2011 Monthly Expenses Assessment... Part 3... Groceries, Gas, and Reward Points

So in my last post, I found reviewing our monthly household basic expenses excluding groceries and gasoline, I was unable to really make a dent in saving more money unless I changed up the services and packages or completely eliminating the service altogether.

I did manage to eke out a few dollars updating existing packages in cable and phone services just by cancelling some items we do not find we are using to justify paying for it monthly. From Shaw Cable, I saved $27.95 per month by eliminating movie channels, misc. channels, and time change channels; with Telus, I saved $30.00 per month by updating my high speed internet service and cancelling add-on features like voice messaging and long distance minutes. An annual savings of $695.40 just by eliminating services we were not using much of anyways!

Hardly the $643.80 PER MONTH I was looking for... but a further look at the monthly bills and some research on the Net, I noticed was paying what everyone else was paying on most of my bills taking in account for the increases over the years; and finding more savings out of these bills would involve cancelling the service altogether.

Because of inflation and the increase of more services being used, the budgeting will now have to come out of the groceries and gasoline portion of expenses. I look at these as separate from the other expenses as these two are variable: the prices fluctuate monthly due to market conditions and /or consumption levels. I am able to spend more or less on any given week..ie. stocking up on something when it is in season or on sale; or hold off buying altogether when the paycheque doesn't allow for the spending.

In researching this area of expenditure, I discovered Max Satanove's Edmonton Food Basket- a weekly comparison of locals grocers in the Edmonton area that appeared in the Edmonton Examiner for 18 years is now gone! Mr. Satenove passed away January 27, 2009 and ended his column when he stopped driving at 90 years old... for years my wife and I used that weekly column to glance where the best deals or cheapest grocery prices were... He provided a really valuable service for us consumers especially when we were spending in the $1000 range every month! And from his weekly chart, he showed that Superstore, week after week, was the clear winner in terms of price for a cart compared to Save-On Foods, Sobey's, and Safeway in the Edmonton area. RIP Mr. Satanove. I miss you already.

Following in his tradition, I have found, CTV Calgary does a monthly segment comparing prices at major Calgary grocery stores, Superstore, Sobey's, Safeway, and Co-op. Calgary, according to various websites like Numbeo.com suggest Edmonton is on par with Calgary when it comes to grocery prices.. some may vary but it balances out when it is items are compared by the cart.
See this month's grocery comparison chart here.

As with Max's Food Basket column in the weekly Edmonton Examiner, we see Superstore topping the other grocers by price comparison in CTV's Calgary grocery comparison. But, what about comparisons with Costco and Walmart?

From our own experience over the years, we too have found you get more of a cart-full of groceries at Superstore than anywhere else. Fresh produce is better quality at Save-on and Safeway while prices do reflect that. Superstore is still the king for non-perishables. Costco and Sobey's and IGA (when on sale) is better for meat purchases. Diapers and other baby necessities, condiments, snacks at Walmart are comparable to Superstore's prices. Though, I've found though Walmart may seem cheaper in price, quality and portion sizing is greatly reduced compared to Costco. Safeway always seems to be the most expensive but time to time they have some good flyer specials and customer appreciation Tuesdays (15% off 1st Tuesday of every month).

Over the past year, we have spent more time at Costco: the Superstore near we live, since their store renovations, had lowered their quality and the coupons are not as good as they were 2 years prior. We had always gone to Superstore for its free $25 gift card for spending $200; now it's a free $25 gift card for spending $250... Costco's pricing is pretty much on par with Superstore when buying meat, cleaning supplies, and other food staples and the return policy is second to none! Plus, the bulk sizing at Costco saves the consumer big time in terms of price per unit comparisons.

In our search to find more savings every week to cut back on our monthly expenses, we've found it is best to shop at different grocers and watch the flyers every week- something we have not done consistently in the last 2 years out of convenience of Costco— your one-stop shop to get most groceries, get gasoline and feed your kids with samples! Caution: Costco is not a good place to pick up only a couple of items...for some reason though prices are on par or cheaper with everywhere else on a per unit basis, one finds himself spending a lot more than planned... ie. went into Costco for peanut butter; came out with $350 worth of other stuff..and who can eat that much peanut butter??

