Grocery Store Prices Decoded

Noah Katz is vice president of Foodtown, a multi-store food cooperative that includes Freshtown in Amenia and Dover Plains. Almost all of Katz’s stores are smaller in size than Stop & Shop or the area’s Price Chopper stores, but he said Foodtown is competitive with — and sometimes undersells — those larger stores.

"We’re part of a 65-store co-op," Katz said in an interview. "That lets us buy at truckload quantities."

Katz’s father, Sydney, is president of the company and is personally involved in conducting research to determine the prices each store charges for items, Noah Katz said.

"We’re a family run business," Katz added. "We instill a family oriented culture and we take care of our employees."

Happy employees translate into increased productivity and competitive prices, the Katzes believe. Further savings can be realized through S&H Greenpoints, a descendant of the former trading stamp program. Accumulated points can be redeemed for catalogue merchandise or for items in the store.

"We have customers who have never paid for eggs," said Katz.

Katz said large chains typically lose the personal touch with their customers. He said he consistently undersells Stop & Shop, whose Dutch parent company, Royal Ahold, Katz called "the Enron of supermarkets." The international food retailer was rocked by an accounting scandal in 2003.

What accounts for the sometimes baffling differences between prices for similar items at stores around the region?

James T. Rogers, president of the The Food Industry Alliance of New York State, said large supermarket chains typically employ dozens of people whose job is to review circulars, visit competitor stores and take note of the prices.

"They always have a good feel for what the competition is doing," said Rogers.

(A representative of the Connecticut stores did not return calls seeking comment.)

And sometimes the checking of prices includes management as well. One area store manager, who spoke only on the condition of anonymity, said he visits competitor stores weekly.

As for what goes through the minds of managers when they determine a price for an item, Rogers said they typically set the price they think the market will bear. But most stores develop a prevailing philosophy of either putting a lot of items on sale and offering higher everyday prices or vice versa.

As for why the milk in The Lakeville Journal survey was 25 to 30 percent less expensive in New York than in Connecticut, Rogers said the state of New York has an anti-price-gouging law that limits the retail price of milk to twice what the farmer receives. Since the wholesale price of milk varies from day to day, retail milk prices can vary by as much as 25 to 30 cents per week.

"In our view, that serves no one," Rogers said. "It gives rise to wild fluctuations."

Despite their small economy of scale, convenience stores typically undersell supermarkets on milk. They are willing to accept the lower profit margins because they hope to lure customers in to buy higher-margin items such as cigarettes and lottery tickets.

In addition, convenience store chains such as Cumberland Farms and Stewart’s have their roots in the dairy business and are more inclined to sell a high volume of milk for reasons of tradition.

Some area residents said that in their shopping forays, they consistently buy whatever is on sale.

"I only buy sale items," said Tom Zetterstrom, a North Canaan resident. "What I used to buy in the old [Stop & Shop], I still buy in the new store. I just have to walk through more aisles."

Others use variety and distance to determine the shopping venue.

"I think it’s important to look at the whole picture," said Lakeville’s Wendy Hamilton. "It appears that the prices are close enough that I would rather save the 30-plus minutes of driving and the attendant fuel costs and energy consumption by shopping at the store closest to home."

But Jane Kellner summed up the feelings of many: "For me, what it comes down to is being a smart, aware shopper."