Is Wal-Mart cheaper?
In a survey this week of grocery stores in the Charleston area, Wal-Mart prices were consistently lower than the retailer’s competitors.
For eight randomly selected items, Wal-Mart offered the lowest available price, though for some items, its price was the same as other stores. And after checkout, the price for groceries at Wal-Mart was at least 19 percent to 36 percent lower.
Groceries were purchased Monday at the Nitro Wal-Mart, South Charleston Kroger, St. Albans Parkway and Kanawha City Foodland.
“The everyday-low-pricing strategy has been a real winner for them,” said Kenneth Stone, a professor of economics at Iowa State University who has studied Wal-Mart since the 1980s. “They’re never satisfied with the status quo. They realized that people spend more money in a grocery store than any other store. They thought, ‘If we start handling groceries, we can get them to spill over to general merchandising.’ Now they’re the number one grocery store.”
The survey did not account for general merchandise — such as clothing, entertainment products or furniture. Wal-Mart is also the world’s largest retailer, toy store and home-improvement chain, not to mention West Virginia’s largest private employer with more than 11,000 workers.
The survey also did not account for special prices offered to members at some stores. And groceries were not purchased at Wal-Mart-owned Sam’s Club for this survey.
Eight items (pictured above) were randomly selected. The total bills ranged from $15.61 at Wal-Mart to $21.28 at Foodland. That includes any items on sale that day. The groceries at Kroger cost $21.21 — but had Kroger Plus Card savings been used, the price would have been a few dollars cheaper.
For some items — a dozen eggs and a single box of Kraft macaroni and cheese — prices at the four stores were about the same. But Wal-Mart scored the most points with a Tony’s Frozen Pizza and a pack of 12 cans of Coca-Cola — charging about a dollar less than any other store in both cases — and bananas, where Wal-Mart charged 35 cents a pound, 4 cents less than Parkway and 10 cents less than Kroger and Foodland.
Greg Sutphin, Spencer Foodland manager, said Wal-Mart workers used to come to his store to conduct weekly price comparison checks until he called the supercenter’s manager and threatened to prosecute.
The Wal-Mart employees would also take Foodland circulars to their store across the street to post on the wall to match competitors’ prices, Sutphin said. He then placed a sign on the circular holder outside the store that said the advertisement were free for customers and 25 cents for others.
“I think the store is probably good for Spencer but I don’t like the way they come in and do business,” he said.
Wal-Mart makes sure to charge as little as possible for products of which people are familiar with the usual price — milk, eggs, cheese, etc., Stone said.
But that’s not necessarily the case when it comes to things people don’t often buy — items that people might not know the standard price, Stone said. As an example, he said his barber charges 25 cents for a comb that sells for 98 cents at Wal-Mart.
“To be fair to [Wal-Mart], if you bought everything there, and compared it with other stores, you’d probably come out a little bit ahead,” Stone said.
The low-priced staple items are often prominently displayed at the end of aisles, he said.
But how does Wal-Mart do it? The Bentonville, Ark.-based company places intense pressure on suppliers to provide products at the lowest available prices. Vlasic Pickles filed for bankruptcy after it couldn’t keep up with demands by Sam’s Club.
Wal-Mart managers also are expected to come to work early and leave late — and the retailer’s efficiency in distribution is unparalleled. And don’t forget the ease at which customers can buy everything from underwear to orange juice — all without leaving the store.
“History would judge that they would have made retailing much more efficient. They made suppliers much more efficient — including manufacturing,” Stone said. “On the negative side, they certainly put out of business many, many local stores that were pretty good and lost a lot of jobs in the country to overseas.”
Staff writer Jennifer Ginsberg contributed to this story. To contact staff writer Paul Wilson, use e-mail or call 348-5179.