High Grocery Bills? Get Great Deals on Dated Food

March 18, 2008— -- In the heart of Pennsylvania's Amish Country — where many people still live off the land — something unusual has sprouted up. Local grocery stores are trying to give consumers the most bang for their buck by selling food that is outdated or damaged.

While some raise their eyebrows at the practice, Mike Mitchell, the president of Amelia's Grocery, says it is perfectly safe.

Mitchell's 11 grocery stores in eastern Pennsylvania sell so-called "closeouts," groceries that are rejected by major supermarkets because they are out-of-date, damaged or feature old promotions.

"The products are very well preserved and the quality holds up way beyond the freshness date," Mitchell said. "We don't have a lot of products that are past the date … but when we do, we mark the price down and we move them through."

Older Food, Better Deals

Amelia's carries some cereal boxes with pictures of Santa Claus and labels that indicate it should have been eaten nine months ago. But Mitchell says the cereal is fine and one of the best bargains in town.

"Most of our cereals are under two [dollars], some as low as 99 cents," he said.

Amelia's can offer such low prices by buying products that are close to the "best if used by" or "sell by" dates printed on the packaging. Mitchell also buys damaged goods or ones with old marketing ploys.

For example, he offers pink "M&Ms" or pink cans of soup left over from Breast Cancer Awareness month back in October. According to Mitchell, they are the "same products you'd buy if it were in a red label, but it's a pink label."

Amelia's advertises that it can cut your grocery bill in half. ABC News compared its prices to a supermarket in the same community and found spaghetti for 69 cents instead of $1.30, cookies for a dollar instead of two and orange juice for two bucks verses $3.50.

With such bargains, so-called salvage grocers are busy these days. In this struggling economy Amelia's is posting same-store sales up 12 percent from last year. And with food prices rising at their fastest rates in nearly 20 years, gone are the days when these stores catered mainly to low-income customers.

But how do they get away with selling food that's past the"sell by" date? And is it really safe to eat a frozen dinner that's still around three months after the maker recommended you eat it? Or is it legal, for that matter?

There are almost no laws governing the dates on food, with two big exceptions: milk and baby food. In fact, the Food and Drug Administration says when food is stored properly, it will keep its quality and be safe to eat after the posted date.

Expiration Dates Not Meaningless

Mitchell says he has never had a customer get sick from anything bought at any of his stores. In fact, he believes products are so well packaged and preserved that "it would be a waste to destroy" those products.

"We'll keep the price moving until they're sold and we have a lot of customers actually gravitate to those products because they know they are of a significant value," Mitchell said. "They may save 70 to 80 percent."

As part of an unscientific taste test, a "Nightline" correspondent and producer sampled a lot of outdated, damaged food, without getting sick. Despite this, Mitchell says "best before" and expiration dates are not completely meaningless.

"They do help a consumer know freshness and they prevent products being sold significantly past their dates," Mithchell said.

Deciding how old is too old is ultimately up to the consumer. A risk that so far is paying off for surplus grocers such as Amelia's.