In Lake Worth, FL, Two Hispanic Stores Beat Wal-Mart In Produce Pricing
The big discovery of this Wal-Mart Pricing Report is how competitive the Latino retailers are in this Palm Beach County region.
For over a decade, the Produce Business Wal-Mart Pricing Report has recorded and analyzed not only how Wal-Mart has priced produce, but also how the competitors in communities where it operates respond to Wal-Mart’s pricing.
For conventional supermarkets, competition with Wal-Mart has been tough. Some chains have responded not so much by competing with Wal-Mart as by getting out of its way. This can take the form of either moving upscale by careful store placement and closing certain locations or by changing assortment, typically to become the “anti-Wal-Mart” by emphasizing service, perishables and organic and de-emphasizing conventional groceries, either reducing grocery assortment to make room for larger perishable departments or changing grocery assortment to handle specialized items, say regional sugarcane-based soda rather than Coke and Pepsi.
The whole move to urban stores with small footprints, though justified in various ways, is, in fact, best understood as an effort by conventional supermarket chains to open in places in which a Wal-Mart supercenter is a more distant competitor.
Increasingly, though, Wal-Mart is finding its reputation as the low-price-leader under assault, not so much by conventional grocers but by specialists. Sometimes, these specialists are deep discounters, such as Save-A-Lot and Aldi, but, increasingly, they are ethnic grocers. Indeed, the move by conventional grocers to get out of Wal-Mart’s way facilitates this trend, as grocery chains abandon locations in low-income areas— often areas home to many immigrants—and thus free up locations that are often seized upon by entrepreneurs from various ethnic groups to set up specialized grocers focused on the needs of the local community.
There is much irony here. Wal-Mart built its empire on the “Store of the Community” program, but these ethnic retailers, like many urban independents, have many advantages that make groceries available to people where big chains can’t:
1. Razor-Focused Assortment
Unlike a larger store that must draw from a larger area and thus cater to many demographics, these specialized stores tend to have a highly specific clientele. So every decision on assortment can be measured against the needs and desires of a specific customer. What looks like a store serving Asians to the outsider is actually a store serving Koreans. Sometimes the immigrant community is from a specific city or province and the store focuses on that clientele.
Wal-Mart Supercenter vs 5 Chains
Price Comparison — Lake Worth, Florida
November 2012 – Prices Available To The General Public
| STORE NAME | WALMART | EL BODEGON | PRESEDENTE | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Produce Item | How Priced |
Regular Price |
Regular Price |
% Over Wal-Mart |
Regular Price |
% Over Wal-Mart |
||||||
| Apples – Granny Smith | Lb | 1.77 | 1.59 | -10.17% | 1.49 | -15.82% | ||||||
| Apples – Red Delicious | Lb | 1.57 | 1.79 | 14.01% | 1.29 | -17.83% | ||||||
| Avocados – Hass | Each | 1.18 | 0.69 | -41.53% | 1.00 | -15.25% | ||||||
| Bananas – Yellow | Lb | 0.59 | 0.69 | 16.95% | 1.00 | 69.49% | ||||||
