I also don't have much, if any, wiggle room in our food budget. We always have enough, but I don't have a lot of extra on any given month. That means that I don't have the money to buy lots of coupon deals or great stock-up sale items that I'm not planning to use that month.
When I was growing up, my Mom very effectively tackled the challenge of feeding a family of 6 in a third-world country where store prices were sky-high by creating her own store of items she had picked up at deep discounts. So a few months ago I had a conversation with her about how her system worked, and it seemed like the answer to my dilemma!
My system functions on 2 accounts or caches of money: (1) the money I have to spend on groceries every month and (2) the money I have to spend on coupon deals & other discounted items that I do not currently need.
Starting the 'deals & discounts' account did require that I set aside some seed money at the first. I set aside $50 of my own money (i.e., not from the food budget), but since then, that account does pretty well at replenishing itself.
Each week I make my grocery list, clip the coupons I need and spend an hour or so shopping. These are primarily things we do NOT currently need, but the sale is on that week so that's the time to buy. I use the money from my second account to purchase these items, and because they are not things we need right now I can be picky about what I buy. I try to focus on the deals that are really good - 3 cent peanut butter, 50 cent boxes of cereal, etc. I bring my purchases home, write the prices on the packaging in permanent marker (I also add in the tax I paid), and put them in my 'store', which for lack of space is a couple of boxes in the back of a cupboard (except for frozen items, of course ;o)
When I make my list for my big, monthly shop, I shop from my 'store' first. This month, I bought a large jar of Smucker's Grape Jelly for 31 cents, a box of pasta for 18 cents, ketchup for 52 cents, canned tomatoes for 50 cents, and 3 gallons of milk for under $3 each. I put these 'bought' items on my shelf, cross them off of my shopping list, and figure out my total bill. I subtract that amount away from my total food budget for that month and put it (in cash) into my special 'Couponing' envelope so I can keep taking advantages of sales. If, at any time during the month, we run out of something from shampoo to peanut butter, I check my store first to see if I already have it. This is really helping me to stretch the money! Last month, we decided to have another family over and I fed the 10 of us all the chicken we cared to eat with a few pieces left over for under $4, thanks to a great re-buy from my own freezer.
I'd love to hear your best tip for pinching your pennies!