MONEY Shopping

Here’s How to Save Hundreds on Groceries

Shopping Carts
Baldomero Fernandez

These 29 surprising and easy moves will help you find the best prices, avoid the sneakiest store tricks, and prevent those costly impulse buys.

Regardless of whether you’re feeding just yourself or a whole family, you probably find that groceries take a big bite out of your paycheck.

Food is the third-largest household expense, the Bureau of Labor Statistics reports. And for a family of four, the average monthly tab runs between $568 for the super thrifty to $1,293 for those on a more liberal budget, according to the USDA.

MONEY consulted supermarket-savings experts for strategies that would help you trim the fat, without giving up the foods you love. Employing just a few of these 29 tricks—because let’s face it, you hardly have time to cook let alone turn shopping into a project—can take your bills down by 25%.

In other words, you could realize between $1,700 and $3,900 in annual savings.

Now that’s pretty delicious.

Plan Ahead

1. Do an inventory. Take stock of your pantry and freezer once a month to get a sense of what items you need and what you can skip buying, says Annette Economides, co-author of Cut Your Grocery Bill in Half with America’s Cheapest Family. Her husband and co-author Steve adds, “you don’t want to get in a panic when you’re in the grocery store and impulse buy an item at full price only to go home and find you’ve already got it.” Use an app like Out of Milk to help with your inventory.

2. Plan meals by the ads. “A lot of people make a weekly meal plan and then go look for a deal,” says Steve Economides. “Instead, look first at the deals and plan your meals around what’s on sale. This way, you can get meals for half price.”

3. Use up your pantry. Americans typically toss about 25% of the groceries we buy, according to the National Resources Defense Council. To prevent your food from turning into wasted money, sort through your fridge and pantry about once a week for items that are about to expire and place those in a designated space so that you remember to eat them before they go bad. Plug in what you’ve got at Supercook to find recipes that will help you use up your ingredients.

4. Shop only once a week. “The less you shop, the more you save,” says Annette Economides. Reduce impulse purchases and save gas by planning your shopping list so that you get a week’s worth of groceries in one shot.

5. Look for substitutes. Review your last grocery receipt and circle your most expensive purchases. When you’re next in the store, consider swapping these items for lower-cost alternatives—like ground turkey for ground beef. Subbing out a few items each trip can add up.

Get the Best Price

6. Do some reconnaissance. Pick the 10 or so items you most commonly buy (e.g. milk, cereal, bananas, chicken, detergent) and make a one-time mission to a few stores in your area (supermarket, Walmart, Target, Costco, dollar store) to compare the prices. A spreadsheet like this one from the Balancing Beauty & Bedlam blog can help. Your goal: to find out if you’re actually shopping the store with the lowest overall prices for your needs, says Stephanie Nelson, founder of the CouponMom.com.

7. Know the rock-bottom price. Learn the price range of the items you buy most frequently so that you’ll be able to recognize when they hit their lowest and stock up then, says Nelson. “For my family, one of our biggest grocery expenses is boneless chicken breast,” she says. “In my area, they’ll drop to $2 a pound and peak at $5 a pound over the course of three weeks. By stocking up at the lowest price, I’ve saved nearly $500 a year on just one item.”

8. Be wary of 10 for $10 sales. Or any promotion in which a store is offering several items for one price. Check the price of the item to make sure it is actually discounted, and not just clever signage making you think 89¢ cans being sold 10 for $10 is a steal. Also, if it is actually a discount, keep in mind that you don’t need to buy 10 to get the lower price.

9. Weight it out. Compare items by not just the sticker price but the price per ounce or pound to be sure you’re getting the best deal. Most stores post this number on the label on the shelf. For meats, look at the cost per serving instead so the bones and fat included in the weight of the item don’t mislead you.

10. Download coupons… Couponing doesn’t require circulars and scissors anymore. Visit Coupons.com, SmartSource.com or redplum.com to easily see what coupons are currently available in your area, then either print them out or load them onto a store loyalty card so you don’t even have to remember to bring them with you, says Nelson.

11. …then deploy them wisely. “When we find a coupon, we feel like we must use it right away,” says Nelson. “But wait until the item is at a really good sale price. This way you get savings from both the store discount and the coupon.”

12. Buy for 10 weeks at a time. Sales run through cycles, typically on an eight to12 week rotation, lifestyle and money-saving blogger Leslie Lambert of Lamberts Lately found. So if you know you’ll go through a box of cereal a week, buy 10 when they’re a deal to see you through the weeks when the item will be at full price.

13. Get an IOU. If a sale item is out of stock, ask the store for a rain check. It’s a slip of paper that grants you the sale price once the item’s back in stock regardless of whether the promotion is still running. Or if you don’t want to come back into the store, ask a manager if you can sub a similar item for the one on sale, recommends Annette Economides.

14. Photograph your receipt. You can earn cash-back on your groceries with apps like Ibotta, SavingsStar and Checkout51. These services offer weekly cash-back deals on a range of goods and all you need to do is take a photo of your receipt showing you bought the item to take advantage of the kickback, says Nelson.

Be Smarter in the Store

15. Be loyal. Pick one grocery store and one drugstore you go to frequently. “Sign up for their loyalty programs and get familiar with the promotions they run and what rewards they give out,” says Nelson. Understanding the program will help you concentrate your efforts so that you can get items for free, she notes.

