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This Friday, as he has done almost every Friday for the past four years, Ron Peterson will offer antiques, coins, jewelry, furniture and cars at the weekly auction he runs in Monroeville, New Jersey. This is all typical fare for the bidding business. But if you're also hankering for ham and paper towels, no need to run to the supermarket. As the stock market headed south last fall, Peterson, owner of Elmer Auction, LLC, added grocery items like cereals and cleaning supplies to his ledger. And they've sold, to the cash-strapped ladies and gentlemen sitting in each and every row. "People are skipping the decorative items," says Peterson, "and buying what they need."

These days, the auctioneers are selling more than just art, antiques and the furniture from Aunt Esther's estate. As the economy fell, so did the demand for discretionary items sold at most community auctions across the country. Desperate for new revenue streams, auctioneers have started selling basic grocery store items to help pick up the slack. Hungry for bargains, shoppers have started bidding on fruits and vegetables. As long as the final offer comes in below the grocer's retail price, they'll save a few bucks on the essentials. "Right now, the auction business is in a downfall," says Raymond Toler, owner of Raymond's Auction House in Archdale, N.C. He started running monthly grocery auctions in October, after hearing that they were becoming popular among other auction companies in his area. "We're just trying new things to get people in here," he says. (See pictures from a grocery auction.)

During the downturn, auctioneers in Michigan, Indiana, Tennessee, Pennsylvania, Georgia and other places have either added groceries to their programs, or increased the frequency of food sales. Grocers are eager to hand over their goods to the auction houses once they know they're not going to sell them in the store. For example Clyde DeHart, owner of DeHart's Auction Service in Carlisle, Pa., takes "scratch n' dent" items from a nearby BJ's Wholesale Club store. Since BJ's sells in bulk, if one can of corn gets smashed in the truck, the whole case can't be displayed in the store. So DeHart takes the case, throws out the bad can, and auctions off the rest. If, say, a bag of Iams dog food gets ripped, DeHart will tape it and offer it at auction. "I wouldn't do that with human food," he says.

Some items are near or slightly past their sell-by dates, but these days, expiration won't keep shoppers from a discount. Other stuff is just sitting on the shelves, and will go to waste if it's not auctioned off. The grocers get the proceeds from the sale, and the auctioneer takes a cut for commission. DeHart, for example, says he usually receives about 30% of an auction's proceeds. He started running grocery auctions three months ago. During one five-hour auction in March, bidders paid $10,000 for groceries that retailed for $26,000. (See pictures of the world's longest yard sale.)

For his next big sale on April 17, DeHart lists about 100 items on the docket, including coffee, Pampers, Twizzlers, relish, macaroni & cheese, and Chef Boyardee. "This is the DeHart's (sic) stimulus plan," his listing says on dehartsauction.com, "and it does work." (To find a grocery auction in your area, try auctionzip.com, a site that lets you search for sales by zip code. Type "grocery" in the "keyword" bar).

Auctions only work for shoppers if they do a little research. Consumers need to know the price of a given item in the local grocery store, and discipline themselves not to bid above that number. Such self-restraint is no easy task. "We joke all time about the Little Debbies," says Chris Crepeau, owner of Michigan Auction Sales in Holt, Mich. "People always want those specific snack cakes, and pay too much for them." The auction process sweeps up some shoppers — I just want to win, darn it, no matter how much I pay for that dog food. Others figure that while they're at the grocery auction anyway, they might as well spend an extra dollar to secure that ground beef. Beats making another trip to the store.

On the whole, however, the auction houses report that shoppers are saving. The deals vary by product, but Crepeau says his customers are paying 25-50% less than they would in the supermarkets. Crepeau has been running monthly grocery auctions for two years; over the past couple of months, attendance has doubled. "We have a lot of laid-off people around here," says Crepeau. "They need ways to save a buck."

They also often need a respite from grocery shopping's drudgery. Scouring the supermarket for all the items on your list is not much fun. You may get pumped shopping for shoes and new shirts, but who relishes the chance to buy relish? Sure, you can bid on frozen chicken pot pie over the eBay, but that's a pretty lonely endeavor. At the very least, these auctions offer another social outlet in tough times. "It's a fun experience," says Randy Zimmerman, a mother of seven from Holt. "We goof around with the auctioneers. People are having conversations throughout the auction — it's a real chance to meet new people."

Still, saving is the real key. Zimmerman has seven children, between the ages of 2 and 19. At a grocery auction in early April, she bought hot dogs, frozen pizzas and an Easter ham, among other items. Zimmerman figures all the stuff she bought would have cost $300 in the grocery store. She paid $100. "The more we save on food, the more we have for all the other bills each month," Zimmerman says. "Our cash flow can stretch out further. These auctions have just been a blessing."

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• Sean Gregory
• Auctioneers need new revenues sources. Consumer want cheap food. Start the bidding on the bananas