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How to price yourself out of business
Several months ago, I went grocery shopping for a friend who had just had knee replacement surgery. She preferred that I go to the grocery store that I almost never visited. I’m not sure why that is, but we get into our habits. She had a huge list and it ended up requiring two carts to drag it all to the cashier. Now, I would have expected that the total bill would have topped out at around $320. When the total tally came to $212, my jaw nearly crashed through the floor. That got me to thinking.
Not enough to change my habits immediately, but I did begin shopping at the other grocery store on occasion. What I noticed was that when I stopped by Shaw’s market (my habit store) for my mid-week “just a few things” sprint, the bill almost always came to about $28. When I bought the same sorts of items at the other store—Market Basket—my bill was usually around $17.
Over the summer, I mentioned that to the lad one day. He was doing most of the cooking and composing his own grocery lists. He was finding it a little difficult to get all he wanted at Shaw’s within the budget that I gave him to spend. We decided to go do a full week’s shopping at Market Basket and see how we did.
What we did was spend $83.39 and the lad whooped like a crazy man. He still had money left over in his food budget. “The more I save, the better the stuff I can get,” he reasoned.
We decided to conduct an experiment. We took the grocery receipt tape and wrote everything down in a notebook, with the Market Basket price next to each item. Then we went over to Shaw’s and found the same items. We wrote down the prices next to the Market Basket prices. When we came home, we tallied it all up and found that if we’d done the shopping at Shaw’s, we’d have spent $115.31.
We actually saved $31.92 by shopping at Market Basket. Same brands, same items.
Now, I can’t entirely account for the differences in prices, but I am confident that Shaw’s is quite aware that they’re being beaten to a pulp by the competition. There has been an on-going battle for the past three or four months. When Shaw’s drops the price of something for the weekly sale fliers, Market Basket drops theirs by an additional 10 cents. I can’t remember the last time I bought a can of Bumblebee albacore tuna for 75 cents.
Despite their efforts, Shaw’s has been losing badly. They’ve laid off employees. Their parking lot is quite often empty. While, just around the corner, Market Basket’s parking lot is mobbed. When I stop by Shaw’s for anything (usually my ground coffee and cut flowers which are cheaper there), I can always park near the door. When I stop at Market Basket, I often have to park near the road waaaaay far away from the front door. It’s pretty easy to tell who gets the lion’s share of the trade.
I suppose it might be worth mentioning that a couple of years ago, Shaw’s was purchased by Albertson’s. They’ve gone down hill ever since. Prices went up and the produce section was remodeled practically out of existence. The store uses an astounding amount of real estate for their produce section and cut the amount of produce in half. There’s a problem when you go to buy a head of iceberg lettuce or a package of mushrooms or a plain old leek and there are none to be found. Not.A.One.
Lots of greens in plastic bags, though.
Conversely, Market Basket remodeled their produce section, made it larger, and packed it with more. Not only that, they added special lighting that makes all their produce look even more lush than it already is. A brilliant and (probably) cheap marketing move. Nothing sells like literally beautiful produce.
And, their avocados are only 79 cents. I’m in love.
Then there are the Shaw’s Rewards Cards. Oh yes, new and improved. (Market Basket doesn’t have one.) Shaw’s decided to give us discounts on our gasoline as well as in-store discounts and coupons based on our buying habits. During the gasoline price heights last year, that was a pretty popular option. The more you spent at Shaw’s, the less you’d pay for gasoline at Irving gas. Some people might get up to 30 or 40 cents off per gallon. Which is a nice savings. But, really, I could have bought a whole tank of gasoline plus a little with what I’d save by shopping at the competition.
Yesterday, I stopped by Shaw’s to pick up a couple of items at their deli counter, which is, I think, better than Market Basket’s. While there, I thought I might pick up a couple of other things, too.
Well. I wanted a pound of roast beef and a half a pound of Provolone cheese from the deli, but Shaw’s had jacked their prices up since last week to $9.99 ($7.99 last week) per pound for the roast beef and $5.99 ($3.99 last week) for the Provolone. Holy mackerel. Someone is not only losing the price wars, but throwing in the towel, I think.
While, there I thought I’d check prices for the other items on my list: fresh spinach ($7.99/lb package), a fresh avocado (1.99 each), a pound and a half of hamburger ($2.49/lb), and a pint of store brand heavy cream ($2.19). I wrote ‘em down and went over to Market Basket to buy my stuff.
My Market Basket bill was $15.17 for the roast beef ($5.68 for 1.14 lb), Provolone cheese ($1.61 for .54 lb), spinach ($1.99), avocado ($.79), burger ($2.29/lb), and cream ($1.69). Had I bought it at Shaw’s the total would have been $25.94.
