Wal-Mart Pricing Report: Round XII

Walmart Price Comparison

Rocky Mountains’ High Prices

The big three chains in Denver aren’t particularly competitive with Wal-Mart, but dig under the snow and get into the loyalty programs, and the mainstream market is much more competitive.

This makes an even dozen. With this iteration of the Produce Business Wal-Mart Pricing Report, we mark the visit to our 12th city. We’ve previously gone from east to west and north to south; this time we go straight up to the Mile High City, Denver, CO.

Wal-Mart Supercenter vs 5 Chains
Price Comparison — Denver, CO

May 2006 – Prices Available To The General Public
STORE NAME WALMART ALBERSTON’S KING SOOPER WILD OATS
Produce Item Price Regular
Price
% Over
Wal-Mart
Regular
Price
% Over
Wal-Mart
Regular
Price
% Over
Wal-Mart
Apples – Granny Smith – Large $1.28 $1.39 8.59% $1.79 39.84% $1.49 16.41%
Apples – Red Delicious – Large $1.16 $1.79 54.31% $1.49 28.45% $1.49 28.45%
Avocados – Small $0.76 $1.29 69.74% $1.50 97.37% $1.79 135.53%
Bananas – Yellow $0.48 $0.49 2.08% $0.49 2.08% $0.49 2.08%
Blueberries – Clamshell $2.97 $2.99 0.67% $3.99 34.34% $3.99 34.34%
Bok Choy $0.84 $1.29 53.57% $1.99 136.90% $1.29 53.57%
Cabbage – Green $0.47 $0.89 89.36% $0.49 4.26% $0.69 46.81%
Cantaloupe – Whole $0.71 $1.29 82.52% $0.89 25.93% $1.29 82.52%
Carrots – Whole $0.86 $0.99 15.12% $0.69 -19.77% $0.89 3.49%
Carrots – Whole 1# Bag $0.50 $0.99 98.00% $0.50 0.00% $0.79 58.00%
Celery $1.27 $1.29 1.57% $1.19 -6.30% $0.99 -22.05%
Cucumbers – English $1.96 $2.49 27.04% $1.99 1.53% $1.99 1.53%
Eggplant $1.74 $2.50 43.68% $1.99 14.37% $1.49 -14.37%
Grapefruit – Red $1.27 $1.49 16.93% $1.79 40.94% $1.69 33.07%
Grapes – Red Seedless $2.50 $2.99 19.60% $2.99 19.60% $2.99 19.60%
Green Onions $0.50 $0.69 38.00% $0.69 38.00% $0.69 38.00%
Honeydew – Whole $3.50 $0.99 -71.71% $0.99 -71.71% $1.29 -63.14%
Kale $0.94 $0.99 5.32% $1.29 37.23% $2.49 164.89%
Kiwi $0.25 $0.50 100.00% $0.50 100.00% $0.50 100.00%
Lemons $0.48 $0.79 64.58% $0.59 22.92% $0.79 64.58%
Lettuce – Green Leaf $1.28 $1.29 0.78% $2.99 133.59% $1.49 16.41%
Lettuce – Iceberg $0.98 $1.49 52.04% $0.99 1.02% $0.99 1.02%
Lettuce – Red Leaf $1.28 $1.29 0.78% $1.49 16.41% $1.49 16.41%
Lettuce – Romaine $1.38 $1.29 -6.52% $1.49 7.97% $1.49 7.97%
Limes $0.42 $0.50 19.05% $0.33 -21.43% $0.50 19.05%
Mangos – Red Small $0.88 $1.29 46.59% $1.50 70.45% $1.79 103.41%
Mushrooms – White Bulk $2.24 $3.99 78.13% $2.99 33.48% $2.99 33.48%
Onions – Red Bulk $0.98 $1.49 52.04% $1.29 31.63% $1.29 31.63%
Onions – Yellow 3# Bag $1.98 $1.99 0.51% $1.99 0.51% $1.99 0.51%
Oranges – Navel Bulk $0.38 $0.89 135.26% $0.81 113.87% $1.25 229.92%
Pears – Anjou $0.88 $1.29 46.59% $1.79 103.41% $1.69 92.05%
Peppers – Bell Green $0.98 $0.99 1.02% $0.99 1.02% $0.99 1.02%
Potatoes – Red Bulk $0.78 $0.99 26.92% $0.99 26.92% $0.99 26.92%
Potatoes – Russet Bulk $0.78 $0.79 1.28% $0.99 26.92% $0.89 14.10%
Squash – Zucchini $1.63 $1.00 -38.65% $2.49 52.76% $1.49 -8.59%
Strawberries – Clamshell 1# $3.98 $2.99 -24.87% $2.98 -25.13% $4.99 25.38%
Tomatoes – Grape $2.97 $2.99 0.67% $3.99 34.34% $3.99 34.34%
Tomatoes – On the Vine $2.84 $3.99 40.49% $3.49 22.89% $3.49 22.89%
Tomatoes – Roma/Plum $0.98 $1.50 53.06% $1.79 82.65% $1.99 103.06%
MARKET BASKET $52.06 $60.16 15.56% $63.20 21.41% $64.89 24.66%

