We spend similarly: ~$1200/month for two people on household items and consumables. I've been really focused on this category for the past year, since so many people on this forum spend dramatically less.
Of this total, it would be relatively easy to shave 400$ by cutting down dramatically on alcohol (I have cheap taste in wine, but my husband has expensive taste in craft beers, scotch, and whiskey), and packing lunches for my husband (he buys lunch out nearly every work day, and sometimes breakfast as well). Regular groceries I have found much harder to affect...seems to consistently run ~$500/month. We also don't eat out as a couple very often, maybe once or twice per month.
The grocery average is actually down $100 from previous years'...I did it by buying fewer precooked foods, watching for sales on meat, buying cat supplies, cleaning supplies etc at Target. We can cut it a bit more by going meatless a few nights per week and using more beans and whole grains. However, I think dramatic reduction beyond that is unrealistic for us unless it is an emergancy. We're not going to stretch meals with nutritionally empty carbs like potatoes, white, rice, and pasta. We're not going to eat cheaper, fattier meat in place of lean meat. We're not going to stop eating wild caught Alaskan salmon 4 or 5 times per month and substitute in farmed tilapia. And we're not going to swap out our dessert food (Lindt dark chocolate at nearly 3$/bar) for crap chocolate.
So really, that leaves the low hanging fruit of husband's eating out to really cut the bill. He would happily eat a decent packed lunch, but he just won't ever MAKE his own packed lunches; this means if I want to affect that category, I have to do it for him. I'm feeling lazy and a little resentful at having to add this to my responsibilities, so I haven't done anything about it yet.