When buying gasoline in Edmonton, it is best to shop around too. Using EdmontonGasPrices.com is a great way to find out who has the cheapest gas in our city. You will find Costco also tops the list for gas savings too- usually a 5 cent per litre difference in prices than anywhere else! Finding additional savings would have to involve taking more public transportation or alternative means of transport.

How about loyalty cards such as PC points at superstore or Costco Executive memberships? Earning rewards on everyday purchases is a great way to stretch household budgets during a recession. Canadaloyalty.com is a good database that describes the different rewards that can be earned with loyalty cards from different retailers.

The most popular reward cards seem to be: Shoppers Optimum, Airmiles, Canadian Tire money, PC Financial Pts at Superstore, and Costco Executive membership and Costco American Express, Aeroplan, Esso Extra, HBC Rewards, and PetroCanada Petro-points.

The top -rated points cards when I started collecting points were the BMO Airmiles Mosaic Mastercard, the Airmiles American Express, the Costco American Express, PC Financial Mastercard, and MNBA Shoppers Optimum Mastercard.

I have heard PC Financial points and the Costco American Express Card are the best and most popular for collecting points for everyday grocery purchases (assuming you shop at Superstore and Costco mostly as I do).

PC Financial Mastercard rewards are as such : Earn 10 points for every $1 spent; redeem at 20,000 points for $20 in groceries at Superstore and 10,000 points thereafter (so 30,000 pts for $30 of groceries). So for my weekly average grocery spending of $400, I would get 16,000 points every month plus additional specials and introductory 5000 points for signing up..estimate of 200,000 points per year equalling about $200 worth of free groceries if I were only to use the credit card for Superstore grocery purchases for example.

Costco Cash rebate American Express offers as such: 0.25% cash back on all card spending on the first $1000; 0.50% on the next $2000; and 1.0% cash back on spending over $3000 plus bonus 0.5% for balances carried over each month. Plus 2% on gas purchases up to $3000 annually and 1% on gas purchases over $3000. Using the example above of spending $400 per week, I would get about a little less than $200 per year for getting groceries but add gas at Costco- and it pretty much on par or better than the PC Financial card for yearly spending totals. The PCF Mastercard is better for lower spending levels as the Costco Amex gets better if you spend more.

But, adding the Costco Executive membership- annual 2% return up to a maximum of $500 on all Costco purchases excluding tobacco, food court, postage stamps, etc. (list here.) and you get an additional $384.00 for the same dollar amount spent on groceries; which also pays for the Costco Executive membership of $100. So, going with Costco will earn you an annual net of $517.00 compared to PC Financial's $200 for the same $400 spent per week.

I use Airmiles and Airmiles American Express and the Executive membership at Costco. Using the above example again I get 1 airmile for every $15 spent (on avg. some retailers offer 1 airmile per $10 spent) - giving me 1280 airmiles annually. Based on a redemption rate of 1125 points for a $150 Best Western Hotel gift certificate, I receive $171.00 for my annual grocery spending at Costco- much less than the PC Financial CC but add the executive membership, it works out.

With collecting airmiles, I find it helps reduce costs on our annual vacations. I did notice there is greater value for your points with airmiles when they are used for travel purchases like flights, hotels, or car rentals. A loophole I found years ago with airmiles is ordering hotel gift cards worth $100-$150, then finding the best internet pricing for hotels in lieu of ordering direct hotel stays from airmiles saved me 100's of points every year (avg. 400 points!). And using my Airmiles American Express alongside having a Costco Executive membership, what I do like is I get both airmiles and Costco points for the SAME purchases at once! It's like getting airmiles at Safeway using an Airmiles credit card- you can easily double your miles on the same purchase.

Back on the topic of finding more savings in our monthly grocery spending, I may have to switch my Airmiles Amex for the Costco rewards card.... and apply for the PC Financial Mastercard to replace the BMO Airmiles Matercard... further examination will be in order including how much I really save on hotels, etc. with the airmiles compared to cash value of free groceries.

Groceries by far and wide seems to be the most flexible way to find that extra money to save every year for our household. Yet, if one does not do his homework via clipping coupons, watching the weekly flyer, creating your own 'pricebook', weekly grocery spending can get out of hand quickly.

Other areas of cutting our monthly spending would have to come from entertainment, extra-curricular activities for the kids, eating out, and spur of the moment spending... all of which will have to be analyzed further this year in order to accomplish any of the financial goals I have set this year.... there's always Ft.McMurray.... ugh.

No comments: