April 2, 2009 -- There's a new way to save big on food and it's sweeping the nation: grocery auctions.
The savings are phenomenal. By bidding for groceries instead of buying them, "Good Morning America" found you can save 50 to 90 percent.
"GMA" went inside a grocery auction in New Haven, Ind. to see what this new phenomenon is all about.
There, Ken Frecker used to just auction off antiques, lawnmowers and sofas.
But when the economy tanked, the bids started drying up. So, Frecker looked for a need to fill and started auctioning food.
"We don't do a lot of advertising," Frecker said recently. "We got a lot of folks come. We'll have 400 or 500 folks tonight, so by word of mouth, it's caught on."
There were a couple hundred different foods and household supplies for sale at the auction -- surplus goods like you'd get at a discount grocery store, dinged and damaged packages, and items that are close to their expiration date.
"So far, everything I've gotten here has been of excellent quality," shopper Dinah Thomas said. "I can't complain about the quality at all."
Here's how it works: Frecker gets people bidding on an item. When the price will go no higher, that's the price everybody pays. The crowd eats the auctions up!
"They're wonderful, especially if you're raising a family," Donna Monhollen said. "Really, right now, in this day and age, this is going to be the trick."
There's always somebody who catches auction fever and bids too high because they feel like they're winning something instead of buying it. But the veterans know when to bow out.
"I just kind of know what to bid from shopping in the stores forever, and if they go above and beyond that, then I just stop," Christina Immroth said.
Saving Money, Enjoying Yourself
Many people come to Frecker's food auction because they're trying to get by on Social Security or because they're recently unemployed. But despite the sobering stories, there's energy and excitement there.
"You have a good time, and you meet new people, and I just enjoy coming," Grace Griffith said.
"It's a lot of fun," David Tyson said. "It's more fun than going to the grocery store."
For Frecker, that's part of the point.
"These folks are here to have fun," he said.
Some people spend up to four hours at the auction stocking up. So, are the bargains worth their time?
Some claimed to have paid less than half of what they would have paid elsewhere.
"I've spent probably $125 to $150," one man said. "I would have saved ... about $300 total."
So, what happens to the stuff that doesn't sell? Frecker and his team make a big pile of odds and ends and auction the whole thing in bulk.
Last week, somebody bought the entire pile for $100 and donated it to the local soup kitchen.
"That's great. That's what it's all about," Frecker said. "Whatever it takes for the community."
Examples of Saving Big
So, would you like to hear what people paid for some of these items at the auction?
Lysol disinfectant spray, a product that usually goes for $5 at a grocery store, sold for $3 at the auction. That's a 40 percent savings.
Swanson's chicken broth would normally run you $3.79 at a grocery store. At the auction? Just $1.75, a 54 percent savings.
A lot of people bought milk in bulk at the auction and, even if it's near the expiration date, they freeze it. Why? Because Horizon organic milk sold for $2.75 a half gallon there, whereas it costs about $6.79 at the store. Savings: 59 percent.
At the store, Triscuits costs $3.29. At the auction? Just $1.25. So, our percentages are climbing up to 62 percent on that one.
A six-pack of V-8 juice is $4.39, according to the national chain we contacted. But Frecker sold it for $1.50 at the auction. That's a 66 percent savings.
For some reason, juices were a great deal at the auction, so we've saved the best bargain for last!
At the auction, bidders were able to snag six-packs of Odwalla smoothies for $1.25. At stores, the Odwalla smoothies are only available singly -- and in a slightly different sizes -- but if you do the math, six of them would be $10.86.
So by buying at the auction instead, customers saved an impressive 88 percent.
Tips for Being a Savvy Bidder
You've got to go in knowing what foods cost at the grocery store.
These days, it's easy because you can make a list and check it online.
If you don't have a point of comparison, it's easy to get carried away with the excitement and competition and overpay.