Tag: grocery stores

The large leaps in food prices are slowing down compared to last year. But the prices may depend on what grocery store shoppers patronize.  

The Fort Worth Report surveyed prices for 11 items at two different Albertsons, Walmart Neighborhood Markets and Fiesta Marts. The survey revealed varying prices for each store. 

While a gallon of 2% milk was $5.19 at Fiesta Mart, for example, a shopper at Albertsons could buy the same jug for $3.99. On the flipside, a loaf of Mrs. Baird’s Honey Wheat bread could cost a customer $1.15 more at Albertsons than at a Walmart Neighborhood Market. 

Shoppers tend to stick to a handful of stores they are comfortable with and don’t regularly compare prices, Narayanan Janakiraman, an associate professor of marketing at the University of Texas at Arlington, said. People are creatures of habit, he said, and retail stores take advantage of that. 

“The retail store can get away by offering you deep discounts on a few items, and they don’t need to offer you frequent discounts,” Janakiraman said. 

Grocery stores buy food from manufacturers and retailers have leeway in pricing it based on the maximum suggested retail price. Grocery stores are sensitive to what their customers imagine is a reasonable price for products like a gallon of milk, he said. Customers at Walmart, for example, might expect low prices. 

“All they have to do is to ensure that they get your repeat business,” Janakiraman said. “And so the best way is to ensure that your center value doesn’t go down.”

The time of purchase, location and quantity also dictates the price, Janakiraman said. For him, he’s a huge fan of Trader Joe’s and buys items at bulk from Costco and buys premium brands that he thinks might be useful. But by and large, he sticks to store brands. 

“To me, on most other things I realize that store brands are as good as national brands,” Janakiraman said. “And so it might be OK to say OK to the store brand.” 

Bob Young, executive managing director at retail real estate firm Weitzman, said grocery stores each target a market. Mainline stores, like Kroger, Tom Thumb and Albertsons, dominate the Dallas-Fort Worth area. But there are also specialty stores, such as Trader Joe’s, and stores that cater to specific demographics such as Fiesta Mart. 

Kroger, Tom Thumb and Albertsons may soon merge under one company. The Federal Trade Commission is currently reviewing the potential purchase. The merger worries Young. 

“If they’re involved, meaning the Federal Trade Commission, they’re very concerned about how something like this might impact consumers and pricing,” Young said. 

Overall, the jumps in food prices are starting to cool down. Food prices increased 6.7% over the year, according to Bureau of Labor Statistics data from July.  Julie Percival, regional economist for the Bureau of Labor Statistics, said grocery store prices have largely evened out since last September. Last year saw the largest food prices increase since 1980.

Eggs saw record-high prices because of the bird flu, which forced farmers to kill millions of egg-laying hens, reaching as high as $4.80, according to data from the St. Louis Federal Reserve Bank. But as the flu leveled out, Percival predicted that the price will lower again.

“I actually had a bet with my husband going about when egg prices would get back below $3,” Percival said. “And he was saying, ‘It’s never going to happen again.’ And I said, “No, no, no, just give it a few months, it’ll be back below $3 in no time.’”

Now, the average price for a dozen eggs is about $2. 

Some shoppers around Fort Worth are going to multiple stores to find the best deals. 

Linda Martin, a retired nursing professor at Texas Christian University, shops at a variety of grocery stores and pays attention to prices and coupons to get specific items. She shops at the Fiesta Mart at 2700 8th Ave. because of the produce, which she said is the best quality and price. 

“I can’t pay $2 for a bell pepper that I paid two for 50 cents here,” Martin said.

Tristan Townsend shops at the Walmart Neighborhood Market on 717 W. Berry St. because it’s the closest to where she lives. She also rotates through Central Market and Trader Joe’s depending on the day. 

Townsend said she’s noticed prices have gotten higher. Fajita meat, she said, used to be around $8. But now it ranges from $14-20. Townsend budgets for groceries, but sometimes she just has to buy something at the price it’s listed for.

“I just suck it up and pay for it,” she said.

Fort Worth Report fellows Sara Honda and Dang Le contributed to this report.

Seth Bodine is a business and economic development reporter for the Fort Worth Report. Contact him at seth.bodine@fortworthreport.org and follow on Twitter at @sbodine120.

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