How to Avoid Supermarket Rip-Offs

Keep more in your bank account on your next supermarket trip

Supermarkets are useful one-stop shops for a variety of goods. However, in case you weren’t already aware, the multi-billion-dollar New Zealand supermarket industry is dominated by two players, so we don’t have much choice when it comes to our weekly shop. The big two are:

1. Woolworths New Zealand (owner of Countdown and franchisor of the SuperValue and FreshChoice stores) and
2. Foodstuffs (the name behind New World, Pak’nSave and Four Square co-operatives)

A recent Commerce Commission report on the supermarket chains said what everybody already knows: groceries cost too much, and the lack of competition between the two major supermarket owners isn’t working well for households.

So, the next time you’re in a supermarket, here are thirteen dirty tricks to watch out for to keep more funds in your bank account.

1. Loss Leaders

Supermarkets are infamous for their specials.

Stores lure customers with weekly headline specials on staples such as cereal, milk, and bread, then raise prices on other goods to offset those “loss leaders.”

You’re unlikely to find the specials for less anywhere else. If you follow the flyers, you’ll see that staples go on sale at predictable intervals, so if you’re really committed you can stock-up and save.

2. Bogus Specials

When walking around your supermarket aisles, it's likely you'll be inundated with lots of brightly coloured signs for 'top deals', 'lowest prices ever' or other not-to-be-missed deals.

While these are supposedly products that have been reduced to a cheaper price than normal, we recommend having a good look at what the original price of the item was. In fact, Consumer NZ’s head of research Jessica Wilson is on record as saying special offers were used so frequently that the claimed savings were questionable. Wilson says, "Effectively the special price is really the usual selling price so you're not getting a genuine saving."

3. Making Comparisons Impossible

Faced with supermarket’s ever-changing and sometimes confusing pricing, it’s impossible for a customer to do a perfect job finding the best value product for the best price.

While packaged goods do normally cost more than loose items, this isn't always the case. This might totally go against your best instincts, but supermarkets rely on the fact you think this way and will often make comparing such items confusing. This is particularly the case with fresh produce like fruit and vegetables. For example, packaged tomato’s may be priced by packs of six, while the price for loose ones will be displayed in kilograms.

4. Shrinkflation

Supermarkets and their suppliers are performing shrinkflation as they face higher prices for gas and ingredients, as well as supply chain constraints.

Shrinkflation happens when consumer products get smaller in weight, size, or quantity while their prices stay the same or even increase. Most of the time they’ll keep their packages the same size, so you might not even notice.

Shrinkflation is such a well-known phenomenon it’s even trending on social media sites like TikTok.

5. Premium Products Which Aren’t So Premium

The fancy packaging of that ‘premium’ bacon may convince you it's going to be much tastier, but once it’s cooked will you really be able to tell the difference?

The packaging on supermarket premium brands is designed to tempt you into parting with a few extra dollars and cents, but keep in mind that extra cash might just be used to cover the cost of the fancy packaging.

6. Pre-chopped, Snack Size, Individually Packaged

Snack size? Kid size? Pre-chopped? Those little bags of baby tomatoes or crackers and cheese might look cute, but you’ll certainly get more for your money if you bought a full-size bag and divvied it up yourself. It’s all about the unit price.

Plus, pre-cut produce or tiny packaging has to be less eco-friendly than larger or uncut counterparts because of all the extra packaging.

7. Added Flavours

A bit like premium items, supermarkets prefer to stock a range of value-added products. Why pay a 30 percent premium for garlic prawns when you can buy the fresh prawns, spend 20 cents on garlic butter and get the same meal?

8. Bizarre Loyalty Schemes

As well as highlighting issues with competition between supermarkets, the Commerce Commission reported issues with supermarket reward schemes. Apparently, we collectively carry around nearly four million supermarket reward cards. Such schemes exist for two main reasons, to:

1. Make shoppers more loyal to one supermarket (as if they’re loyal to you!) and therefore less likely to go elsewhere to save
2. Gather data on shoppers

The commission suggested the points-based supermarket loyalty programs in New Zealand – instead of dollar-based systems – may cause us to overestimate the true value of the reward. Blinded by the promise of rewards, shoppers already faced with shelves bristling with labels like “special”, “everyday low prices”, “members discounts”, and “multi-buy/two-for-one” deals, are bewildered.

“Wow. I've earned 50 points,” a loyal shopper might think when using one of the two New Zealand chain’s loyalty schemes. Though the reward they have earned is worth just 37.5 cents. The value in cents is a lot easier to understand, and a lot less exciting.

The commission said people found loyalty schemes confusing, and even identified people “obsessed” with earning rewards.

9. Floor Layouts That Make You Spend More

An incredible amount of analysis and research goes into the layout of a supermarket. You might have noticed:

• Supermarkets playing relaxing music to slow you down
• Healthy items like fruit and vegetables come first, so you’ll feel less guilty about putting not-so-healthy foods in your trolley later
• Staple products such as bread, milk and cheese are placed at the back of the store so you’ve got to do a full lap
• Common items are dispersed across the supermarket, which means you’ve got to wheel through more aisles
• Cross-merchandising, which is where complementary products are placed together to increase the sales of both. For example, how often have you decided to buy French Onion Soup and Reduced Cream after you’ve put potato chips in your trolley?

10. Anything in the Checkout Aisle

The checkout is a minefield for the weak hearted.

Impulse items that people buy waiting in the checkout line can be marked up 100 percent. This includes soft drink bottles in the fridge near the store’s exit and the chocolates.

There’s a reason overpriced foods packaged for convenience still line the shelves, often at eye level. We’re willing to pay for the convenience! Saving on salads or produce requires enough planning ahead to buy the perishables, prepare some meals, and consume them before they go bad.

11. Health Foods

Making existing foods “healthier” is a huge goal for food and beverage companies, who recognise you naturally want to live a long and healthy life but don’t want to give up the potato chips and other food vices. Be suspicious of anything with a new wonder-ingredient which is good for your health.

Low Fat Versus Low Sugar

Hopefully, most of us have caught onto this one already:

• Products with “low fat” labels often have the most sugar!
• While foods labelled “low sugar” are often fatty!

12. Eye Level Is Buy Level

The oldest supermarket trick in the book.

The products that directly stare out at your face will be more expensive than the alternatives at your feet. Why? Food companies pay supermarkets to be placed at eye level.

13. Online Shopping

Online shopping is changing how supermarkets go about their business, it can be a way to work around some of the challenges presented above. Simply:

1. Tick the products you want
2. Enter your credit card details
3. Either wait for your delivery or pick it up yourself

A plus of online shopping is how easy it is to stick to a budget, and you have more time to weigh up any deals and compare sizes or quantities of whatever you need. However, a downside is that you can’t pick your own produce - you’ll have no guarantee you’re getting juicy or average melons.

Also, watch out for the 'allow substitutes' options – if you check such a box it means the supermarket can change parts of your order if they've sold out and replace it with something else.

Some people report being given more expensive items as replacements and only being charged for the cheaper version, but some have reportedly thrown in a pricier replacement and charge you extra.

The Bottom Line: Avoid Supermarket Rip-Offs

Being vigilant during your weekly shop can save a lot in the long run, so you can put those dollars to work elsewhere!

Even if avoiding the rip offs can save 10 percent off the average weekly supermarket bill, that’s $28 a week, $107 a month or $1,456 a year. It could equal an airline ticket to London or nicer birthday presents.