Oh, look. A blog.

Okay, so I often shop at Whole Foods — there’s one conviently located on my way home from work, and the produce is always nice. But like many other Whole Foods shoppers, I occasionally make a “Whole Paycheck” crack. It’s my little way of saying, “Yeah, I know I’m paying more for my groceries, but I’m trying to show you I’m not a chump by at least acknowledging it in a self-deprecating joke. Ha ha!”

So it surprised me when, while reading The Undercover Economist by Tim Harford, the author made the following claim: If you’re comparing the exact same item, fancy-shmancy supermarkets like Whole Foods aren’t actually any more expensive than your local Safeway or Stop & Shop. It’s just that the fancy supermarket will carry the more expensive brands and none of the cheaper brands, so the “middle-priced” item will cost more at the fancier supermarket.

To put it another way, both Safeway and Whole Foods might carry organic eggs, and they’ll cost the same at both places. But at Safeway, those will be next to some standard conventionally-raised eggs, while at Whole Foods those will be next to the Organic Free Range Pastured Omega 3 Eggs Laid By Chickens Who Listen to Smooth Jazz All Day. The organic eggs will be at the top of the price scale at Safeway, but near the bottom of the price scale at Whole Foods.

Since I had some time on my hands, I decided to test this out. I priced out several common items at Whole Foods, then tried to find the equivalent items at Lucky and Safeway (two large west-coast chains) as well as Cal-Mart, an upscale independent grocery store. I wanted to find stores in the same geographic location to make sure real estate prices were comparable (so no Wal-Mart) and wanted to find places that had a chance of carrying some of the same brands I might find in Whole Foods (so I skipped Smart & Final, and also Trader Joe’s, which tends to have its own brands. Also, TJ’s parking lot sucks.)

So here’s what I found out. Keep in mind I live in San Francisco, so prices are probably less in your neck of the woods. In places where two prices are listed, the regular price is on top, the sale price is on the bottom.

(Note: The Safeway House Brand was only 18 oz. Also, I forgot to look up this item at Cal-Mart.)

The “House” brands for Lucky and Safeway were Sunny Side and Lucerne, respectively. I don’t know if they count as actual house brands, or are just a dairy with an exclusive partnership. Interpret it as you will. For Whole Foods, I looked at their 365 brand.

So, what did we learn from all of this?

1. Dang, I gotta stay away from Cal-Mart. Don’t get me wrong, it’s a cute little supermarket. People there know you, and the butcher is awesome. But wow, it’s pricey.

2. Whole Foods is usually cheaper than the other grocery stores, if you look at the non-sale price. In the majority of the cases above, you’ll see that it’s less expensive  buying an item at Whole Foods than you are buying at the regular price at the “cheaper” grocery stores. However…

3. The other chain stores have way more stuff on sale. Both Lucky and Safeway seem to have lots of items on sale. I think it’s probably some mischievous plan where they jack up the regular price, but then put a bunch of items on sales. Partly because it makes the sale prices look better, and I’m guessing they can subsidize the cost of a sale item by charging more on the occasional non-sale item you’ve gotta buy. You’re so happy getting the good deal on the sale-item, you don’t notice how expensive the other items are, and you get that nice, “You save $4.56!” line at the bottom of your receipt.

4. If you’re looking to go organic on a budget, get the Whole Foods 365 Brand. It’s probably not fair to compare house brand to house brand, since the items could be fundamentally quite different. But Whole Foods’ house brand was almost always the cheapest option among similar items.

5. Companies are sneaky when it comes to item size. I had heard that Haagen Dazs was just slightly shrinking the size of their packages to make themselves look cheaper than they actually were. But it looks like peanut butter and mayo companies are doing it to.

6. It looks like Tim Harford’s got a point. When I’m at Whole Foods, my choices generally consist of the $7.00 orange juices. It turns out they’re generally the same price or cheaper than the same items at other grocery stores, but those other grocery stores have less expensive brands like Minute Maid and Tropicana that I can go for instead.

7. Whatever you do, don’t buy anything from Safeway without your Club Card. Did I mention all those sale prices are only available if you have a Club Card? Without it, you’re paying the highest prices of the bunch.

8. I might have too much free time on my hands.

So does Whole Foods really deserve the “Whole Paycheck” nickname? Maybe not. I mean, once you start looking at all the prices, things are complicated enough that I’m not sure you could say for a fact that you’re always going to be paying the most at Whole Foods. (Particularly if you go for the 365 brand.)

So the next time you’re at a party, and you hear a friend making a Whole Paycheck crack, pull ‘em aside and let them know they’re mistaken in their assumptions when it comes to grocery store pricing. Because if there’s one thing I know about people, it’s that they looooove to be corrected.

This entry was posted Thursday, June 11th, 2009 at 1:08 pm and is filed under Uncategorized. You can leave a response, or trackback from your own site.