16. Learn the layout. The more aisles you walk down, the more likely you are to add things to your shopping basket that you hadn’t initially intended to buy. Shoppers who decreased the number of aisles they visited checked out with only half their items being unplanned purchases vs. 68% of items for those who visited most or all aisles in a shop, according to a Marketing Science Institute study.

17. Go alone. The larger your shopping party, the more likely you are to make impulse purchases. About 65% of the items in our baskets when we group shop are unplanned, an eight percentage point increase over shopping alone, according to that same Marketing Science Institute study. So leave your spouse and your kids behind.

18. Pack mints. Or eat before you go. A study in the Journal of Consumer Research found that consumers are likely to spend more if their appetites have been stimulated beforehand. That’s probably why baked goods and rotisserie chickens are placed by the entrance of the store. Combat those tempting odors by eating a mint—which satiates hunger and can help overwhelm other scents—or by making sure your belly is full.

19. Bring your own soundtrack. Studies show that stores play music with a slower beat to encourage you to move more slowly through the aisles. That slower pace can lead shoppers to buy 29% more, found Martin Lindstrom, author of Brandwashed: Tricks Companies Use to Manipulate Our Minds and Persuade Us to Buy. Create your own mix of upbeat songs.

20. Use a Goldilocks cart. Lindstrom told CNBC that doubling the size of a cart makes people buy 40% more. And opting for those handheld baskets can be equally dangerous. A study from the Journal of Marketing Research found that the strain of carrying the basket made us more likely to pick up “vice products” like candy and soda as an unconscious reward for putting up with the hassle. Opt instead for a smaller wheeled cart.

21. Look high and low. Avoid the middle shelves and end caps. Companies pay to place products at your eye level—and your kid’s. Scan the top and bottom shelves instead as most of the time you’ll find the less expensive brands and best deals there.

22. Check yourself out. Impulse purchases dropped by 32% for women and about 17% for men when shoppers used the self-checkout line instead of a staffed checkout, found a study by IHL Consulting Group. The reason: There is less merchandise for you to pick up last minute around self-checkout stands, and the wait time is typically shorter—giving you less time with those tempting items.

Save on Specifics

23. Skip the deli. Whether you’re buying freshly cut meats from behind the deli counter or pre-sliced by the hot dogs, you’re spending more on cold cuts than you need, according to Steve Economides, who instead opts for large chunks of prepackaged meat called chubs. He then asks the deli or the butcher to slice the chubs for him. “At the deli, I can get a pound of ham for $7 to $9,” says Economides. “If I go to the meat counter and have a chub of ham sliced, it costs between $3 and $5 a pound, meaning I can save up to 66%.” You could also cook up larger portions of a meat, say a roast beef, and slice up those extras for sandwiches.

24. Do your own slicing and dicing. Prepackaged and single-serving foods are easy mark-up territory. (Example: Through New York City’s Fresh Direct delivery service, we found a cut and cored pineapple cost $5.99 while an uncut pineapple cost $3.99.) Though it may be more time-consuming, buy the whole chicken, block cheese or pineapple and do the chopping yourself. You can create your own smaller servings—say, for school lunches—by dividing up the food into baggies or Tupperware.

25. Don’t get milk at the supermarket. Moo juice sold at drugstores and convenience stores typically costs 30¢ to 50¢ less per gallon, Teri Gault, founder of TheGroceryGame.com, told Reader’s Digest.

26. Grow your own herbs. Stop buying bundles of herbs—at $2-plus a pop—that you’ll never be able to use up in time and instead plant a couple pots with fresh herbs to keep in your kitchen or porch. For a one-time cost of around $5, you’ll always have fresh herbs ready, and you won’t end up wasting any.

27. Follow the produce cycle. “You can save 30-50% on the price of produce by buying what’s in season,” says Annette Economides. If you do want those berries in the off-season, buy extra when they’re cheap and freeze them so you can enjoy them year round. For a guide to when certain produce is in peak-season, see this chart from the USDA.

28. Check seafood labels. At the counter you’ll find products labeled “previously frozen” in small type. That product is often the same thing you can find in the frozen-food aisle for as much as 40% less. Buy frozen and do the thawing yourself. Your fish will be fresher and you won’t have to use it right away.

29. Get meat in bulk. Washington-based Zaycon Foods offers consumers very competitive rates—e.g. chicken breast for $1.79 a pound—for those willing to buy orders starting at 40 pounds. To get these deals, you’ll have to order online and then pick your food up at a prearranged time from the back of a refrigerated truck waiting in a church or shopping center parking lot. Can’t store 40 pounds of meat? Split it with a friend, and you’ll both save.

Read next: Amazon Will Start Delivering Fresh Groceries in New York Today

MONEY online shopping

3 Reasons Google’s Same-Day Shipping Looks Like a Game Changer

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Nick and Laura Allen—AP

Google already dominates search. If the big expansion of a same-day shipping service proves successful, it could be on its way to dominating online shopping too.

On Monday, Google announced that the express online shopping-and-shipping service it has been testing for months in northern California and parts of Los Angeles and New York City is expanding to three more cities: Boston, Chicago, and Washington, D.C. The service, originally dubbed Google Shopping Express and now shortened to just Google Express, allows shoppers to place orders online or via mobile device with partner retailers such as Walgreens, Costco, Staples, Barnes & Noble, and Sports Authority. Google promises same-day shipping on all such orders, at a cost of $4.99 per delivery or flat subscription plans of $10 monthly or $95 a year.