Shaw’s has been here for a long time and it used to have a devoted clientele. Now...well, not so much. It is startling and distressing to drive past and see a nearly empty parking lot while the other store’s lot is jam packed and overflowing. There are even traffic jams in Market Basket’s aisles. On several occasions, when I’ve stopped at Shaw’s to pick up a pound of coffee in the evening, I am virtually the only person in the store and the clerks practically pounce on me as if I’m an endangered species.
I can’t figure out whether this is Albertson’s fault or what. I suppose it must be—they are the owners and business model writer uppers. But it’s positively asinine with rather abstruse reasoning to price oneself out of business like this. Isn’t it? Is the same situation going on in other Shaw’s/Market Basket markets?
Honestly I don’t think it has anything to do with the new company buying them. Shaws has always been more expensive than Market Basket.
Albertsons, in California, is one of the Middle to lower range (Market Basket for comparison) grocery stores. Ralphs and Vons being the Higher ones(well they are lower to if you start getting into Whole foods and all of those to). Food4less if you don’t mind coming out with a little dirt under your finger nails and bagging your own stuff (I was always a little scared when I went in there so I really didn’t lol) is about the lowest of them.
And then, then there is Orchards. My most favorite place for produce and then some on earth. Cheap, fresh,cheap,cheap,cheap! Oh how I miss you!
I don’t care how many pretty little lights MB or that stinking Shaws puts on the Veggies and fruits here. They just don’t compare to Orchards. sigh, now I want to go home. Right now. Damn it!
I know Shaw’s has always been a little more expensive, but not like this. Over the past year, it has become outrageous and people are leaving in droves. You just can’t help noticing the empty parking lot vs the packed one. A ten dollar difference between two stores over 6 exact same items is simply crazy.
Well, J. We do our best out here in the eastern hinterlands with what produce California can send us. I know you like it better out there, but I’d prefer not living in a desert with earthquakes and annual wildfires. So, to each his/her own. ;)
Does some mega-corp own Market Basket? If they were killing Shaw’s with ultra-low prices, that would smack of the Wal-Mart method of driving out local businesses by treating an entire market as a (temporary) loss-leader.
OTOH, the Shaw’s prices you quote do seem Whole Foods-like outrageous, even to someone who’s become accustomed to the high prices here in the PacNW. Our standard price for a half-pound of Philadelphia Cream Cheese is in the $2.50 range.
Then again, I now have three Trader Joe’s within a 3-mile radius, so I have nothing to complain about.
As far as I know, Market Basket is still owned by the DeMoulis family. There has been a lot of family in-fighting with court battles over the years, but I believe it’s still a DeMoulis operation. I don’t know what’s going on with Shaw’s. They’re getting clobbered and they seem incapable of stopping the hemorrhaging.
No, you have no cause for complaint with a 3 Trader Joe’s within a 3-mile radius. I am so Very envious.
Well there is an Albertsons close to me so I go there often. They are cheaper than many other stores here in So Cal. I also have a very bad Whole Foods habit, or Whole Paycheck as I have affectionately renamed it. I am not a very good planner when it comes to shopping wither, and if I was I probably could save quite a bit. You are so darn organized!!! 
Market Basket is still a family owned business--b the Demoulas’ family. I could go into the family dynamics here and bore you all to death, but I won’t (there is a reason I do know!!). I prefer Stop and Shop to all other stores, but shop at MB virtually all the time; one reason is they are closer and more convenient and the other is because it is much less expensive. I can spend a TON more at S&S compared to MB. However, S&S carries all my favorite brands and MB does not always. MB has a bad habit of overloading their shelves with their own brands that I find to be (mostly) inferior to the bigger name brands. Now, I have been told by someone in a position to know that MB uses those same big name products but has their own name on them. I do not believe it, I think they buy the seconds from the name brands. My own personal opinion. So every once in a while I hit S&S and stock up on the brands I love and cannot get at MB. I never liked Shaw’s, used to shop there periodically but the closest one was in Reading and it closed recently. Was open on a Friday and empty and all signage gone by Monday. Very strange...........and word is, a MB is taking over that space. Hmmmm
Oh, I love Stop and Shop, but I avoid like the plague. Too many tempting things there that aren’t groceries. In fact, I bought my deck furniture there a few years ago. Nicely made iron chairs and table that are delicate looking, but heavy as can be. They will outlive me and I have never seen anything like them before or since. Yeah, I love that store.
Annie, I must just *sound* organized because that’s never been one of my strongest virtues, Let Me Tell You! 
oh you are organized in many ways, you just don’t see it (especially when you put your mind to it!).
Stop&Shop is a sinful place! I to avoid it like the plague!