 

STORE NAME WALMART SAFEWAY WHOLE FOODS
Produce Item Price Regular
Price*
% Over
Wal-Mart
Regular
Price
% Over
Wal-Mart
Apples – Granny Smith – Large $1.28 $1.49 16.41% $1.99 55.47%
Apples – Red Delicious – Large $1.16 $0.99 -14.66% $1.99 71.55%
Avocados – Small $0.76 $1.99 161.84% $1.49 96.05%
Bananas – Yellow $0.48 $0.59 22.92% $0.69 43.75%
Blueberries – Clamshell $2.97 $2.99 0.67% $4.99 68.01%
Bok Choy $0.84 $1.99 136.90% $1.49 77.38%
Cabbage – Green $0.47 $1.49 217.02% $0.99 110.64%
Cantaloupe – Whole $0.71 $1.50 112.23% $0.99 40.07%
Carrots – Whole $0.86 $0.99 15.12% $1.69 96.51%
Carrots – Whole 1# Bag $0.50 $1.99 298.00% $1.99 298.00%
Celery $1.27 $2.49 96.06% $1.49 17.32%
Cucumbers – English $1.96 $2.99 52.55% $2.49 27.04%
Eggplant $1.74 $2.49 43.10% $2.49 43.10%
Grapefruit – Red $1.27 $1.99 56.69% $0.69 -45.67%
Grapes – Red Seedless $2.50 $1.99 -20.40% $2.99 19.60%
Green Onions $0.50 $0.69 38.00% $0.99 98.00%
Honeydew – Whole $3.50 $0.89 -74.57% $0.99 -71.71%
Kale $0.94 $2.49 164.89% $1.99 111.70%
Kiwi $0.25 $0.50 100.00% $0.50 100.00%
Lemons $0.48 $0.79 64.58% $1.99 314.58%
Lettuce – Green Leaf $1.28 $1.99 55.47% $1.89 47.66%
Lettuce – Iceberg $0.98 $2.99 205.10% $1.49 52.04%
Lettuce – Red Leaf $1.28 $1.99 55.47% $1.89 47.66%
Lettuce – Romaine $1.38 $1.99 44.20% $1.89 36.96%
Limes $0.42 $0.50 19.05% $0.50 19.05%
Mangos – Red Small $0.88 $1.99 126.14% $1.29 46.59%
Mushrooms – White Bulk $2.24 $3.99 78.13% $3.49 55.80%
Onions – Red Bulk $0.98 $1.49 52.04% $1.49 52.04%
Onions – Yellow 3# Bag $1.98 $2.99 51.01% $3.99 101.52%
Oranges – Navel Bulk $0.38 $0.62 64.13% $0.99 160.53%
Pears – Anjou $0.88 $1.99 126.14% $1.99 126.14%
Peppers – Bell Green $0.98 $2.99 205.10% $0.88 -10.20%
Potatoes – Red Bulk $0.78 $1.49 91.03% $0.99 26.92%
Potatoes – Russet Bulk $0.78 $0.99 26.92% $0.79 1.28%
Squash – Zucchini $1.63 $2.99 83.44% $2.99 83.44%
Strawberries – Clamshell 1# $3.98 $3.99 0.25% $4.99 25.38%
Tomatoes – Grape $2.97 $4.99 68.01% $5.99 101.68%
Tomatoes – On the Vine $2.84 $3.99 40.49% $3.99 40.49%
Tomatoes – Roma/Plum $0.98 $3.49 256.12% $2.99 205.10%
MARKET BASKET $52.06 $80.77 55.16% $79.42 52.56%

And it isn’t just the mountains that are lofty in these environs. The big three competitors to Wal-Mart — Albertsons, King Sooper and Safeway — are pretty high priced as well, exceeding the Wal-Mart Supercenter concept by 16 percent for Albertsons, 21 percent for King Soopers and 25 percent for Safeway, when measured by the price levels available to all consumers.