Former Google CEO Eric Schmidt mentioned this week at a conference that Google’s biggest rival isn’t Yahoo or Bing but is in fact Amazon.com, and the expansion of Google Express into Amazon’s online shopping turf is a clear indication that Google takes this rivalry very seriously. While Amazon is still the most dominant player in e-retail, Google’s newly expanded service is arguably superior and a better value compared to anything Amazon currently offers. Here are three reasons why Google’s service is particularly compelling:

1. Same-day delivery that’s “free.” Consumers increasingly demand free shipping with online purchases. Things have gotten to the point that free shipping is so readily available—via a coupon code here or reaching a minimum purchase threshold there—that the idea of paying for delivery can now be a deal breaker.

Thus far, the phenomenal success of Amazon Prime has most clearly demonstrated the power of shipping when it’s not only reliably free but speedy as well. Prime subscribers receive free two-day shipping on most orders placed via Amazon.com, and the service has proven so popular and indispensable that enrollment numbers have continued to climb even after prices rose recently from $79 to $99 annually.

Overnight and same-day shipping are more costly services than two-day delivery, however, and Amazon Prime members must pay extra for these expedited options—typically $5.99 for same-day shipping, where and when it’s available. That’s on top of an annual subscription fee.

Like Amazon Prime, Google Express is available via subscription, priced at $95 per year (just a smidge under the cost of Prime) or $10 per month. Members then get free same-day delivery of all orders with a minimum purchase of $15. (As an alternative, nonsubscribers can pay a flat $4.99 delivery fee per order.) One of the big differences between Amazon Prime and Google’s subscription service is that the former includes two-day shipping at no additional charge, whereas the latter covers same-day delivery. Prime has many other benefits—free video streaming, for instance, not to mention a much broader selection of products than Google’s service—but in terms of speedy shipping, Google Express has the edge.

Bear in mind that you’re paying for whichever service you choose. These services are presented as featuring “free” shipping, but that’s silly. Subscribers pay a membership fee to cover the costs of shipping, and there’s nothing free about it. “Prepaid” may be a better way to describe the shipping offered by these services. A subscription is a potentially good value in the same way that an all-you-can-eat buffet is a smart buy for someone who eats (or orders online) a lot, but it can be a waste of money for others.

2. Same-day delivery of stuff you actually need that day. Based on the success of Amazon Prime, plenty of consumers are more than OK with two-day shipping on the vast majority of online purchases. After all, when you’re buying a new TV, or a winter coat, or batteries or coffee pods or a Christmas gift for your aunt, or any other thing you might purchase at Amazon, there are generally no pressing needs that might require you to be in possession of them on the very day you place the order.

Likewise, same-day shipping would seem to be less of a necessity for the products typically purchased from Google Express partners such as Sports Authority, Guitar Center, and Toys R Us. It’s often a different story, though, for the goods one needs from drugstores and supermarkets, because when you need cold medicine or diapers or food on the dinner table, you tend to need them right away—not two days after placing an order. The normal approach in these situations is to handle the errand the old-fashioned way, by making a physical run to the store. But because Google Express’s early partners include Walgreens and grocery chains such as Giant, Stop ‘n Shop, and Whole Foods, these kinds of everyday errands can be crossed off your list quickly online, without even the need to pay extra for same-day delivery. (Same-day delivery from another Google partner, 1-800FLOWERS.com, is probably even more of a necessity among certain shoppers on certain anniversaries and birthdays.) For the sake of comparison, Amazon has already introduced an online grocery service in select markets with same-day and overnight delivery, but its subscription runs $299 per year.

3. Same-day delivery on stuff that’s a hassle to buy in person. Another intriguing partner of Google Shopping Express is Costco. The warehouse membership club giant is beloved by bulk-size-loving patrons, yet much about the shopping experience is less than ideal—starting with the huge size of much of its merchandise and ending with the absence of shopping bags for carrying one’s purchases. What’s more, Costco has had some trouble attracting younger customers because fewer millennials have cars, which are all but necessities for any Costco shopping trip, and they tend to want to live in urban areas rather than the suburbs where most Costcos are located.

Many of these issues disappear when Google and its same-day delivery service enter the equation. If Google is handling the pickup and delivery, customers no longer have to worry about being strong enough to maneuver gigantic tubs of laundry detergent into shopping carts, then into one’s car. Heck, there’s no need for a car at all because, again, Google is taking care of the shipping.

While Google’s service is still in its infancy, it’s probably being helped greatly by the fact that that a popular retail brand like Costco is a partner. But who knows: Down the line, it could be that Costco membership numbers rise because same-day delivery is available via its partner, Google Shopping Express.

Read next: Google Express Expands its Same-Day Delivery Reach

MONEY groceries

Walmart Tests New Drive-Thru Concept in Match Made in Heaven

Honey Boo Boo and her family go Extreme Couponing
If Walmart's pickup grocery option is successful enough to spread around the country, Honey Boo and other shoppers will be able to retrieve groceries without having to go inside stores. Jason Winslow—Corbis

It's now possible to go grocery shopping at Walmart without leaving your car.

This week, Walmart started testing a new concept called Walmart Pickup – Grocery, a service that allows customers to order online from a selection of 10,000 grocery and household products and schedule a pickup time for as little as two hours or as far as three weeks in the future. The experiment is taking place at a Walmart warehouse in the northwest Arkansas town of Bentonville, where Walmart is headquartered.

