German supermarket discounts for fun and profit
I recently started buying discounted food more and here are my tips & tricks.
If you are sure that you will buy something and there happens to be a discount for it, you save money by buying with the discount.
“Expiration date” discounts
Let’s start with discounts motivated by a product reaching its expiration date. Basically all products have some expiration date. After that date supermarkets can’t sell the product anymore, i.e. they lose the money used to buy the product in the first place. Thus, they are motivated to incentivize people to buy the product before the expiration date. When there is not much time left, they create this incentive by adding a discount. Usually in German supermarkets it is 30% off and usually it is added 1-2 days before the expiration date, but occasionally this can happen even 1 week in advance.
As a result, this is a way to save 30% on some of your food. This mostly works for food with shorter storage time like meat and bread (but not e.g. canned food).
Is this safe? Yes, the food hasn’t actually expired yet. I also suspect that food producers actually have some safety margin in the expiration date. In other words they may set the expiration date much earlier to be extremely sure that the product won’t go bad before that time. This is just my speculation though. Overall, I am not aware of any safety issues with this approach. Obviously, you should inspect food you buy using all your senses and trust your self preservation mechanisms, but this applies to anything you consume.
Obviously, we can’t just store such food in the fridge for long. One example usage is to cook it soonish. Usually once you cook it, you can store it for a bit longer or you can just consume the cooked food immediately. To save even more, you can freeze such foods (this works especially well for meat). This way you can store it for couple months.
Such discounts are more frequent on Saturdays. I suspect this is because the shops are closed on Sundays, so on Saturday they have to sell all food which would otherwise go bad on Sunday and Monday. This works even better before large holidays (e.g. Christmas) presumably for the same reason.
There is the second kind of discounts. Almost all popular shops in Germany have “random” discounts which change each week. This time they are not related to the expiration date (i.e. there is nothing unusual about the products).
Ways to explain this
I have a number of hypotheses why supermarkets do this:
- This brings people to the supermarket itself.
- Once a person is there, they can lose their self control and buy more stuff (even non-discounted).
- The time spent getting to the shop can be considered as a sunk cost and promote buying more as well.
- Discount itself may promote buying more of the discounted product, i.e. “I don’t actually need this, but next week there will be no discount, so I should buy it now to get the discount”.
- Storing stuff presumably costs money. Occasionally it may be better to sell stuff with a discount than to store it. I.e. the shop may “pass” you some portion of the money they would otherwise pay for storage, but which they managed to save by you buying the stuff.
Ways to discover
There are 2 major ways to discover such discounts:
- Go to the shop itself and look for brightly colored price tags.
- Check shop’s magazines online (the German keyword is “Prospekt”, e.g. Lidl, Penny, Netto).
I definitely prefer the second approach, since it is much more efficient (takes less time and you don’t look at non-discounted products at all).
You should keep in mind that supermarkets are doing this for a long time and, thus, in the end this must be profitable for them. As a result you should be careful and make sure that you are actually the one benefiting from these discounts. I can imagine the following possible pitfalls:
- Are you able to control yourself at the shop itself and stick to buying only what you originally planned? Lists help.
- If you don’t need something in the first place, you just lose money by buying it (even when it is heavily discounted).
E.g. you never eat rice, there is no point in buying it, even when it costs 50% less this week. Instead you should focus on things you
would buy anyway. However, if your uncle loves rice and consumes 3 kilograms of it during his visits, buying rice with 50% discount
and storing it saves you money.
- There is a neat way in which you can check the magazines to avoid this issue - look only at the product pictures (but not prices) at first. I.e. if you don’t need something, don’t even check its price. Once you find something you need, check its price.
- Discount on a more expensive product may be not a discount for you.
E.g. you use shampoo A, which costs 1 euro per liter, but there is a discounted shampoo B which costs only 2 euro per liter
instead of its normal price of 4 euro. If you buy B, you actually lose 1 euro (i.e. discounted B price minus normal A price) instead of
saving 2 euro as it might have looked at first.
- Another variation of this is seasonal food price fluctuations. E.g. in winter watermelons can have a discounted price of only 0.99 per kilo instead of 1.99. However, they cost 0.4 per kilo during the season. So you still in some sense lose money when paying discounted 0.99. Obviously, if you consume watermelons all year round, you would actually save, so go for it!
- Another example could be if a shop increases the price right before having a discount. I don’t think this is intentionally done in Germany, but still worth keeping in mind especially in other countries. Usually you start remembering normal prices for main staples with time. Alternatively, if you track your expenses in great detail, you could use that info to double check the price (e.g. how much did this cost last time I bought it?).
- Different offers in magazines can apply to different dates. Yes, they like to have 5 pages with entire week discounts, followed by one page for only e.g. Mon-Wed discounts. I think this is intended, because then people may miss this and when they buy a lot of stuff in addition to discounted things (but you shouldn’t do this anyway), they will miss that they are buying without the discount. However, if you don’t buy much, just check the receipt after buying. Normally, there is a paper magazine in the shop itself, so you can double check the discounted price there (or even show it to the cashier).
- There may be no discounted price tags on Monday yet. I’ve got an impression that discounted price tags appear after some time. So if you go on Monday morning, either take the paper magazine or note down the prices you expect.
How much can I save?
This depends on you and how flexible you are. For example, Jacob from Early Retirement Extreme suggests to buy only discounted food and then decide what to cook out of it. This definitely requires quite some creativity and may be not that convenient. Alternatively you can go for some middle ground solution. For example, one can buy discounted food which can be stored for a long time. This mostly includes canned and frozen foods (already frozen vegetables/fruits or self frozen meat). Canned foods can be easily stored 1-2 years, so it is possible to buy reasonably large discounted batches and just store it and use whenever there is a need. Already frozen foods also have large lifespan, you just need a freezer and a reliable energy source. For self frozen there is no clear time bound, but its state may start to become worse after e.g. 3 months, so that’s a good rule of thumb I use. This way you still have flexibility (you can cook what you want right now), while partially benefiting from discounts available.
I observed 10-30% discounts, so if you manage to buy 100 euro of discounted food, you would save 10-30 euro. While this is not a life changing sum of money and you definitely shouldn’t rely on this discount in your FIRE calculations (otherwise the calculations are too tight, trust me), it is also not that much of an effort and can be even pleasant if you like optimizing your life.
Some people may think here that this is not worth their time, because they earn so much more than that. I’ve already looked into this (“My time costs X” fallacy). In this particular case you can check the magazines literally in 5-10 minutes and you would have to go the shop anyway (unless you order your food online, but then you have more fruitful ways to save money, for example, by not ordering food online).
Happy discounted shopping!