Several things about the Denver market are particularly intriguing.

First of all, it is an important market for both Wild Oats, headquartered in Boulder, CO, and Whole Foods, headquartered in Austin,TX. Because these concepts carry much larger organic selections, their product offering is not fully comparable to the conventional supermarket offerings that we do track. But these stores are too important a factor in Colorado, particularly the Denver-Colorado Springs corridor, to be ignored.

Wal-Mart Supercenter vs Save-a-Lot
Price Comparison — Denver, CO

May 2006 – Prices Available To The General Public
STORE NAME WALMART SAVE-A-LOT
Produce Item Price Regular
Price
% Over /
Under Wal-Mart
Cabbage – Green $0.47 $0.49 4.26%
Cantaloupe – Whole $0.71 $0.75 5.85%
Celery $1.27 $0.99 -22.05%
Cucumbers – Regular $0.88 $0.69 -21.59%
Grapes – Green Seedless $2.50 $1.99 -20.40%
Grapes – Red Seedless $2.50 $1.99 -20.40%
Green Onions $0.50 $0.50 0.00%
Lemons $0.48 $0.33 -31.25%
Lettuce – Iceberg $0.98 $0.99 1.02%
Limes $0.42 $0.25 -40.48%
Mangos – Red Small $0.88 $0.99 12.50%
Mushrooms – White Packaged $1.48 $1.59 7.43%
Onions – Yellow Bulk $0.84 $0.49 -41.67%
Onions – Yellow 3# Bag $1.98 $1.79 -9.60%
Oranges – Navel Bulk $0.38 $0.62 64.13%
Papayas $1.98 $0.99 -50.00%
Pears – Anjou $0.88 $0.99 12.50%
Peppers – Bell Green $0.98 $0.89 -9.18%
Potatoes – Russet 10# Bag $3.38 $2.59 -23.37%
Squash – Zucchini $1.63 $0.99 -39.26%
Strawberries – Clamshell 1# $3.98 $3.99 0.25%
Tomatoes – Roma/Plum $0.98 $1.39 41.84%
MARKET BASKET $30.08 $26.28 -179.47%

 

How They Stack Up Against Wal-Mart Supercenter

Region Store % Over
Wal-Mart
Store % Over
Wal-Mart
Store % Over
Wal-Mart
Connecticut Super Stop & Shop 23% Shaws 34% Big Y 36%
Salt Lake City Harmon’s 2% Smith’s 6% Albertsons 12%
South Florida Super Target 22% Publix 31% Winn-Dixie 52%
Dallas, Texas Albertsons 23% Brookshires 7% Kroger 19%
Neighborhood Market -1.2% Tom Thumb 27%
Portland, OR Albertsons 30% Fred Meyer 22% Haggen 27%
Safeway 37%
Phoenix, AZ Albertsons 22% Bashas’ 25% Fry’s 15%
Safeway 17%
Palm Springs, CA Albertsons 19% Jensen’s 60% Ralphs 16%
Vons 20%
Detroit, MI A&P Food Basic -17% Farmer Jack 24% Kroger 28%
Meijer 3%
St. Louis, MO Dierbergs 22% Schnucks 14%
Houston, TX HEB 15% Kroger 30% Fiesta Mart -0.3%
Atlanta, GA Harry’s 18% Ingles 16% Kroger 25%
Publix 13% Target 3%
Denver, CO Albertsons 16% King Sooper 21% Safeway 25%

So we’ve compromised and included their results in our chart on the Denver Market but not in our running total. Basically, we want to illustrate what the price differential is for a consumer shopping these venues but because the products are not strictly comparable.

We do not want to keep them as part of our long-term statistics. Not surprisingly, Whole Foods and Wild Oats were the two most expensive shopping venues we tracked, with Wild Oats coming in at 52.56 percent over Wal-Mart and Whole Foods at 55.16 percent over Wal-Mart.

Of course, this shows the strength of the positioning of these chains as they offer the consumer a unique value in product type, social affiliation and other benefits — they don’t pretend to offer a better discount. Indeed, with the growing popularity of the “Fair Trade’ movement — in which people elect to pay more and buy products that pay higher wages — it is very possible that lower prices might turn into an actual disincentive to buy.

