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Supermarkets - Key Findings from Our Surveys (Fall 2013/Winter 2014)
 
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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 Walmart and Target.

Walmart Supercenter’s prices averaged about 18 percent lower than the average we found at the Cub Foods stores we checked and nine to 17 percent lower than the prices we found at Rainbow Foods, depending on the Rainbow Foods store being compared. Target’s and SuperTarget’s prices were nearly as low as those we found at Walmart. For a family that spends $150 per week at the supermarket, a nine to 18 percent price difference could total $700 to $1,400 a year.

Most Twin Cities area shoppers have low-cost supermarket options nearby.

Price-leader Walmart Supercenter stores are not conveniently located for many Twin Cities area shoppers. But there are 12 area SuperTargets (which offer full grocery departments), and more than 40 regular Targets offer a basic selection of groceries; so most area consumers have at least one low-priced supermarket located near their workplace or home.

We found relatively large store-to-store price differences within the Rainbow Foods chain.

Prices at the lower priced Rainbow Foods store we checked were nine percent lower than those at the higher priced store we checked.

Interestingly, the lower priced Rainbow Foods store was located in Apple Valley, near a SuperTarget, possibly indicating that competition, where it exists in the Twin Cities area, produces lower prices.

Prices at Cub Foods and Rainbow Foods were in some cases very close, depending on the location.

Neither the big chains nor the price leaders receive high ratings for quality.

On the quality side, Walmart was rated “superior” for “overall quality” by only 33 percent of its surveyed customers; Rainbow by 37 percent; Target by 44 percent; and Cub by 47 percent.

Prices at chains that received the highest ratings from their customers for “quality of fresh produce,” “quality of meats,” and “overall quality” were substantially higher than Cub’s and Rainbow’s prices.

Byerly’s, Kowalski’s Markets, and Lunds received very high scores in these key aspects of quality, but prices at Kowalski’s were about 18 percent higher than the Cub/Rainbow average, Lunds about 19 percent higher, and Byerly’s about 20 percent higher.

Trader Joe’s received higher overall ratings than Cub and Rainbow; yet doesn’t charge higher prices.

Since the market basket used for our price survey largely consists of national brands, and since Trader Joe’s offers mainly its own brands, it is not included in our price comparisons. Instead, we shopped Trader Joe’s using a special survey that included the same fresh produce, meats, and dairy items included in our full standard survey. For the national-brand items on our list, we first compared the prices of Trader Joe’s house brands to the prices charged by the conventional supermarkets for comparable national-brand items. Then, for a second comparison, we compared Trader Joe’s prices for its house-branded products to prices charged by other 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 and Aldi's Prices Compare?*
Price comparison score using our standard market basket of items, including national brands, comparing similar items at Trader Joe's and Aldi Price comparison score using our standard market basket of items, comparing similar items at all stores, regardless of brand Price comparison score for meat only Price comparison score for produce only Variety--percent of items available, counting similar items at all stores
Aldi$59 $59 $64 $72 39%
Cub (Crystal)$101 $96 $105 $93 84%
Cub (Apple Valley)$105 $100 $107 $109 84%
Rainbow (Apple Valley)$92 $87 $85 $98 86%
Rainbow (Shoreview)$101 $97 $103 $100 86%
SuperTarget$89 $86 $97 $103 77%
Target$85 $83 $97 $96 57%
Trader Joe's$96 $96 $103 $107 30%
Walmart Supercenter$84 $80 $83 $91 81%
* Price comparison scores compare stores’ prices to the average prices found at surveyed Cub and Rainbow stores.

  • Trader Joe’s prices for our full market basket of produce, meat, dairy, and branded products when compared to prices for the same market basket with comparable national-brand items at Cub and Rainbow were about four percent lower than the average of the prices at Cub and Rainbow.
  • When we compared Trader Joe’s prices to the Cub/Rainbow average assuming a shopper would buy at Cub or Rainbow the cheapest brand (or generic brand) comparable to each item in our market basket, Trader Joe’s price advantage disappeared. (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 Cub or Rainbow.)
  • For produce, Trader Joe’s prices for the items it carried were about seven percent higher than the Cub/Rainbow average.
  • For meat, Trader Joe’s prices were about three percent higher than the Cub/Rainbow average.
  • Shopping at Trader Joe’s won’t save you money compared to the savings from shopping at a Walmart Supercenter or at a Target. For example, for comparable national-brand items at Walmart, Trader Joe’s prices were about 12 percent higher.

Aldi offers incredibly steep savings.

We also shopped Aldi, which is owned by the same company that operates Trader Joe’s, using the same method used to compare Trader Joe’s prices. As shown on the table above, Aldi’s prices were an astounding 41 percent lower than the Cub/Rainbow average for comparable national-brand items, and 38 percent lower than the Cub/Rainbow average when we substituted the cheapest brands available at Cub and Rainbow. But Aldi was rated lower than either Cub or Rainbow for “quality of produce” and “quality of meats.”

Unfortunately, many shoppers of Trader Joe’s, Aldi, and Target’s non-SuperTarget stores will also have to shop at conventional supermarkets.

The Trader Joe’s store we surveyed had only 30 percent of the items in our market basket in stock, and Aldi had 39 percent. The non-SuperTarget Target store carried less than 60 percent of the items.

Whole Foods Market had the highest prices.

Whole Foods’ prices were 53 percent higher than the Cub/Rainbow average—for the limited number of comparable items available at each chain. On the other hand, Whole Foods receives very high scores for quality of fresh produce and meat, which account for many of the items we could compare between Whole Foods and the other chains.

In our last price survey, when we examined prices for organic food, Whole Foods’ prices for organic items were lower than Cub/Rainbow’s. See our article Buying Organic Food for more advice and information.

You can save by substituting store brands or generic products for national brands.

When we substituted cheaper generic and store brands for about one-sixth of the items in our price-shopping market basket, the total cost dropped by about five or six percent at the surveyed Cub and Rainbow stores.

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

Sam’s Club, for example, beat Rainbow by a whopping 32 percent. And compared to Rainbow, savings were about 27 percent at Costco.

Since you can’t typically get everything you need at a warehouse store, we looked at the potential savings of shopping at both a warehouse store and 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 Rainbow, you could save about 15 percent compared with shopping at Rainbow alone.

In addition to having low prices, Costco received relatively high ratings for quality of fresh produce and meat.

Seventy-five percent of Costco’s surveyed customers rated it “superior” for “quality of fresh produce,” and 77 percent rated it “superior” for “quality of meats.” Sam’s Club received lower ratings on each of these questions, but its scores were still higher than Cub’s or Rainbow’s.



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