive.
Based on the two optimized price results, I would conclude that Walmart is the best place to purchase grocery items, if you aren’t looking for organic food and meats. Superstore is the best place to purchase grocery items if you are looking for organic food and meats.
A few notes on methodology
Unlike Justin did in his experiment, I did not pick the most reasonable items that many would buy. Rather, I focused on food items that our household would usually buy. Since late last year, we have been eating more organic food. Therefore, this resulted in picking organic produce, organic yogurt, organic eggs, and other organic items for this experiment. This may not reflect what other people may purchase, but I performed this experiment with our household in mind, so I picked items that we would usually buy.
I also picked prices for the largest packaging and generic brand whenever possible to drive the unit price down. For example, most of the Costco items were Kirkland brand, most of the Superstore items were No Name brand (yes that’s actually a brand name!), and most of the Walmart items were Great Value brand. When store brands weren’t available, I made sure I compared items with the same brand.
Initially I had 10 more items like organic celery, organic broccoli crown, organic whole chicken, crisp bread on my price comparison list. However, not every store carried these items, which made the price comparison quite difficult. For examples, Costco was the only store that carried canned organic diced tomato, and Save On Foods and Superstore were the only stores that carried dark rye flour. In the end, I decided to take these items out to make the price comparison analysis easier.
Another key point to mention is that the prices listed in the chart are all regular prices. When I did the experiment, some items were on sale in the different stores. So if we check out the weekly flyers, we could save even more money on many of these items.
Grocery Shopping Strategy
Considering that we want to optimize our grocery expense moving forward, I think this cost comparison will help us in reducing our overall grocery bill. You see, for the most part, we have been shopping at Costco and Save On Foods. This is because we are a one-car-household and the closet grocery store is Save On Foods. Mrs. T would walk to Save On Foods with the kids for grocery shopping and I would drive to the Costco nearby my work every month to purchase other bulk items.
Since both Superstore and Walmart are about a 30 minute walk from our house, it is probably unreasonable to ask Mrs. T to shop there on a regular basis. This means moving forward, I need to do more grocery shopping.
If we look at our household food consumption trend, we consume a lot of eggs and cheese (we go through minimum 2 eggs each day). For meats, we usually eat chicken, ground turkey, and fish rather than ground beef. Overall, we have been eating less and less meat in our day-to-day meals.
Looking at the price comparison chart above, here’s the grocery shopping strategy we should deploy moving forward:
- Plan ahead. Develop a grocery shopping plan with Mrs. T so we can split the shopping duty.
- For dairy, eggs, and possibly bulk items like spaghetti, flour, canned diced tomatoes buy them from either Costco or Walmart.
- For organic produce and meats, buy them from Superstore.
- If Mrs. T needs something on the day of, and I can’t buy from Costco/Superstore, it’s OK to buy from Save On Foods.
- Buy stuff that’s on sale that we normally buy.
- Plan our meals around items that are on sale.
- Buy bulk to save money. We can always repackage meats into smaller portions and put them in our chest freezer.
- Save the price comparison on Google Drive so we can check the prices if we see something on sale at a store.
- Consider amount of time it takes to shop. Time = money.
- Don’t just blindly buy things from Costco.
- Drive long distances just to save a few dollars. It makes no sense to buy from all 5 stores just to optimize grocery spending.
Grocery spending trend
Below are our household average grocery spending since 2011. As you can see, our grocery monthly spending has been increasing the last couple of years. I expect this number to increase in 2017 again due us eating more organic food and Baby T1.0 and Baby T2.0 eating even more food. (We spent a total of $44,138.77 in 2016)
Having said that, if we focus on shopping smarter, I am optimistic that we can reduce our monthly grocery spending. We probably won’t be able to hit below $500 per month (~$388 USD), but I think below $600 per month (~$465 USD) is quite reasonable and definitely possible.
Just for fun comparison
What happens if we compare our optimized prices with Justin’s? Do food cost more in Vancouver or do food cost more in Raleigh?
Since Justin and I performed our experiment with different items, it was hard to do a direct comparison. To make this realistic, I decided to compare only common items on our list.
My assumption is that food items are much cheaper in Raleigh, NC than Vancouver, Canada.
Below are the comparison numbers:
Wow, I am shocked with the comparison result!
Turns out, many food items are much cheaper in Vancouver than Raleigh. Obviously the poor CAD to USD exchange rate made the Raleigh food items more expensive arbitrary. If we consider a 1:1 exchange rate, you can see that Raleigh would come out ahead.
Having been to Raleigh, NC several times, I can say with certainly that the cost of living in Raleigh is much cheaper than Vancouver. Houses are much cheaper in Raleigh than Vancouver, and taxes are lower in Raleigh too. I think Justin and his family will be just fine paying slightly higher prices on food. 😉
Should we continue shop at Costco?
According to the results of my experiment, it still makes sense to shop at Costco. Costco sells a lot more than just grocery items. Costco has great deals on many non-perishable items like toilet paper, dish detergent, baby diapers, etc. Sometimes it just makes sense to buy items in bulk to save as much money as possible.
One of my biggest frustrations of late with Costco is how long it takes to find a parking spot. The other weekend I took Baby T1.0 and Baby T2.0 to Costco by myself. It took me close to 20 minutes to find a parking spot!!! Once I got inside, the Costco warehouse was super packed. What was even more frustrating was the fact that so many people were walking with their shopping carts around like snails and we couldn’t pass them at all. It was a shopping cart traffic jam! (Maybe I should revise my Costco shopping survival guide?)
However, Baby T1.0 and Baby T2.0 always enjoy going to Costco to try out the different free samples. They also love all the attentions they get from the Costco associates and cashiers. Going to Costco with their daddy on the weekends have turned into somewhat of a family tradition as of late.
I think we will continue shopping at Costco for non-perishable, dairy, eggs, and other bulk items. Somehow, I will need to find a not-so-busy time slot to go to Costco, grab all the items I need quickly, and get out.
Seeing how insanely busy it is at every local Costco warehouse and people’s general love for shopping at Costco, I am really glad that we are Costco share owners. Hopefully Costco will continue making massive amount of profits and share the profits with their share owners in the forms of increasing dividend payments and special dividend payments.
Superstore and Walmart are the cheapest stores in our area. Costco falls in the middle of the price spectrum. Save On Foods and Safeway are the most expensive, but that isn’t a surprise, since neither of them are considered as “low cost” grocery stores.
While it was fun to compare prices and finding out which store has the cheapest items, we need to remember the time it would take to walk/drive to the different stores. With two little kids, it simply makes no sense to go to 5 different stores just to save a few dollars here and there. It is way more efficient to buy grocery from a couple of stores.
One final thing to consider is that items go on sale in all of these stores. When this happens, we need to take advantage of the sale price and stock up if possible.
Dear readers, where do you shop for grocery? How much are you spending per month on grocery?