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The High Cost of Convenience
The other night while on my way home from work, I was reminded of the high cost of convenience. We were in the mood for margaritas, so I stopped by the liquor store to pick up some tequila and mix. As it turns out, they were out of the mix I was after, but I made a mental note of the price.
I then stopped off at the grocery store (a bit out of my way, but not too far) to grab the mix there. When I arrived in the right aisle, I was quite surprised at the price difference… What had been $7.99 at the liquor store was $4.09 at the grocery store. This was for identical items — same brand and same size.
I always assumed that you’d pay a premium to buy the “extras” at the liquor store, but I’d never paid attention to how big the difference was. That extra $3.90 for a bottle of margarita mix equates to a 95% markup at the liquor store vs. the grocery store. Sure, there are instances when it might be worth the added cost, but with a bit of planning you can avoid these extra expenditures most of the time.
Of course, the same can be said of a huge number of items. For example, a gallon of milk costs at least 30% more at our nearest convenience store/gas station as compared to the grocery store. In other words, it (literally) pays to be organized and informed, and to plan ahead.
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Modified on January 13th, 2012 - 10 Comments
Filed under: Frugality
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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January 12th, 2012 at 4:53 pm
In my area, its actually cheaper to buy milk at the gas station ($2.67 a gallon) versus the grocery store (~$3.50), so it seems certain high volume items don’t always follow Nickel’s experience above.
January 12th, 2012 at 7:36 pm
Most definitely…convenience can cost you a pretty penny. In Barbados, the convenience shops gas stations are pricey, but they make a killing on the bank holidays when everywhere else is closed. Plan, plan, plan.
January 13th, 2012 at 8:15 am
I try to plan to buy my milk at the convenience store because it usually costs about $1.50 less per gallon than the grocery stores, unless there is a sale. Same for bread. I suppose for that particular chain of convenience stores those are their loss-leaders to get you in so you will buy something else with a bigger profit for them.
January 13th, 2012 at 6:15 pm
In Quebec, SAQ ( liquor) stores have taxes included; not so at the supermarkets.
Milk prices are supposed to be controlled. Same price everywhere, unless you have a promotional saver coupon. Milk in different containers usually has different prices. Learn how to choose, and good luck.
January 13th, 2012 at 6:16 pm
In Quebec, SAQ stores have taxes included; not so at the supermarkets.
Milk prices are supposed to be controlled; Same price everywhere, unless you have a promotional saver coupon. Milk in different containers usually has different prices. Learn how to choose, and good luck.
January 16th, 2012 at 7:59 am
I think there a couple of ways more positive ways to look at convenience:
Having worked “field jobs” in the past and still traveling in wide ranges, it is worth it for me to purchase a drink and maybe something small as a tie-me-over. It does cost several times more than the same products I have at home, but I’ve let them keep it cool (or hot) so I am purchasing condition of the product in the location which is a combination that difficult to have from “home base.” This cost me $1-$3.50.
Then there the “ooops,” forgetting dog food (diapers for others) in which you pay twice as much for half the product, but getting out of the jam is worth four times the cost, so accepting tax for previous absent mindedness, you pay the toll.
I think what this article is getting at is times we don’t even think about it. Even in the second example, you know you are paying for convenience and only going to tie-over until your able to hit the regular store.
January 16th, 2012 at 5:09 pm
It’s important to keep this in mind when you’re traveling, too. I live in a resort town, and we have a small grocery store in the middle of town that is ridiculously overpriced (over $5 for a gallon of milk), but it’s always packed with tourists, each of whom could be saving SO much by stocking the rental condo at the “real” grocery store on their way into town.
January 17th, 2012 at 2:07 pm
You can save even more by buying a couple limes and a bottle of Cointreau and a decent tequila for your margaritas. They’ll taste 95% better too!
January 25th, 2012 at 9:16 am
Good advice, but if you take into consideration the time it took to go to the grocery store and back, it might not be such an easy choice. In your case, it was not that long, but some drive half an hour more to a gas station in order to save $5. That means they price their time for $5 per hour, and not many of us would work for that. Often, when being frugal with our small expenses, we forget to make better macro decisions and end up saving cents on the little things and spending thousands of dollars on bigger things.
May 6th, 2012 at 12:12 pm
Margarita Mix? No matter where you got it, you got ripped off. In that grocery store where you think you got a good deal, buy a can of frozen concentrate limeade. Reconstitute. You now have margarita mix, just add a splash of orange juice, plus your tequila and triple sec. Were you buying skinny/low carb mix? pick up some Crystal light instead. Same deal.