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A Grocery Store Price Comparison

September 27, 2005

By Karen Spiller, The Telegraph, Nashua, N.H.

Sep. 25–NASHUA — Ever wonder which grocery store has the best prices?

I did.

So, armed with laundry list of common grocery items, I recently paid a visit to the area’s five supermarket chains to compare prices.

My list included items such as ground beef, chicken breast, milk, yogurt, bread, cheese, bottled water — common items that might be found on a grocery list. I considered both store and name brands, and if anything was on sale, I noted the sale price.

Wal-Mart Supercenter won for cheapest store on the entire basket of 21 items, with a total price of $41.40.

Market Basket was a close second, with the bill totaling $43.96.

Hannaford came in third at $45.77. My total at Shaw’s was $46.62, and the most expensive total bill was at Stop & Shop, where the groceries came to $46.97 – 13 percent more than at Wal-Mart.

Of the five stores, both Stop & Shop and Shaw’s have a “loyalty card” that allows you to get deeper discounts on some items. Meanwhile, shoppers who don’t have the card are charged more.

For instance, a 64-ounce carton of Tropicana orange juice was cheapest at Shaw’s about two weeks ago, but that was only if you used your Shaw’s card.

With the card, the Tropicana was $2, compared with Shaw’s regular price of $2.69. Stop & Shop and Market Basket both sell Tropicana for $2.50, while it’s $2.48 at Wal-Mart and $2.79 at Hannaford.

While Wal-Mart was the cheapest for the overall food basket, it was the most expensive for bananas, charging 54 cents per pound. Hannaford had them on sale about a week ago for 33 cents. Shaw’s, Stop & Shop and Market Basket all sell bananas for 49 cents per pound.

The cheapest pint of Ben & Jerry’s ice cream can be found at Market Basket for $2.50. Wal-Mart has it for 17 cents more, and Shaw’s and Hannaford both sell it for $2.99. It is most expensive at Stop & Shop, where it sells for $3.29.

Bottled water was another interesting item where price varied quite a bit. A six-pack of 24-ounce “sport pack” bottles of Poland Spring water was cheapest at Market Basket, which sells it for $2.49. It was just a penny more ($2.50) at Stop & Shop — the store that happened to have the most expensive total basket bill.

Hannaford sells the Poland Spring for $2.99, while Wal-Mart charges $3.73 and you’ll pay the most at Shaw’s, where it’s $3.99 for the six pack.

Some items only varied by pennies, such as store brand 2 percent milk.

Stop & Shop, Market Basket and Hannaford all charge $2.49 for a half gallon. Wal-Mart is 13 cents cheaper, and Shaw’s is 20 cents more than the trio of competitors.

Of course, what you buy week to week varies, and so will the shopping cart and totals. Here are what some Nashua area residents say about where they shop, and why:

— Suze Scholl, of Nashua, says her food costs are considerably less when she shops at Market Basket rather than Hannaford.

“The only exception is that Hannaford sells soda for 99 cents a liter, where Market Basket is more typically $1.39. I also like the way I am treated at Market Basket and feel that my business is appreciated.

Hannaford’s, however, definitely has a much better fish selection and I believe, the quality is superior to Market Basket’s.”

— Nashua resident Keith Manheck lives off Exit 8, has at least four stores in which to shop that are less than 3 miles apart.

He shops at Market Basket, because it is closest.

“I’ll compare them all, however. Market-Basket and Wal-Mart have the overall lowest prices (not by too much),” he said. “Hannafords and Shaw’s have better (and higher priced) meats and seafood.”

For top quality (and higher priced) food items, Manheck goes to Whole Food Markets in Bedford and Cambridge, Mass. “The quality is the best and freshest anywhere but be prepared to pay top dollar for it,” he said.

— Karen Bill of Nashua says she loves Shaw’s. She has shopped the other major grocery chains in the area but found that Shaw’s has “consistent great prices and excellent selection.”

“I travel past the other guys to shop there,” she said.

