In the Boston area, the price of groceries in June was 24 percent higher than in June 2019, according to the US Bureau of Labor Statistics. Compare that to the 5 percent increase from June 2013 to 2019.
“Market Basket is not the bargain mecca that it was once upon a time, primarily because of inflation,” said Somerville’s Edgar Dworsky, founder of the consumer advocacy website Consumer World. But, he added, “On an everyday price basis, they’ll probably come out on top.”
This month, a Globe reporter and video producer put that hypothesis to the test, bringing the same 10-item shopping list to Market Basket, as well as Wegmans, Stop & Shop, Star Market, and Whole Foods Market, stores chosen because, like Market Basket, they offer a similarly wide selection of name-brand and store-brand items (sorry, Aldi and Trader Joe’s).
To minimize the role geography plays on grocery prices, all of the grocers were located in Somerville, aside from Wegmans, which is across the Medford border. The grocery list, focused on breakfast items, aimed to capture commonly purchased staples in as many categories as possible — meat, dairy, produce, etc.
Under florescent lights and through labyrinthine aisles, crouched down to the lowest shelves and stretching for the highest, a clear winner quickly came into view.
Market Basket clinched the cheapest prices on five items — sourdough bread ($5.99), Greek yogurt ($5.99), shredded cheddar cheese ($1.97), bacon ($5.99), and orange juice ($3.59). On oat milk, Market Basket tied with Stop & Shop and the on-sale price at Star Market ($4.99), on bananas with Wegmans (49 cents a pound), and on eggs with Wegmans and Stop & Shop ($3.99). Wegmans triumphed on Honey Nut Cheerios ($3.79, 20 cents cheaper than Market Basket), while Stop & Shop prevailed on russet potatoes (99 cents a pound, compared to $1.29 for Market Basket’s “baking potatoes”).
In all, the (pretax) bill at Market Basket came out to $38.28, eking out a victory against runner-up Wegmans, which totaled $40.01. Stop & Shop clocked in at $44.40 (in all fairness, its store-brand orange juice, $1.40 pricier than Market Basket’s, also contained 12 additional fluid ounces), followed by Star Market at $45.20. At an even $50, Whole Foods came in a distant fifth place.
Put a different way: Someone who took this shopping list on their weekly grocery trip would save about $90 annually going to Market Basket over Wegmans, or more than $600 over Whole Foods.
Lauren Torres, 38, embarked on a similar grocery store price investigation for her affordability-focused blog, Bitches Get Riches, earlier this year. As an avid Market Basket shopper in the MetroWest area, she was relieved when she, too, found it to be the cheapest option, beating out Aldi, Walmart, and even Dollar General.
“It did inspire me with this question of, ‘So, why?” she said.
Why, indeed? Any number of factors likely contribute to Market Basket’s ability to keep prices lower than other chains, from its (usual) lack of debt to the long tenure of its employees. The mob-like conditions that seem to definethe aisles at all hours are another big reason behind the chain’s ability to stay affordable.
“You can go to the Stop & Shop and pay $3.99 for a package of Oreos. They might sell 100 of them. We sell them for $1.50, but we’ll sell 10,000,” said longtime Market Basket store director Ron Lambert in a 2015 MIT case study. “We’re going to win in volume. We always win in volume.”
At the end of the day, a supermarket’s pricing model is more than mere mathematics. It’s how it communicates what kind of brand it is, said Karl Zimmermann, a senior partner focused on the grocery industry at the consulting firm Bain & Co. in Boston.
“Some retailers have a commitment to be as low price as they can possibly be for their customers, and that’s why customers shop them,” he said. “Who’s our customer, and how do we make them happy?”
These days, the focus is on who, exactly, at Market Basket is answering those questions. In May, members of the company’s board of directors placed CEO Arthur T. Demoulas on paid leave as they launched an investigation into whether he was orchestrating a work stoppage as the board said it was seeking more transparency into the company’s operations and succession planning.
The ouster came just over a decade after Demoulas was fired amid tensions with his cousin’s side of the family, sparking an employee and customer protest that ended with Demoulas and his sisters buying out their relatives for $1.6 billion and Demoulas’s reinstatement.
Though they remain at bitter odds, in statements to the Globe, both Demoulas and Market Basket board director Steven J. Collins — one of the members that placed Demoulas on leave — chalked up the low prices to Market Basket’s philosophy of doing right by the customer.
“We don’t have the buying power of Costco or Walmart, but we are constantly adjusting our supply sources to get the best products at the lowest prices. This takes a lot of hard work, but our team is the best at doing that,” Collins said.
Collins added that amid Demoulas’s suspension, “Pricing is unchanged and as low as we can get them.”
Justine Griffin, the spokesperson for Demoulas, said the exiled CEO “frequently met with product buyers with the direction to keep prices low for valued customers.”
“The management team under Arthur T. Demoulas has leveraged years of grocery store know-how, relationships with vendors and partners, and its own transportation system to keep prices low and pass savings on to customers,” she said.
It’s an approach other supermarkets are taking, as well. In a statement to the Globe, a Whole Foods spokesperson said the Austin-based chain “is committed to value while maintaining industry-leading quality standards,” adding that the company has reduced prices on 25 percent of its items over the last 15 months.
A spokesperson for Stop & Shop, headquartered in Quincy, said as part of the company’s growth plan that closed 32 stores last year, the supermarket is “committed to lowering everyday prices at all of our store locations in Massachusetts, and we will be able to share more details in the coming weeks.” She added that shoppers could collect additional savings and freebies through its weekly circular, loyalty program, and Savings Station kiosks.
A representative for Wegmans declined to comment, and a representative for Star Market didn’t respond to requests for comment.
Though Market Basket came out on top of the Globe’s investigation, Dworsky, of Consumer World, urged customers against blind allegiance. Instead, he advocates for “cherry-picking” — learning which stores in close proximity have the best deals or sales on certain items, and shopping accordingly. (A customer following this maxim on the Globe’s shopping list would spend $37.78 — 50 cents below the Market Basket receipt.)
Meanwhile, he added, discount chains such as Aldi or Price Rite might not offer the selection of a Market Basket or a Stop & Shop, but they may offer more competitive prices on generics and the name brands they do carry.
Loyal shoppers might need some convincing. In a report released in January that surveyed 11,000 US consumers, British data firm dunnhumby ranked Market Basket as the top grocery store for “price consistency” (not changing prices too often) and No. 3 in “base price” (offering low prices without coupons or sales). Those rankings were based on customer perceptions — not hard dollars and cents.
So perhaps there is something more important than whether Market Basket really is the place to get more for your dollar.
“I think in consumers’ minds, it is,” Dworsky said.
Dana Gerber can be reached at [email protected]. Follow her @danagerber6.