Of course, not all, nor even most, consumers feel that way. As a result, Albertsons, King Sooper and Safeway try to build loyalty with their own loyalty card programs. And these programs do turn the market into a much more competitive one.

If we include loyalty card discounts, Albertsons comes in at 12.43 percent over Wal-Mart, King Sooper at 12.17 percent over Wal-Mart and Safeway at 4.70 percent over Wal-Mart. This continues a pattern we have seen nationally of Safeway, in particular, maintaining relatively high price levels but offering steep discounts to cardholders.

A net difference for cardholders of less than 5 percent puts Safeway in shooting range to fight Wal-Mart. It is not plausible to argue that the great center of the American population will ignore price differences of 20 percent, but it is certainly plausible to argue that people will pay 5 percent more for things, such as more convenient locations, broader product selection, higher service, etc.

The third thing we tracked in Denver is the competitive position with a deep discount concept — in this case Save-a-lot, the wholly-owned Supervalu subsidiary. We didn’t include this competitor in our overall analysis because its very limited product assortment makes it not directly comparable to the surveyed stores.

Wal-Mart Supercenter vs 3 Chains
Price Comparison — Denver, CO

May 2006 – Prices Available To Card Holders
STORE NAME WALMART ALBERSTON’S KING SOOPER SAFEWAY
Produce Item Price* Regular
Price*
% Over
Wal-Mart
Regular
Price*
% Over
Wal-Mart
Regular
Price*
% Over
Wal-Mart
Apples – Red Delicious – Large $1.16 $1.79 54.31% $1.49 28.45% $1.00 -13.79%
Avocados – Small $0.76 $1.00 31.58% $1.50 97.37% $1.50 97.37%
Bananas – Yellow $0.48 $0.49 2.08% $0.33 -31.25% $0.49 2.08%
Blueberries – Clamshell $2.97 $2.99 0.67% $2.50 -15.82% $2.50 -15.82%
Bok Choy $0.84 $1.29 53.57% $1.99 136.90% $0.78 -7.14%
Grapes – Red Seedless $2.50 $2.99 19.60% $1.49 -40.40% $1.00 -60.00%
Green Onions $0.50 $0.69 38.00% $0.69 38.00% $0.50 0.00%
Lettuce – Green Leaf $1.28 $1.29 0.78% $2.99 133.59% $1.00 -21.88%
Lettuce – Red Leaf $1.28 $1.29 0.78% $1.49 16.41% $1.00 -21.88%
Mangos – Red Small $0.88 $1.00 13.64% $1.50 70.45% $1.50 70.45%
Onions – Yellow 3# Bag $1.98 $1.99 0.51% $0.99 -50.00% $1.99 0.51%
Oranges – Navel Bulk $0.38 $0.63 65.79% $0.63 65.79% $1.25 229.92%
Pears – Anjou $0.88 $1.00 13.64% $1.79 03.41% $1.00 13.64%
Squash – Zucchini $1.63 $1.00 -38.65% $2.49 52.76% $1.00 -38.65%
Strawberries – Clamshell 1# $3.98 $2.99 -24.87% $2.50 -37.19% $3.00 -24.62%
Tomatoes – Roma/Plum $0.98 $1.00 2.04% $1.79 82.65% $1.00 2.04%
MARKET BASKET $52.06 $58.53 12.43% $58.39 12.17% $54.50 4.70%

Now this is in a way unfair. We only include in this chart the items in our market basket that are shared by both Wal-Mart and Save-a-lot. Because Save-a-lot is a limited assortment store this is, to some extent, letting one competitor pick the terms of engagement.

Of course, Save-a-lot presents this value proposition to consumers, too, and, even if unfair, as Save-a-lot is under no obligation to carry every item every week, it raises a real threat to Wal-Mart’s “real estate” in the minds of consumers. After all, if the Wal-Mart customer is particularly influenced by price, then someone offering lower prices, even on a limited market basket, is a big problem.

So Denver turns out to be an intriguing market. On the surface the big three aren’t particularly competitive with Wal-Mart, but dig under the snow and get into the loyalty programs, and the mainstream market is much more competitive.

Yet there is a whole organic/natural sector that operates oblivious to Wal-Mart’s pricing strategies, while a limited assortment discounter is eating away at Wal-Marts claim to “Always Low Prices.” Heady stuff in the Mile High City.

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