By launching the concept, Walmart joins a long list of grocery services all created with the common goal of basically eliminating the need to “go” grocery shopping by actually strolling through store aisles. We’re talking about online grocery delivery options from the likes of Amazon and Instacart, as well as drive-thru and pickup services akin to what Walmart is doing, via more established players such as Relay Foods and Peapod, which work with local supermarkets and often also offer delivery. For all of the above, the big selling point is convenience, saving shoppers the time and hassle involved in the boring but necessary task of gathering of groceries.

Walmart is only testing the service in one location, but the move is noteworthy nonetheless because it’s the world’s largest retailer here dipping its toes into what many see as the future of grocery shopping. And rest assured that Walmart is learning from the experiment, and that if it’s successful, shoppers will see the pickup option spread around the country.

“Certainly I know there are folks that are thinking about that and trying to figure out ways to meet the customer’s ever changing demands,” Mitch Fevold, the grocery manager at the Walmart where the test is taking place, said to a local TV station.

Fevold explained that after customers place their order and schedule a pickup time, they pull up to a large drive-thru area with a roof overhead that bears some resemblance to a gas station. Instead of a gas pump, the customer finds a touch screen kiosk, which he taps to alert store staffers that he’s arrived and ready for pickup. “The groceries are then loaded up and the customer would actually have the opportunity to review fresh products,” Fevold said.

At least in this test case, Walmart’s pickup service is being run out of a “click-and-collect” facility, a warehouse-type building where only employees are allowed inside, rather than at a Walmart retail location that welcomes shoppers. The concept is very similar to the Zoomin Market, a drive-thru-only grocery store concept opened earlier this year in Kansas.

Also interesting: For now at least, Walmart’s service is offered at no charge above the cost of the customer’s order. That’s how competing services like Peapod worked originally too. But as of early September, Peapod, which works with large supermarket chains such as Stop & Shop and Giant, instituted a $2.95 fee for store pickup, with a minimum order of $60. Alternately, customers can opt for a membership pass granting unlimited pickup and delivery, ranging in price from $39 for three months to $99 for a year.

MONEY groceries

WATCH: Market Basket is Still a Mess

Market Basket's situation keeps getting worse with many employees off the job in protest, customers angry at shopping disruptions and some suppliers ending their relationship with the grocery store.

MONEY Shopping

Why Dollar General and Dollar Tree Both Want to Buy Family Dollar

An unusual kind of price war is rocking the world of dollar stores, with two suitors seeking to buy out the same competitor. As you might imagine, a lot of dollars are involved in the competition—nearly $10 billion.

Three weeks ago, when Dollar Tree bid to buy Family Dollar for $8.5 billion, it seemed like more or less a done deal. On Monday, however, the biggest player in dollar stores, Dollar General, offered its own bid for Family Dollar, reportedly in the neighborhood of $9.7 billion. One way or another, it looks like one giant dollar store company will emerge after one of these bids is accepted.

But why are these companies involved in this unusual breed of “price war”? And what does it say about the low end of retail that either of these colossal mergers would make sense?

The dollar store has been one of the great success stories of the recession era, with chains such as Dollar Tree, Family Dollar, and Dollar General posting record sales figures, broad expansions, and soaring stock prices over the past half-dozen or so years. Ironically, though, the merger may be a sign that the era of rampant dollar store growth is plateauing, even while many household finances remain pinched and dollar store shopping continues to be popular.

Here’s a look back at the recent evolution of the dollar store, with a particular focus on why many shoppers have come to view them as handy neighborhood general stores—and not just for cheap stuff.

The Great Recession destroyed shopper budgets. In the late ’00s, the housing bubble burst, the stock market crashed, and the jobs market took an ugly turn. All of the factors combined meant that the free-spending habits developed by consumers in the preceding years would have to be broken and replaced by new strategies to live cheaply. The much-heralded demise of conspicuous consumption spelled trouble for products like GM’s Hummer, but it also meant boom times for low-price retailers—dollar stores especially.

With little money to spend, especially if they’d cut up their credit cards as many had in a move to a cash-only existence, consumers stretched what few dollars they had at dollar stores. Consequently, dollar stores flourished. Dollar General doubled its store locations in the first decade of the millennium, for instance. According to one study, by 2011 there were more dollar stores than drugstores in the U.S.

Dollar stores pushed one-stop shopping. Shrinking American household budgets helped the rise of dollar stores. So did the broad campaign by dollar stores to push beyond the idea that they were good only for junky throwaway trinkets, off-brand canned goods, and anything else that had grown stale on the shelves of mainstream stores.

Among the goods shoppers started seeing more of at dollar stores are groceries, home decorating items, and even beer and wine. In some cases, dollar store offerings have been celebrated as surprisingly chic: A New York Times columnist wrote about his adventures decorating his apartment with dollar store purchases, while the 99-Cent Chef developed a following based on recipes that use ingredients purchased only at 99¢ Only stores. According to one survey from 2010, 18% of shoppers said that they were buying food and drinks for holiday parties at dollar stores.

