I spend $300 / month for 3 adults and 2 kids. Includes toiletries and household merchandise.
I'm wondering how much food you waste. We throw away very little. My DH likes leftovers for lunch a lot better than sandwiches. (BTW, leftovers are cheaper!) I also have "garbage bags" in my freezer. I have 3 zipper-top bags that I've labeled "Chicken," "Mexican" and "Italian." All uneaten leftovers get tossed in a bag before they go bad. Pork and beef usually goes in "Mexican," while hamburger gets tossed in "Italian." Chicken ends up as soup, and the others as a "Surprise Casserole," or as my kids call it, "Mystery Dinner" !! LOL
I have also stopped stockpiling. If you stockpile foods, a lot of your budget goes to that. Using a pricebook, I have figured that sales are cyclical and the same item will be on sale again in the near future. It doesn't pay to buy 12 of something when you may only use 2 before it is on sale again. The only thing we "stockpile" is beef. We buy a side every 9 to 12 months. It's cheaper than grocery store meat.
Do you plan meals? I have a meal-planning calendar that helps me a lot! We have a Palm Pilot, but if you go to palm.com, you can download their desktop calendar at no charge. The reason I like the software is that you can set up menus so that they repeat at specified intervals. For example, Monday nights are Italian nights, so I've created a list of 6 dishes that my family enjoys. Each dish repeats every 6 weeks, so there isn't a bunch of "we just had that!" You should also consider making each night of the week a theme night. Monday - Italian, Tuesday - Mexican, Wednesday - Leftovers, Thursday - Kids choice, Friday - On a Bun, Saturday - Restaurant at Home, and Sunday - Chef's Choice.
Do you buy a lot of convenience foods? There are a lot of recipes on the Internet for ones you make yourself. We have many activities during the week and my homemade frozen meals come in handy! If you need ideas, take a notebook to your grocery store and write down things you see in the frozen aisle that looks good.
And speaking of convenience foods, stop buying bakery products and packaged snacks if you do unless they are reduced. Most of the items you (or your kids) don't need anyway. If you feel the urge to grab a box of cookies, snack cakes or fruit snacks, go back to the produce section and pick up some apples instead. I'd like to know why fruit snacks are $7 a pound but we whine at apples for $1.50 a pound!
The deli is another no-no. $5 to $7 a pound -- or more! -- just for cooked meat? That's crazy!
Good luck - I'm sure other members can give you more advice!