As the economy struggles consumers continue to place a greater emphasis on price and value, particularly when purchasing products in the health and beauty care category. According to a recent survey conducted by the New York-based Nielsen Co., 30% of consumers consider price very important when choosing OTC products. Additionally, one quarter of Americans take into consideration whether or not an HBC product is a good value for the money before deciding to make a purchase. “With increasing medical costs and a fragile economy, consumers are more price and value centric than ever before,” says Matt Dumas, managing director, NielsenHealth.
Grocery Headquarters visited four supermarkets (Wegmans, Stop & Shop, Super Foodtown and ShopRite), a Wal-Mart and a CVS in order to compare prices of random HBC products along with general merchandise items. The comparison was conducted one week prior to Halloween in a suburban middle class area of central New Jersey. The stores essentially service a little more than 100 square miles. The U.S. Census Bureau estimates the area has a population of about 125,000, consisting of approximately 33,000 families with 345 housing units per square mile. The Census Bureau further reports that the median family income for the area is just under $100,000 per year with a per capita income of just under $35,000.
The six stores are located within a 30 mile radius of which only CVS is in a stand-alone location. The four supermarkets are either the primary or secondary store in an outdoor strip mall while Wal-Mart is part of a two store location; with the other store being its’ sister store Sam’s Club.
HBC products included in the comparison ranged from everyday items such as shampoo and toothpaste to condoms and pregnancy test kits. General merchandise products included children’s items such as the iconic 64-pack of Crayola crayons to batteries and fire logs. In total, 41 items were priced.
Not surprisingly, Wal-Mart provided the least expensive shopping experience, ringing in with a final tally of $297.10 for an average cost per item of $7.25. Wal-Mart’s total was nearly $100 less then CVS, which was the most expensive, lighting up the cash register for $381.39 for an average cost of $9.30 per item. The most expensive supermarket was Super Foodtown, whose basket accounted for $366.29 for an average of $8.93. What did raise an eyebrow was that Wegmans—known for high quality but also high prices—came in as least expensive, ringing in at $313.59 for an average of $7.65. Basket rings for Stop & Shop and ShopRite were nearly identical at $334.89, ($8.17 average) and $334.70 ($8.16 average) respectively.
A more in-depth breakdown shows for the 28 HBC products surveyed, Wal-Mart was again the leader with a total basket ring of $205.97 averaging $7.36 per item. Wegmans was a close second with a basket ring of $212.92 and a $7.60 average. Stop & Shop’s total ring was $223.62 with an average of $7.99 followed by ShopRite ($228.53/$8.16), and Super Foodtown ($254.12/$9.08). CVS was highest at $258.02 for an average of $9.22.
For the 13 general merchandise items Wal-Mart’s final cost was $91.13 for an average cost of $7.01. Wegmans again followed with a basket ring of $100.67 for an average of $7.74. ShopRite’s ring of $106.13 was better than Stop & Shop’s $111.27 and Super Foodtown’s $112.17. ShopRite, Stop & Shop and Super Foodtown averaged $8.16, $8.56 and $8.63 respectively. Once again CVS had the highest cost at $123.37 for a $9.49 average.
Although the stores are situated relatively close to each other, they all cater to a different and distinct consumer demographic. For example, the Stop & Shop is located less than a mile away from several 55+ communities and is the largest and most convenient supermarket servicing that area. Industry observers have noted that Stop & Shop has switched to a SKU reduction mode when it comes to HBC, offering fewer products to consumers, yet employing what they call everyday low pricing. That strategy was obvious when walking the HBC aisle, as well as the GM aisle, as Stop & Shop had by far the least amount of variation amongst its products.
The two stores in closest proximity were the Super Foodtown and Wal-Mart, located about a mile from one another and more than likely competing for the same consumer. It is quite possible that Super Foodtown’s inability to match Wal-Mart’s low price policy on HBC and general merchandise products is the reason that Super Foodtown was the highest priced supermarket shopped. Instead, it seems this particular Super Foodtown’s strategy is to keep prices higher than most with the intent of generating impulse purchases, thus earning higher margins per sale.
The most expensive product on the list was the Crest Premium 7-Day Whitening Strips, which carried a price of $34.99 at CVS and Super Foodtown, $29.99 at both Stop & Shop and Wegmans , $31.99 at ShopRite and $29.72 at Wal-Mart. The most inexpensive item was a 94-cent roll of Scotch Magic Tape. The same roll of tape cost $1.19 at Wegmans, $1.29 at Stop & Shop, $1.69 at Super Foodtown, $1.99 at ShopRite and $2.19 at CVS.
Consistent with its everyday low price philosophy; Wal-Mart’s prices were lower across the board, with the exception of three products. A 22-count of Pampers Cruisers size 6 was $11.24 at Wal-Mart, which was more expensive than both Stop & Shop and Wegmans ($10.19 and $10.29 respectively). The Pampers were most expensive at CVS ($12.99) followed by $12.79 at Super Foodtown and $12.50 at ShopRite. A box of Cold-Eeze was priced at $4.99 at Wegmans, followed by Wal-Mart at $5.27. Stop & Shop and ShopRite were evenly priced at $5.49 while Super Foodtown was highest among supermarkets at $5.79. CVS was nearly two dollars higher at $7.69. Also costing less at three of the four supermarkets was a box of Mucinex 12-hour expectorant, $9.49 at ShopRite, $9.79 at Wegmans and Stop & Shop, $10.54 at Wal-Mart, $10.99 at Super Foodtown and $14.79 at CVS.
None of the items in the survey had the same price at every store; however a 4-pack of Energizer Lithium e2 AA batteries was closest—$9.99 in all stores—with the exception of Wal-Mart, which carried the batteries for $9.83, just 16-cents less.
Among supermarkets, Wegmans was the price leader by itself in more than half the items chosen, (22 times) and shared the best price point 12 times. Stop & Shop prices were lowest for L’Oreal Excellence Cream ($6.99), the Schick Quattro titanium trimmer ($10.49), Oral B Vitality Sonic Toothbrush ($19.99), the previously mentioned Pampers ($10.19) and a 24-count of Sudafed sinus headache ($4.99). Both ShopRite and Super Foodtown were lowest on one item each, the Mucinex 12-hour expectorant ($9.49) and an 8-pack of Duracell Ultra Digital AA batteries ($7.99) respectively.
Super Foodtown was the supermarket with the most expensive prices for 26 of the 41 items in the basket and tied for most expensive for six other items. Stop & Shop was most expensive for four items, a 12-count of Durex extra sensitive condoms ($11.99), a tube of Krazy Glue ($3.29), Krazy Glue Gel ($3.49) and a BIC multi-position lighter ($6.99). ShopRite was most expensive for only Scotch Magic Tape ($1.99). Wegmans didn’t have the highest price among supermarkets for any items in the basket.
In addition to having the lowest prices among supermarkets, Wegmans was by far the easiest to shop, providing wide aisles and clearly defined sections. Known for its attentive customer service, surprisingly Wegmans was the only one of the four supermarkets in which an associate didn’t offer assistance when looking for items. That may have more to do with the fact the items in the comparison were found in various aisles, eliminating the appearance of a confused shopper. Neither Wal-Mart nor CVS associates offered any assistance.