Chances are, they were also buying wrapping paper and some stocking stuffers at dollar stores too. And that’s the point. When a shopper can buy fresh bread, produce, a gallon of milk, birthday cards, laundry detergent, shampoo, Christmas presents, and maybe a few bottles of cheap Chardonnay at the dollar store, there’s less need to hit the supermarket, liquor store, drugstore, or big box retailer. Dollar stores have been actively promoting themselves as one-stop shopping options with almost anything you need to buy—and with more locations and a smaller, easier, more manageable layout than, say, the nearest Walmart.

They’re not as cheap as you think. While there are undoubtedly some great bargains at dollar stores, shopping experts also advise against the purchasing of certain items there. Like, say, electronics and pots and pans. If you’re surprised that dollar stores even have such items, bear in mind that oftentimes, not everything in a dollar store is priced at $1. Dollar Tree has stuck to $1 pricing for everything in its stores, but Family Dollar and Dollar General don’t bother abiding by the $1 price rule. Among other items, the Dollar General website lists a Craig Android tablet for $78 more than $1.

Dollar stores employ the age-old strategy of drawing shoppers in with bargains and hoping that they grab some other (non-bargain) goods while they’re at it. A Family Dollar spokesperson told the New York Times columnist mentioned above that low-priced cleaning supplies were “almost like the gateway product” for dollar store shoppers. “It starts with cleaning goods,” he said, “and ends up with a bedspread.”

Or perhaps a tablet, or a bottle of wine—which will also cost more than a buck ($2.99 and up, usually, when available.) Shopping centers have been embracing dollar stores in their slight turn upscale because they’re able to attract slightly better-off clientele. But budget-conscious consumers must be careful: In many cases, dollar stores charger higher prices per unit than what’s to be found at Walmart, Target, or a warehouse club such as Costco. It’s just that dollar stores seem like bargains because the items are low quality or they come in exceptionally small sizes. A few weeks ago, a controversy was stirred up when Dollar General offered a special on diapers in “all counts and sizes” that Walmart and Target failed to match, even though they have price matching policies. Why? Because Walmart and Target offer diapers in far bigger sizes than what’s available at dollar stores.

Speaking of Walmart and Target, they’ve slowly been rolling out a counteroffensive to dollar stores by way of smaller retail locations, often in the densely populated urban hubs where dollar stores are ubiquitous. Supermarkets have entered the battle too, with stores that are half the size of the usual grocery shop. The smaller size means these stores can easily fit in a strip mall or city block, making them a lot more convenient and practical for millions of shoppers.

So now we have a situation in which dollar stores do what Walmart and Target do best by stocking groceries, electronics, and a little bit of everything, and Walmart, Target, and grocery chains do what dollar stores do best by offering small, convenient locations (and more of them) and many bargain-priced goods. The retail lines are blurring. Every player wants to be the convenient, one-stop shopping destination for shoppers, and it has gotten much tougher for a dollar store or any retailer to stand out. When it’s hard to differentiate yourself in the marketplace, and it’s hard to grow, it’s probably time to combine with someone in the same boat to help you compete.

That’s what seems to be why both Dollar Tree and Dollar General want to buy Family Dollar. In today’s ultra-competitive marketplace, a merger represents their best chance to grow, or at least survive.

TIME Retail

This Company Wants to Kill Your Supermarket

Aisle at supermarket with shopper and shopping cart
Aisle at supermarket with shopper and shopping cart Diana Angstadt—FlickrVision

Farmigo, a small farm-delivered food service, has an audacious dream

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

Benzi Ronen thinks that the supermarkets’ time is up. And his company is just the thing to speed up its demise.

“Our goal is to make the supermarket obsolete from a fresh perspective,” Ronen says.

Farmigo, his five-year-old 30-employee startup, sells produce and other products like milk and cheese purchased directly from farmers for 10%-20% less than equivalent grocery store items. He does it by shrinking the supply chain, essentially taking out the middleman. Users place an order online; the order is fulfilled by a farmer who transports it to a centralized packing hub; and then Farmigo delivers it to community drop-off points for the customer to pick up. This all happens within 48 hours.

“We don’t have a retail store,” Benzi explains. “We get rid of all of that. We source just in time.” That means there’s no waste and produce is brought directly from harvest.

Other sellers, such as Fresh Direct, also cut out the physical store. But Ronen argues that they’re just an extension of the supermarket model, with similar warehouses that keep a huge inventory on hand. By contrast, Farmigo’s hubs are filled exclusively with product that’s just been delivered by farmers and is going out for delivery.

“Our entire food system is based on economies of scale,” he explains, adding that it has contributed to the hub-and-spoke distribution model in which food travels hundreds of miles and can sit on shelves for weeks. “You don’t get fresh in supermarkets, and you also have waste,” he says.

For the rest of the story, please go to Fortune.com.

 

MONEY E-Commerce

3 Ways Walmart Is Trying to Out-Amazon Amazon

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Okko Oinonen/GalleryStock

Walmart might look like the sleeping giant of e-commerce, but it has one surprising advantage in the online space.

On Monday, Walmart announced a major overhaul of its e-commerce offerings. The brick-and-mortar Goliath plans to add new features to its website in the coming months, including more personalized product recommendations, discounts available in the user’s local store, and significantly faster check-out. The moves are presumably aimed at making Walmart more competitive online with Amazon, the other dominant force in American retail.

Walmart still dwarfs Amazon in terms of total revenue, having pulled in $473 billion in 2014 compared to Amazon’s mere $60.3 billion. But Walmart’s been woefully slow to embrace online commerce, a realm where Amazon outsold the biggest-box retailer seven-to-one last year. And the larger trends have to concern the executives in Bentonville: E-commerce in the U.S. grew at about six times the rate of conventional retail over the past year.

