GROCERY SHOPPING 101

By on December 12, 2012

Jackson Hole, Wyo.-Food prices are going through the roof. Many Jackson shoppers are feeling especially frustrated with mounting grocery bills. Does everything in Jackson Hole have to cost more?

Acting on the assumption that valley shoppers were being price-gouged at the supermarket, JH Weekly set out to find out why. Our investigation led us down a confounding path to the truth: Jackson Hole food prices are actually very competitive. Armed with just a little know-how on what tricks grocery stores employ to get you to spend more and where savings can truly be had, we offer this simple guide to food shopping.

The economics of Oreos
Teton County’s cost of living index is always high. Housing, apparel, medical, transportation – you name it, we top the list. Food costs in Teton County are also among the highest when compared to surrounding counties Lincoln, Sublette and Uinta. But food costs are up everywhere, due in part, to last growing season’s drought and high fuel prices.

The Wyoming Department of Economic Analysis Division compiles this state-wide cost of living index data. Rod Jensen does them one better.

Jensen is the president of the Bank of Star Valley. Every summer, he sends his employees on a special mission. Each team member shops an identical 31-item list of core products at a regional supermarket. The prices are then compared. The “secret shoppers” hit grocery stores in Kemmerer, Star Valley (Alpine, Afton, Thayne), Jackson, and Pinedale. When compared, Jackson prices are the lowest around.

“Jackson is almost always the lowest and remains extremely consistent, whereas in other areas prices are going up mostly,” Jensen said. Since 2008, when Jensen began the study, Jackson’s cost for the 31-item food basket has remained remarkably reliable: $120.31 (2008), $116.82 (2009), $120.61 (2010), and $121.96 (2011). Cost for the same bags of groceries at supermarkets in the other comparison communities all rose – some sharply – over the same period.

The last round of shopping showed Jackson grocers came in about $25 cheaper than everyone else for the same grocery list.
JH Weekly’s own comparison shopping check showed Smith’s to have the lowest everyday prices on 10 core items we surveyed, followed closely by Albertsons. Whole Grocer was the highest.

A closer look at Jensen’s results show Jackson-area grocers seemed to slay the competition on average, everyday items. About a third of the items on the shopping list were generic items provided by Western Family, the major food wholesaler used by most supermarkets in the Rocky Mountain region. Theoretically, these prices should have been very close in comparison. In reality, they weren’t. Different grocers buying the same product from the same supplier were putting wildly different price tags on common items like flour, sugar, rice and milk.

“Albies is competitive throughout all its stores, but Jackson is fairly unique. They pretty much treat our store as a stand-alone,” Albertsons’ Jackson store manager Mike Edwards said. “We have quite a bit of buying power, so we may get a few more deals. They also do a lot of price checks at corporate, and we go out and do our own price checks. Just about every day we have someone comparison shop at Smith’s, and they do the same to us.”

There is no substitute for volume buying. He who buys most can sell for less. Corporate contracts with wholesalers like Western Family are all hammered out at headquarters. Edwards, and his crosstown counterpart Matt Phelps, director at Smith’s Food and Drug Center, have little wiggle room when it comes to pricing. Edwards said his greatest leeway is in discounting produce and other perishables that are reaching their expiration date.

Jackson Whole Grocer does not currently have the buying power of the big boys, but changes are underway to improve the situation and, as owner Jeff Rice notes, localism has its advantages.

“Certainly this business is very commodities-oriented, and volume allows you to buy better. And we are very optimistic we will be able to leverage that up and bring the best prices to Jackson,” Rice said. He is excited about his store’s impending move to a larger space at the old True Value site and a partnership with Market of Choice, an Oregon-based Pacific Northwest grocer. “But at the end of the day we don’t have to answer to corporate, so we can be more flexible and are able to adapt to local or seasonal demands, especially concerning produce for example.”

As if to prove Rice’s point, JH Weekly was unable wade through the “corporate policy” red tape to get cooperation from Smith’s for this article.

Comparison shopping: The customer wins
Jackson shoppers benefit from competition. When Fred’s Market was the only game in town, a head of lettuce might have cost more in 1968 than it does today. With Albertsons and Smith’s keeping each other in check, the only move for the old Food Town was to reinvent themselves.

