There are great ways to stretch your grocery budget. Thanks to shows like Extreme Couponing(:-p sorry, I don't like that show), we are all aware of the power of coupons. It is a bit of work in the beginning though, until you establish a routine and know your buy/stock up prices.
Also become familiar with discount grocers in your area. Aldi whose parent company is Trader Joe's, offers the majority of staple products at a fraction of the prices at major retailers. Their items are private label, but they are packaged by the same leading companies that you are currently buying. I had coffee with Marytina this week and she mentioned how Aldi has reduced her monthly grocery budget by $100's of dollars a month! I know it has reduced mine, but not as drastically since I extreme coupon as well.
In addition to couponing, look for Food Coop's in your community and through local churches. Fare for All, Ruby's Pantry, and Bountiful Baskets are great organizations that can help you make the most of your grocery budget. These organizations don't care what your income level is. They are using bulk buying power, teamed with seasonal pricing to bring you lots of value.