A loyal Shaw’s customer, Bill has a rewards card that averages 10 percent or more off every purchase, she said. “It is a great incentive to continue to shop there,” she said.

“Their produce, seafood, deli and meats are consistent . . . The prices are great, and I trust my food to be fresh no matter what I buy.

“Plus, their own brand is as good or better than any name brands.”

— John Watkins of Nashua does most of his shopping at Market Basket.

“They have lower prices on almost every product they stock,” Watkins said. “I find that Stop & Shop and Shaw’s tend to have consistently higher prices.”

Watkins does check the store circulars and finds that, occasionally, sale items are worth a special trip to one of the other stores.

“I also value my time so that occasionally, rather than traveling to another store, it’s worth paying a slightly higher price for one or two items when filling a longer list.”

— Gail Hatch of Nashua does most of her shopping at Hannaford.

“It’s not the most convenient store to me, but I like the overall experience there. The store layout is friendly; the prices seem OK. The selection and quality of store brands is very good. I like the access to the custom butcher shop; the fish market is nice, and I like the specialty cheeses. It is the type of store I can linger in and check out what is new in the fresh foods.”

Since Shaw’s implemented their rewards card, Hatch said she has avoided shopping there. “The card has the effect of penalizing you if you do not have it. Reward cards are a hassle to keep track of, and only rewards the store issuing them. I find it insulting that I should be penalized for not helping Shaw’s market more products to me.”

While Hatch lives near many Market Basket stores, she reluctantly shops there. “I find the pre-packed produce annoying and do not like their store brands. The stores have not changed from the ’50′s, the lighting is offensively bright and cold.”

In the $950 billion a year food business, supermarkets are under tons of pressure to compete. But competition among grocery stores is not what it used to be, said Todd Hultquist, spokesperson for the Food Marketing Institute in Washington, D.C.

“Today’s supermarket competes not only with supercenters, but warehouse clubs, dollar stores, convenience stores . . . even drug stores are carrying a lot more products.”

They’re also competing with restaurants, especially fast food, which control half the market for food market sales, he said. American consumers are eating out more. “And if they’re eating out more they’re cooking less, and if they’re cooking less, they’re shopping less.”

Today’s retailing strategy is not to be a one-stop solution fits all, he said. Instead, it’s about diversity.

With the strong demand for ethnic products and specialty produce, retailers are under a lot of pressure to serve a lot of market segments, Hultquist said.

In response, supermarkets are competing with one another with the addition of specialty gourmet segments, prepared foods and wine and cheese sections.

The most popular new store features are deli departments, fresh seafood, floral and plant shops, prepared foods for take-out, ethnic foods, pharmacies and in-store bakeries, according to the Food Marketing Institute’s 2004 report, “Facts About Store Development.”

Michael Levy, professor of marketing at Babson College, said supermarkets are forced to compete on more than just price to get the bigger share of the consumer’s wallet.

“If they compete only on price, the next guys’ going to match the price,” Levy said.

As Levy sees it, no supermarket chain can compete with Wal-Mart on price.

“Everything Wal-Mart does is to lower their costs,” Levy said. “They make executives share hotel rooms. Their home office in Bentonville is nothing special; everything they do is on the cheap, and they’ve got one of the most sophisticated supply chains of anyone in the world.

“A family owned grocery store wouldn’t’ be able to compete, and it’s very hard for these other regional chains to be able to compete with them.”

Levy was not surprised that the Wal-Mart Supercenter offered the best prices on most items.

“That’s their plan,” he said. “They want to be the lowest price on any given market basket of goods.”

So, how do grocery stores compete with Wal-Mart if they can’t compete on price?

Location, according to Levy. “A lot of people don’t want to deal with a Wal-Mart superstore because they’re just too big.”

The trade area, or region from which the store draws its customers, is relatively small, Levy said. People generally won’t drive 10 miles to a grocery store.

“Who has the time to do that?” he said.

—–

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