On the other hand, Walmart is hardly the sleeping giant that it’s often portrayed as. A closer look at the company’s moves in recent years reveals a slow but consistent effort to catch up to Amazon’s online offerings. That effort is starting to pay off: Walmart’s online sales grew 30% in the 2013 fiscal year, to $10 billion. (Amazon’s online sales started at a much higher number, but grew “only” 20% during that time.)

Meanwhile, Walmart may have an ace in the hole — in the form, ironically, of its 4,900 U.S. retail outlets. Generally seen as a symbol of Walmart’s lumbering inability to adapt to the digital world, those stores may prove to be Walmart’s one big advantage in the online space.

Here are three ways Walmart is trying to turn up the heat on its major e-commerce adversary.

1. A Better Online Experience

Walmart’s Monday announcement was entirely web-centric, and focussed on an area that has long been one of Amazon’s great strengths: usability. Amazon pretty much invented one-click shopping, and has the patent to prove it. Meanwhile, users of Walmart’s old site had to go through six pages before they were allowed to click the buy button. That’s not how you win customers from the market leader. The new Walmart site, which is being rolled out gradually (about half of Walmart.com’s visitors have been using a portion of its new features), makes major strides in this area by turning the buying experience into a simple, one-page process.

Walmart will also be introducing a custom recommendation engine that serves users with customized product suggestions based on past searches, purchase history, and location. This personalization even extends into the brick-and-mortar stores by showing customers deals and coupons that they can cash in at nearby Walmart locations.

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Walmart’s new site is trying to let you buy what you want in as few steps as possible.

2. Same-Day Delivery

Amazon, eBay, and other e-retailers know their next big opportunity for growth — and the one huge disadvantage they face vis a vis brick-and-mortar stores — is the human desire for instant gratification. Overnight delivery is great, but if your iPad/TV/groceries are just a five-minute drive away, even the next day can seem like too long to wait. As a result, Amazon has been spending through the nose to build the infrastructure necessary to make same-day delivery a reality. Already, Bezos and Co. offer it in 12 metro areas.

That might sound like a lot, but Walmart has the potential to put Amazon’s same-day coverage to shame. The chain has thousands of locations across the country, and has long advertised a “Site-to-Store” feature that allows customers to order online and then pick up their order at a nearby Walmart location right away. Lately, the company has been putting increased effort behind this hybrid digital/conventional form of retail: The number of products available for same day pick-up has tripled in the past 18 months. And having a store with an actual cashier also means Walmart customers who purchase online can choose to pay for their order in cash.

If the item isn’t on shelves at the moment, Site-to-Store also replicates (and pre-dates) one of Amazon’s most useful features, Amazon lockers, by allowing customers to order nearly any item and have it delivered to a store location.

So why isn’t Walmart dominating when it comes to delivery? Well, it turns out that executing on the promise of same-day delivery isn’t so easy. Amazon Prime typically still beats Walmart shipping times on all but a select few products. But Walmart is getting better. The chain has rolled out traditional save day delivery in an increasing number of test markets, and according to spokesman Dan Toporek, has begun building out its next-generation order-fulfillment network in which online fulfillment centers work in concert with distribution centers and stores that are set up to deliver web orders to create shorter delivery times.

3. War For Your Groceries

While everything from calling a cab to shaving has been disrupted by an online ordering model, stocking up on groceries has remained a chore most of us still have to do in person. But Amazon and Walmart have been one-upping each other in recent years to change that. Amazon made the first move, having launched AmazonFresh in 2007, enabling customers to order meat, veggies, and comestibles the same way they would a new printer. Initially available only to those in the Seattle area, Fresh has expanded into Northern and Southern California.

But Walmart has battled back with Walmart To Go, which the company tested in San Francisco for three years and recently expanded to the Denver area. What’s more, To Go has at least one advantage that Amazon can’t yet offer: Shoppers can order online and then pick up in stores. Walmart claims this as a real competitive advantage: Fifty-five percent of those surveyed supposedly told the retailer that they prefer to pick groceries up themselves so they can grab any forgotten items on the way through the checkout.

Still the Underdog… For Now

Make no mistake, Amazon is still king of the online retail space, and looks likely to retain its crown for the foreseeable future. But Walmart’s online redesign and roll-out of Amazon-like features that leverage its army of stores, make it a force that no one can ignore, especially as Amazon looks less focussed than ever on its core e-commerce business.

Either way, when two giants like Amazon and Walmart fight, the consumer tends to win.

MONEY Shopping

Why We Spend So Many of Our Dollars at Dollar Stores

99 cent sign
joeysworld.com—Alamy

And why the $8.5 billion Dollar Tree–Family Dollar deal is probably a sign that the dollar store's heyday is coming to an end

The dollar store has been one of the great success stories of the recession era, with chains such as Dollar Tree, Family Dollar, and Dollar General posting record sales figures, broad expansions, and soaring stock prices over the past half-dozen or so years. Now that Dollar Tree is purchasing Family Dollar for $8.5 billion, it appears as if the era of rampant dollar store growth is plateauing, even while many household finances remain pinched and dollar store shopping continues to be popular.