In 2005, Bob and Melanie Arndt, owners Harvest Organic Bakery, Cafe and Market purchased Food Town and absorbed Choice Meats. The result was a specialty grocer that offered an expanded inventory of natural, organic and dietary-restricted items like gluten-free product and kosher offerings. Whole Grocer was ahead of its time. Soon after, industry giants like Smith’s and Albies began playing catch-up, stocking more and more specialty items, expanding their delis and buying local when they could.

Rice continues to push the chain stores, stocking Whole Grocer with hard-to-find hummus or imported cheese. But the conventional products are available as well. “If there is one message to get out there, it’s that we are a hybrid store,” Rice said. “We have a very strong natural and also a conventional offering. If you feel like organic oranges today, great, they are there. If not, we offer the conventional product as well.”

Rice recently announced the store would be changing locations. The new spot will allow for beefed up store perimeter amenities like café seating and a killer deli counter.

“The deli counter is going to be a very competitive element moving forward,” Rice said. “Meat and fish, fresh produce and prepared foods with a full-service bakery are areas we see growing substantially in this community and across the country. [In the new location] we will be able to offer everything from sushi to fresh pizza to a carving station with fresh roasted proteins, comfort foods, a burrito bar, a hot grain bar, a wok station, and an expanded grab-and-go section.”

Rice has the right idea. Prepared foods are the fastest growing in-store amenity going in the grocery business. Supermarkets want shoppers to fill their stomachs as well as their carts. A sit-down lunch was unheard of five years ago. Today’s grocery stores are practically restaurants featuring takeout.

“Our deli counter is a big draw,” Edwards said. “We have a great lunch crowd with our panini sandwiches, salad bar and fresh soup selection. People get lunch for takeout or eat here.”

Dine-in will be a highlighted feature at the new Whole Grocer. Rice said early design plans call for indoor seating for 50 patrons around a fireplace area at the front of the store with additional al fresco dining in the summer season.
Edwards said Albertsons’ sushi bar has been very successful, but you ain’t seen nothin’ yet. “Sushi is getting a lot more popular,” Edwards said. “We are one of the few Albertsons in the intermountain area to have a dedicated sushi chef in-store. And we just hired a brand new company about two weeks ago. They have a much bigger selection and higher quality product.”

Grocery store amenities like cafés, pharmacies, satellite banks and gas stations are all proven traffic drivers for food markets. Smith’s onsite fueling station is a gold mine. Tying in a bag of groceries with a few pennies off a gallon of gas is marketing genius. Albertsons has convenience of location, steps away from a START Bus stop.

Edwards said Albertsons has sold all their store fueling facilities, opting instead for rewards cards honored at other participating filling stations. Albies in-store bank, First Interstate, provides customers with cash options, and there are plans to add a bill pay soon at the customer service booth.

Homegrown
All the area grocers have displayed a commitment to the community. All buy local produce when they can. Certainly, Whole Grocer has been highly visible on the forefront of global awareness concerns through their participation in the Harvest Festival, 1% for the Tetons, and various local organizations. Rice has also been working closely with Vertical Harvest, helping the organizers with their business model and hopes to be a major buyer of their product.

Edwards also has interest in working with Vertical Harvest and points to his store’s involvement with the “fresh rescue program.” When perishables reach a point where they are no longer sellable but still edible, Albertsons donates the food to the Jackson Hole Cupboard and other community outreaches.

 

Reader Comments
There are two reasons for Hole Grocer’s “Hole Paycheck” reputation. (1) When you’re there, you see all the ‘good’ things, and wind up spending more for ‘fewer bags’ than you would have walked out of Smith’s with, and (2) Excepting certain things, it’s mostly a little more expensive, and they don’t seem to have as many ‘discounts’ on the normal goods other stores carry, which exacerbates the perception. Nevertheless, if you want special items, or a wider variety of organics and gluten free type things, this is your store. Hopefully their new association with the big chain will help their purchasing power a bit…
SB


About Jake Nichols

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