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Supermarkets - Key Findings from Our Surveys (From CHECKBOOK, Spring/Summer 2011)
Supermarkets

Our price comparisons and ratings of stores for quality show the results of our market-basket price survey and our most recent surveys of consumers on supermarket quality and service. Here are some key findings— 

The area’s price standouts were DeMoulas Market Basket, Walmart Supercenter, and Target. 

DeMoulas Market Basket had prices that averaged 21 percent lower than the average of those found at surveyed stores belonging to Shaw’s and Stop & Shop, the area’s largest chains. Walmart’s prices were about 19 percent lower than the Shaw’s/Stop & Shop average. Target’s prices were about 14 percent lower. For a family that spends $150 per week at the supermarket, this 14-to-21-percent price difference might be expected to total $1,100 to over $1,600 during the course of a year. 

Target’s recent reconfiguration of a handful of area stores to include groceries means more Boston area shoppers have low-cost supermarket options nearby. 

DeMoulas Market Basket and Walmart Supercenter stores will not be conveniently located for many Boston area shoppers—although many price-conscious shoppers will be able to take advantage of their low prices with a little trip planning—possibly making a grocery stop when returning from a business meeting, a trip to the mall, or other occasional excursions. Target’s continued reconfiguration of area stores to include a basic selection of groceries will hopefully mean Boston area consumers will have even more low-cost supermarket options. But the newly configured Target store we shopped had in stock only about 56 percent of the items in our market basket, so using a Target may mean you’ll have to supplement your grocery shopping sometimes with visits to conventional supermarkets. 

On average, prices at the Stop & Shop stores we shopped were about six percent lower than those at surveyed Shaw’s stores. 

We found relatively large store-to-store price differences within both the Shaw’s chain and the Stop & Shop chain. 

Prices at the lowest priced store we shopped for Stop & Shop were nine percent lower than its highest priced surveyed store; prices at the lowest priced store for Shaw’s were about eight percent lower than its highest priced surveyed store. 

Interestingly, the stores we shopped for Shaw’s and Stop & Shop that had the lowest prices were both in North Shore communities—which means they are located near most of the DeMoulas Market Basket stores. It seems that competition, where it exists in the Boston area, works. 

On the quality side, Shaw’s and Stop & Shop got relatively poor ratings from their customers we surveyed. 

In a limited survey of CHECKBOOK’s online subscribers, Shaw’s and Stop & Shop rated at the bottom of the list for “quality of fresh produce,” “quality of meats,” “staff helpfulness/pleasantness,” “speed of checkout,” and “overall quality.” For overall quality, Shaw’s was rated “superior” overall by only 23 percent of its surveyed customers and Stop & Shop by only 26 percent. In contrast, Hannaford Supermarkets, Roche Bros., Trader Joe’s, and Whole Foods Market were all rated “superior” overall by more than 70 percent of their surveyed customers. 

Price leader DeMoulas Market Basket also scored low on our survey of customers, but not as low as its much more expensive Shaw’s and Stop & Shop competitors. 

DeMoulas Market Basket was rated “superior” overall by 42 percent of its surveyed customers. 

Hannaford Supermarkets proves it is possible to offer reasonable prices and still provide high-quality service. 

The Hannaford Supermarkets chain, with about a dozen Boston area stores, had prices that were about six percent lower than the Shaw’s/Stop & Shop average, and the chain also received favorable ratings for overall quality. 

Trader Joe’s overall ratings from our customer survey were among the highest, yet we found its prices aren’t necessarily higher than the big chains’. 

Since the market basket we used for our price survey is largely made up of national-brand products, and because Trader Joe’s offers only its own brands, we couldn’t include it in our standard price comparisons that are based on our standard market basket of items. Instead, we had to shop Trader Joe’s using a special survey. In this survey, we included the same fresh produce, meats, and dairy items as we use in our standard survey. For the national-brand items on our list, we first compared the prices of Trader Joe’s store brands to the prices charged by the conventional supermarkets for the comparable national-brand items in our market basket. Then, for a second comparison, we compared Trader Joe’s prices to those charged by the supermarkets for the least expensive comparable item of any brand (including generic brands) they carried. (When comparing prices, we used per-unit pricing—for example, price per ounce.) 

The table below shows the results of these comparisons. 

How Do Trader Joe's Prices Compare?*
Price index score using our standard market basket of items, including national brands, comparing similar items at Trader Joe's Price index score using our standard market basket of items, comparing similar items at all stores, regardless of brand Price index score for nonperishable items only, including national brands, comparing similar items at Trader Joe's Price index score for nonperishables items only, comparing similar items at all stores, regardless of brand Price index score for fresh produce only Price index score for meat onlyVariety--percent of items available, counting similar items at all stores, regardless of brand
Shaw's (Salem)$98 $103 $103 $104 $100 $88 88%
Stop & Shop (Peabody)$91 $97 $92 $96 $83 $93 86%
Trader Joe's (Brookline)$96 $123 $84 $120 $136 $94 33%
* Price index scores compare stores' prices to the average prices found at surveyed Shaw's and Stop & Shop stores.
  • In our comparison of Trader Joe’s prices versus the prices of comparable, national-brand items, we found that Trader Joe’s prices were about four percent lower than the average prices found at Shaw’s and Stop & Shop. 
  • When we compared Trader Joe’s prices to the Shaw’s/Stop & Shop average, assuming a shopper would buy at Shaw’s or Stop & Shop the cheapest brand (or generic brand) comparable to each item in our market basket, Trader Joe’s price advantage disappeared; in fact, we found its prices were 23 percent higher than the Shaw’s/Stop & Shop average. (But keep in mind that this second comparison doesn’t take into account product quality, and Trader Joe’s received higher overall ratings from its customers than Shaw’s or Stop & Shop.) 
  • For produce, Trader Joe’s prices for the items it carried were about 48 percent higher than the average prices at Shaw’s and Stop & Shop. 
  • For meat, Trader Joe’s prices were about four percent higher than the Shaw’s/Stop & Shop average. 

The highest prices among stores we surveyed were found at Whole Foods Market. 

Whole Foods’ prices were 22 percent higher than the average of prices at Shaw’s and Stop & Shop—for the limited number of comparable items we could find at each chain. On the other hand, Whole Foods consistently gets very high scores from its customers on our surveys on quality of fresh produce and meat, and many of the items we could compare between Whole Foods and the other chains were fresh produce and meat items. (See our article on Buying Organic Food for more discussion of costs of organic food.) 

When shopping stores that offer store brand or generic products, you save by substituting these products for national brands. 

When we allowed the substitution of cheaper generic and store brands for about one-fifth of the items in our price-shopping market basket, the total cost for our market basket dropped by about seven percent, on average, at the two big chains. 

For the items that could be compared, based on unit prices (price per pound, for example), the membership warehouse stores we surveyed offered dramatic savings. 

The surveyed Costco store, for example, beat the Shaw’s store we compared it to by a whopping 36 percent. Compared to that Shaw’s store, the savings were also about 36 percent at the Sam’s Club store we surveyed and about 33 percent for BJ’s. 

Since you can’t typically get everything you need at a warehouse store, we looked at the savings you might gain by shopping at both a warehouse store and at a supermarket, assuming you would purchase the lowest cost size available at either place. We found, for example, that by including Costco on your shopping schedule along with a Shaw’s store, you might save about 14 percent compared with shopping at the Shaw’s store alone. 

For more information on how warehouse stores compared on price, go to our section Buying in Bulk: Shopping at Warehouse Stores



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