How did we get to the point where such a colossal merger would make sense? Here’s a look back at the recent evolution of the dollar store, with a particular focus on why many shoppers have come to view them as handy neighborhood general stores—and not just for cheap stuff.

The Great Recession destroyed shopper budgets. In the late ’00s, the housing bubble burst, the stock market crashed, and the jobs market took an ugly turn. All of the factors combined meant that the free-spending habits developed by consumers in the preceding years would have to be broken and replaced by new strategies to live cheaply. The much-heralded demise of conspicuous consumption spelled trouble for products like GM’s Hummer, but it also meant boom times for low-price retailers—dollar stores especially.

With little money to spend, especially if they’d cut up their credit cards as many had in a move to a cash-only existence, consumers stretched what few dollars they had at dollar stores. Consequently, dollar stores flourished. Dollar General doubled its store locations in the first decade of the millennium, for instance. According to one study, by 2011 there were more dollar stores than drugstores in the U.S.

Dollar stores pushed one-stop shopping. Shrinking American household budgets helped the rise of dollar stores. So did the broad campaign by dollar stores to push beyond the idea that they were good only for junky throwaway trinkets, off-brand canned goods, and anything else that had grown stale on the shelves of mainstream stores.

Among the goods shoppers started seeing more of at dollar stores are groceries, home decorating items, and even beer and wine. In some cases, dollar store offerings have been celebrated as surprisingly chic: A New York Times columnist wrote about his adventures decorating his apartment with dollar store purchases, while the 99-Cent Chef developed a following based on recipes that use ingredients purchased only at 99¢ Only stores. According to one survey from 2010, 18% of shoppers said that they were buying food and drinks for holiday parties at dollar stores.

Chances are, they were also buying wrapping paper and some stocking stuffers at dollar stores too. And that’s the point. When a shopper can buy fresh bread, produce, a gallon of milk, birthday cards, laundry detergent, shampoo, Christmas presents, and maybe a few bottles of cheap Chardonnay at the dollar store, there’s less need to hit the supermarket, liquor store, drugstore, or big box retailer. Dollar stores have been actively promoting themselves as one-stop shopping options with almost anything you need to buy—and with more locations and a smaller, easier, more manageable layout than, say, the nearest Walmart.

They’re not as cheap as you think. While there are undoubtedly some great bargains at dollar stores, shopping experts also advise against the purchasing of certain items there. Like, say, electronics and pots and pans. If you’re surprised that dollar stores even have such items, bear in mind that oftentimes, not everything in a dollar store is priced at $1. Dollar Tree has stuck to $1 pricing for everything in its stores, but Family Dollar and Dollar General don’t bother abiding by the $1 price rule. Among other items, the Dollar General website lists a Craig Android tablet for $78 more than $1.

Dollar stores employ the age-old strategy of drawing shoppers in with bargains and hoping that they grab some other (non-bargain) goods while they’re at it. A Family Dollar spokesperson told the New York Times columnist mentioned above that low-priced cleaning supplies were “almost like the gateway product” for dollar store shoppers. “It starts with cleaning goods,” he said, “and ends up with a bedspread.”

Or perhaps a tablet, or a bottle of wine—which will also cost more than a buck ($2.99 and up, usually, when available.) Shopping centers have been embracing dollar stores in their slight turn upscale because they’re able to attract slightly better-off clientele. But budget-conscious consumers must be careful: In many cases, dollar stores charger higher prices per unit than what’s to be found at Walmart, Target, or a warehouse club such as Costco. It’s just that dollar stores seem like bargains because the items are low quality or they come in exceptionally small sizes. Just last week, a controversy was stirred up when Dollar General offered a special on diapers in “all counts and sizes” that Walmart and Target failed to match, even though they have price matching policies. Why? Because Walmart and Target offer diapers in far bigger sizes than what’s available at dollar stores.

Speaking of Walmart and Target, they’ve slowly been rolling out a counteroffensive to dollar stores by way of smaller retail locations, often in the densely populated urban hubs where dollar stores are ubiquitous. Supermarkets have entered the battle too, with stores that are half the size of the usual grocery shop. The smaller size means these stores can easily fit in a strip mall or city block, making them a lot more convenient and practical for millions of shoppers.

So now we have a situation in which dollar stores do what Walmart and Target do best by stocking groceries, electronics, and a little bit of everything, and Walmart, Target, and grocery chains do what dollar stores do best by offering small, convenient locations (and more of them) and many bargain-priced goods. The retail lines are blurring. Every player wants to be the convenient, one-stop shopping destination for shoppers, and it has gotten much tougher for a dollar store or any retailer to stand out. When it’s hard to differentiate yourself in the marketplace, and it’s hard to grow, it’s probably time to combine with someone in the same boat to help you compete. That’s what seems to be happening with Dollar Tree’s purchase of Family Dollar.

MONEY Workplace

Meet America’s Most Beloved CEO—Too Bad He Just Got Fired

120723_FF_MarketBasket_1
AP

After the wealthy CEO of a supermarket chain was fired, thousands of workers walked off the job in protest—some getting fired themselves. What's up with that?

Workers understandably tend to go on strike or protest for selfish reasons—more pay, better benefits, improved working conditions. Over the last week in New England, however, thousands of employees at Market Basket, a supermarket chain with 71 stores in New Hampshire and Massachusetts, have been sticking their necks out (and in some cases putting their jobs on the line) in support of Arthur T. Demoulas, who was the company CEO until he was fired in June.

