For frugal food shoppers, dented tomato cans, crushed cereal boxes are too good to pass up

At end of food chain, salvage grocers thrive

ARVADA, Colo. — You won’t find a perfectly ripe tomato at Martin Palumbo’s grocery store. You won’t even find a perfect can of tomatoes.

What you will find are lots of dented cans of tomatoes, and a growing number of customers hungry for these and other staples sold at deep discounts, such as cereal boxes crushed by forklifts and bottles of salad dressing past their “sell-by” dates.

Sales at Palumbo’s Friday Store in suburban Denver have surged in recent months, mirroring the trend at so-called salvage grocers nationwide, as the recession makes frugal living appealing to more Americans.

Groceries eat up 12.5 percent of American families’ budgets, on average, according to the Bureau of Labor Statistics. So while food prices generally have fallen from last summer’s record highs, many people — not just the poor — have reasons to bargain-shop for groceries.

To capture a piece of this market, big-box retailers such as Target Corp. and Wal-Mart Stores Inc. are selling more food these days. They are snatching business from traditional grocers, who are trying to hold on to customers by packing their shelves with more no-frills products.

At the very end of the food retailing chain are the salvage grocers, whose prices are often more than 50 percent less than traditional grocers’.

People who frequent salvage stores do the bulk of their food shopping at traditional grocers, where dairy and produce are more plentiful and there is lots of variety for everything else. A trip to the salvage grocer, they say, is more like a treasure hunt — what’s available one week may not be the next time around.

That’s certainly the case at Palumbo’s store, which is more accurately a warehouse the size of two large garages with cement floors and bare white walls.

Amid the rows of crumpled cereal boxes and past-prime meat, customers may stumble upon everything from gourmet cheese to rattlesnake sausage. It all depends on what Palumbo’s broker ships him — some of which must be thrown out because it’s stale or the packaging is opened.

“I haven’t brought my older son here — he’d probably frown on it,” said Stacey McQuown, a Friday customer who recently walked out with a box of crackers, energy drinks, frozen beef and ice cream toppings.

McQuown, 41, a bookkeeper for a wholesale florist shop, estimated that she saves about $40 a week by shopping at the Friday Store.

Demand for salvage groceries has grown so much in the past year that prices — sometimes less than half traditional retail prices — have begun to creep higher, store owners say.

There are hundreds of salvage grocers operating in more than three dozen states.

In Madison Heights, Va., about 90 miles west of Richmond, there’s Anderson’s Country Market. In Kentwood, La., there’s the B & D Salvage Grocery, about 60 miles northeast of Baton Rouge. And in Carollton, Ga., there’s the T&W Salvage Grocery, about 40 miles west of Atlanta.

Most salvage grocers rely on word-of-mouth advertising.

“Doesn’t everybody want to tell people about a good deal?” said Gary Gluckman, who has run the Grocery Clearance Center in Dallas for 16 years.

Sales to salvage-food wholesalers represent a tiny fraction of the business of major food manufacturers, such as General Mills, Kraft Food Co. and Heinz. For example, Kraft, the world’s second-largest food company, sells less than 1 percent of its products through salvage stores, according to spokeswoman Bridge MacConnell.

The discounts can be significant.

Buffalo ribs that can be as expensive as $9 per pound at a traditional supermarket, sell for $2.99 a pound at the Friday Store. Deals like these come around when wholesalers order more than they can sell through traditional channels. But the food is always edible, Palumbo said.

Barbecue sauces, beef jerky, fruit drinks and chips can be purchased for 75 percent less than at mainstream stores.

But some Friday Store prices aren’t much cheaper than Wal-Mart’s.

For example, cereal can cost anywhere from $1.50 to $2 a box, and a 16-ounce bottle of Kraft salad dressing can go for $1.99. At a nearby Wal-Mart, the cheapest cereals sold for $1.84 a box, the most expensive at $4.72. A 16-ounce Great Value salad dressing cost less at $1.50.

As salvage stores seek more product to meet rising demand, some items have become more expensive, said Evangeline Anderson, who opened Anderson’s Country Market last year. Palumbo said he has had to raise prices, but tries to keep them lower than bigger grocery stores by monitoring their weekly newspaper specials.

Salvage grocers are regulated much the same as traditional grocers: inspectors check that the facilities and the products on the shelves are clean and that cans are not severely dented or punctured, said Patti Klocker, assistant director for the Consumer Protection Division of the Colorado Department of Public Health and Environment.

Aside from baby formula and over-the-counter medications, regulators aren’t worried about sell-by dates as long as food has been stored properly, said Stephanie Kwisnek, a spokeswoman for the U.S. Food and Drug Administration. Dates placed by manufacturers don’t imply when something is safe to eat but rather when the quality is best.

Fifty-nine-year-old Kathy Stroh began shopping at the Friday Store in the 1970s, when she was a single mother of three and trying to stretch every dollar. Now, as she nears retirement as a teacher at the University of Phoenix, Stroh is just as cautious about her finances.

Stroh also believes it’s crazy to pay more for food just because it is packaged better.

“That is 100 percent juice,” she said, pointing to a two-quart jug of grape Nestle Juicy Juice selling for $1.99. “I mean, they have good stuff here!”

On the Net:

Banana Box Wholesale Grocery: www.bananaboxwholesalegrocery.com

Anderson’s Country Market: andersonscountrymarket.net

andersonscountrymarket.net/directory