Ways to save money shopping for food online

The cost of food is a big component of a typical family's budget. (Bad things tend to happen if you don't eat for extended periods of time.) Fortunately, though, the food budget can offer some substantial opportunities for saving money.

Typically when we think of “saving money on groceries” we think of saving money in the grocery store: clipping coupons, hitting the Sunday circulars, buying generics, using a shopper's club card, etc. Taking advantage of these money-saving tactics can make feeding your family quite a bit cheaper, for sure.

But what about moving out of the brick-and-mortar store and going to shop for food online? What kinds of opportunities are there for food savings on the Internet?

Special items — and not-so-special items

We've been successful in saving some money by buying food online. Typically we haven't bought any common food items online (items that just about any grocery store will carry). However, my wife has to stay away from just about every kind of refined sugar and corn product, and my daughter seemed to be allergic to just about everything under the sun at one point. We shopped online for food items that met these fairly demanding restrictions. Since fewer stores around us carried these specialty items, it was easier to find deals for these items online.

Our main source for grocery savings online has been Amazon.com. Buying groceries through Amazon isn't always cheaper, but we came to rely on it for a number of those hard-to-find items. We bought enough through them to justify an Amazon Prime subscription, which brought the shipping costs down. Additionally, for the items we used regularly (as well as some non-grocery items!) we agreed to buy the item periodically unless we told them otherwise (kind of like Columbia House's “if you want the selection of the month, do nothing”). In making this agreement, we saved an extra 15%. This service, not too surprisingly, is called “Subscribe and Save.”

With regard to the common food items I mentioned earlier, I've let slide a big assumption: that shopping for these items in the store vs. shopping for them online is cheaper. There are a couple of situations for which it makes sense to shop for as many grocery items as you can online.

First, if you live in Alaska or Hawaii, there's good news from Amazon: Amazon Prime now covers free standard shipping to Alaska and Hawaii on selected items. Some members of my family have lived in Alaska, and they tell me that just about everything is atrociously expensive because it all has to be flown or barged in. Well, for the same $79 annual fee that everyone else pays, a selection of grocery items can be shipped by standard methods (i.e., slowly) to Alaska (and Hawaii). Not a complete solution, but better than nothing.

Second, if your time is so valuable that it doesn't make sense to do your own grocery shopping, online food shopping may be cost-effective. The appeal of online grocery shopping is convenience: place the order and pick it up at your doorstep. It's a time-saver. Since it can save perhaps an hour of time, each time, the price premium of buying online over physically buying the items in the grocery store may be worth it. Losing out on $200 worth of business to save $40 or even $80 doesn't make economic sense.