Rallies pushing for “Arthur T.” to be given his job back were held at the Market Basket headquarters in Tewksbury, Mass., on Friday and Monday, drawing upwards of 5,000 protestors. Meanwhile, the shelves of many Market Basket locations have gone barren, as there are too few employees still on the job to stock them. At least eight employees were fired over the weekend related to the protests.

“I have no regrets—I would do it all over again, and I leave the company I love with my head held high in the knowledge that there wasn’t a single thing more that I could have done,” said Tom Trainor, a Market Basket district manager who was one of the leaders of the protest, and who was fired, according to Boston Magazine. “I knew the risk but I also knew that I was fighting for something much bigger than myself. I was fighting for my family, for Arthur T. Demoulas, a man that I have tremendous respect, loyalty, and admiration for.”

In an era overrun with CEO hate and 1% bashing, such comments—and the actions of all those who have put their jobs in jeopardy—are nothing short of astonishing. When CEOs are in the news nowadays, it’s often because of things like their astronomical pay packages, or that they’ve insensitively laid off thousands of employees in a memo.

The backstory of how Arthur T. Demoulas was ousted in June, alongside a pair of other experienced high-level executives for the family-owned company, is a complicated tale. The CEO was fired by a board led, believe it or not, by his cousin, Arthur S. Demoulas. Apparently the family has been feuding about control of the business for years, with the battles for power including tactics that seem like they would only be found in fiction—fake identities, secretly taped meetings, and more.

Amid the struggles for control, it’s overwhelmingly clear where employee loyalty lies. Arthur T. was known for treating employees, who were not unionized, particularly well, with good benefits and above-average pay. More important, he was renowned as something exceptionally rare in high-power executive ranks: He’s just a good guy. During the rallies, employees spoke often about Arthur T. always having time for his workers, including frequent attendance at their family weddings and funerals.

“He’s George Bailey,” Trainor explained to the Washington Post, comparing Arthur T. Demoulas to the beloved savings-and-loan manager played by Jimmy Stewart in It’s a Wonderful Life. “He cares more about people than he does about money.”

That’s probably not something they teach in business school. Nonetheless, several academics have been monitoring the Market Basket situation, and they’ve noted that many lessons can be learned about how the controversy is playing out. Michael Roberto, a management professor at Rhode Island’s Bryant University, wrote that “every CEO should wish that his or her employees would stand up so forcefully for them even at great personal risk.”

The board that ousted Arthur T. and fired the employees leading protests, on the other hand, seems to have its priorities wrong, and seems tone deaf to how this plays with the public. “The Board has badly miscalculated by firing managers who objected to the CEO’s dismissal. It only added fuel to the fire,” noted Roberto. They also drastically underestimated the importance of maintaining company values and low employee turnover, Roberto wrote.

Market Basket’s current leadership has defended its actions in a few statements released to the media this week. “The individuals who were terminated took significant actions that harmed the company and therefore compromised Market Basket’s ability to be there for our customers,” read a statement from co-CEOs Felicia Thornton and James Gooch. A later statement urged employees to return to work, according to the Boston Herald:

“We strongly encourage all associates to return their focus to Market Basket’s customers, their needs and expectations,” co-CEOs Felicia Thornton and James Gooch said in a statement. “We understand the strain and emotion facing Market Basket associates. … We are committed to earning the trust and acceptance of our associates and Market Basket’s customers and hope that our associates will judge us not on our promises, but on our actions as we move forward.”

Nonetheless, the situation appears to be damaging Market Basket’s relationship with employees and customers alike, who naturally sympathize with their middle-class peers who have walked off the job to support a beloved good-guy CEO. And one who, Boston columnists have noted, has made sure over the years that groceries are fresh, of good quality, and priced low. As of Wednesday, the Save Market Basket Facebook page, in support of Arthur T., had close to 60,000 Likes, more than double the total one week ago.

“The employees and the customers — they see themselves as the organization,” Daniel Korschum, a marketing professor at Drexel University, explained to the Washington Post. And they therefore feel a sense of ownership and responsibility for Market Basket. “The board and the new CEOs are seen as the outsider. It’s the exact opposite of what you usually see.”

Risking one’s job to save that of your boss, rather than going about your business or even pumping your fist when a high-paid CEO gets canned—that’s also the exact opposite of what we expect to see. But under the current circumstances at Market Basket, things make more sense.

“It’s been a very difficult time for the hard-working associates of the company this past few weeks,” Arthur T. Demoulas said on Monday, after remaining mostly quiet regarding the protests, according to the Boston Globe. He called for the company to rehire the employees who were fired, immediately. “I love these people very much.”

Another rally in support of Arthur T. Demoulas is planned for Friday, again at the company headquarters in Tewksbury, Mass.

MONEY My Money Story

LISTEN: I Got Paid to Iron Shirts While a Stranger Watched

My Money Story is a biweekly podcast. We tell one person's story of overcoming an obstacle (big or small) to achieve a dream - or simply pay the rent.

Julie Staadecker was 20-years-old, studying at Boston University and broke. To make some extra cash, she would pick up odd jobs — like catering or moving furniture. One day she stumbled across a job asking for a shirt iron-er, which turned out to be the most bizarre odd job she’s ever had.

Music: “Try This On For Size,” by Brian Wayy and “Hipnotyzed,” by Kojo Linder

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