My favorite supermarket is Dominick’s. Like many people, I assume that the price I pay for a gallon of milk at Dominick’s supermarket is the same at other Dominick’s stores.
But I was wrong. Supermarket chains often price the same product in one area and a different price in another. The price difference between chains in the same metropolitan area is 12%. For a household that spends $125 per week on food, the difference amounts to nearly $780 per year!
Several theories have been proposed to explain this price gap. In some areas, rents are higher, which can lead to higher food prices. Competition from ethnic grocery stores and discounters like Wal-Mart may cause prices to be lower in some neighborhoods than in others. Supermarkets may be using loyalty card data to see how much customers in a given area are willing to pay for their products. In short, they can set prices that the market can bear.
But supermarkets aren’t the only ones setting different prices in different locations. Drugstores like Walgreens often set different prices for the same product depending on where the store is located. Fast food restaurants like McDonald’s also set different prices based on location.
Smart consumers, therefore, adjust their buying behavior. For example, those who have discovered low prices in urban grocery stores or supermarket chains may shop on their way home from work before heading to their suburban homes. Others forgo local supermarkets and shop at cheaper stores nearby.
Lesson learned: don’t assume that all your favorite supermarket chains are the same. Supermarkets often practice price discrimination. Try to find the chain with the lowest prices.
Sara has completed her education in marketing and started her career as a digital marketer. She is a content writer by profession. And she would love to add multiple things to her knowledge that she can add to her writing style. She writes about Best Ramadan Bundle at a grocery store in Canada.