Mellody's Math: Is Bulk Buying Always Better?
July 19, 2004 -- Although mortgage and car payments are generally the big-ticket items in a household budget each month, groceries can add up too.
A family of four typically spends an average of $500 to $1,000 on groceries each month, according to the U.S. Department of Agriculture. The amount depends on whether they are thrifty or more liberal with their spending.
So how do you make your money go the farthest? Most consumers believe buying in bulk and bigger sizes always saves money, as evidenced by the rising popularity of warehouse shopping. However, buyer beware: this is not always the case. In fact, buying bigger can sometimes mean a bigger price tag.
Bigger Is Not Always Better
It is important to dispel a key assumption made by many shoppers. For example, a recent survey of a Chicago-area grocery store found that an individual bag of Lays potato chips costs 25 cents. However, if you were to buy the "snack pack" containing eight bags of the same chips, you would end up spending 37.4 cents per bag, which is 35 percent more.
Mellody's Math — Snack Savings: Assuming your child takes a bag lunch to school every day of the week during elementary and middle school, you would pay more than $175 in unnecessary chip costs over the period if you purchased the variety pack instead of each bag separately.
Likewise, if you buy a 60-pack of Huggies baby diapers, you pay about a penny more for each diaper than if you were to buy a 40-pack.
Mellody's Math — Diaper Dollars: Assuming an average of eight to 10 diaper changes a day, your baby will go through roughly 9,000 diapers in his or her first 2 ½ years. As such, if you purchase the mega pack of diapers instead of the standard package, you will spend an additional $72 on your baby.
Medium Money Savings
The least expensive size often falls somewhere in the middle.
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