| Broccoli | Each | 2.48 | 2.37 | -4.44% | 2.79 | 12.50% | ||||||
| Cabbage – Green | Each | 0.64 | 0.69 | 7.81% | 1.00 | 56.25% | ||||||
| Cabbage – Red | Each | 0.72 | 0.69 | -4.17% | 2.07 | 187.50% | ||||||
| Carrots – Baby | 12oz Package | 1.78 | 0.89 | -50.00% | 0.89 | -50.00% | ||||||
| Cauliflower | Each | 2.58 | 2.89 | 12.02% | 1.49 | -42.25% | ||||||
| Coconuts | Each | 1.98 | 1.49 | -24.75% | 0.99 | -50.00% | ||||||
| Corn – Yellow | Each | 0.50 | 0.25 | -50.00% | 0.33 | -34.00% | ||||||
| Eggplant | Lb | 1.44 | 0.99 | -31.25% | 0.69 | -52.08% | ||||||
| Grapes – Green Seedless | 11.8 oz | 1.88 | 2.35 | 25.00% | 2.06 | 9.57% | ||||||
| Grapes – Red Seedless | 11.8 oz | 1.88 | 0.88 | -53.19% | 0.81 | -56.91% | ||||||
| Lemons – Bulk | Each | 0.54 | 0.25 | -53.70% | 0.25 | -53.70% | ||||||
| Lettuce – Romaine Bulk | Lb | 1.88 | 1.45 | -22.87% | 1.99 | 5.85% | ||||||
| Limes – Bulk | Each | 0.25 | 0.10 | -60.00% | 0.50 | 100.00% | ||||||
| Mangos | Each | 1.38 | 1.47 | 6.52% | 1.29 | -6.52% | ||||||
| Mushrooms – White Package | Pkg Wgt: 14oz | 2.98 | 2.96 | -0.67% | 3.13 | 5.03% | ||||||
| Onions – Red | Lb | 1.18 | 1.19 | 0.85% | 1.19 | 0.85% | ||||||
| Onions – White | Bag Wgt: 1lb | 1.18 | 0.79 | -33.05% | 0.69 | -41.53% | ||||||
| Onions – Yellow | Lb | 0.98 | 0.49 | -50.00% | 0.50 | -48.98% | ||||||
| Onions – Yellow Bag | Bag Wgt: 3lb | 2.58 | 1.69 | -34.50% | 1.94 | -24.81% | ||||||
| Oranges – Navel | Each | 0.78 | 0.25 | -67.95% | 0.17 | -78.21% | ||||||
| Papayas | Lb | 1.18 | 1.79 | 51.69% | 1.79 | 51.69% | ||||||
| Peaches – California | Lb | 1.78 | 3.89 | 118.54% | 1.69 | -5.06% | ||||||
| Peppers – Green Bell | Each | 0.78 | 0.59 | -24.36% | 0.50 | -35.90% | ||||||
| Peppers – Red | Each | 1.68 | 0.89 | -47.02% | 0.50 | -70.24% | ||||||
| Pineapple | Each | 2.98 | 3.49 | 17.11% | 2.19 | -26.51% | ||||||
| Plantains | Lb | 0.78 | 0.79 | 1.28% | 0.25 | -67.95% | ||||||
| Potatoes – Red Bulk | Lb | 0.98 | 0.59 | -39.80% | 0.20 | -79.59% | ||||||
| Potatoes – Russet 5# | Bag 5lb Bag | 2.97 | 2.59 | -12.79% | 3.75 | 26.26% | ||||||
| Potatoes – White Bulk | Lb | 0.98 | 0.89 | -9.18% | 0.54 | -44.90% | ||||||
| Sweet Potatoes | Lb | 0.88 | 0.49 | -44.32% | 0.50 | -43.18% | ||||||
| Tomatoes – Plum/Roma | Lb | 1.56 | 1.89 | 21.15% | 1.09 | -30.13% | ||||||
| Tomatoes – Regular Large | Lb | 1.74 | 1.19 | -31.61% | 0.69 | -60.34% | ||||||
| MARKET BASKET | 53.01 | 47.97 | -9.51% | 43.24 | -18.43% | |||||||
| Red is adjusted price where package weight is different but can be adjusted for proper comparison. | ||||||||||||
| STORE NAME | WALMART | PUBLIX | SEDANO’S | WINN-DIXIE | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Produce Item | How Priced |
Regular Price |
Regular Price |
% Over Wal-Mart |
Regular Price | % Over Wal-Mart |
Regular Price |
% Over Wal-Mart |
||||
| Apples – Granny Smith | Lb | 1.77 | 2.49 | 40.68% | 1.98 | 11.86% | 1.50 | -15.25% | ||||
| Apples – Red Delicious | Lb | 1.57 | 1.99 | 26.75% | 1.98 | 26.11% | 1.40 | -10.83% | ||||
| Avocados – Hass | Each | 1.18 | 1.00 | -15.25% | 0.79 | -33.05% | 2.00 | 69.49% | ||||
| Bananas – Yellow | Lb | 0.59 | 0.69 | 16.95% | 0.59 | 0.00% | 0.69 | 16.95% | ||||
| Broccoli | Each | 2.48 | 2.50 | 0.81% | 2.49 | 0.40% | 2.50 | 0.81% | ||||
| Cabbage – Green | Each | 0.64 | 3.87 | 504.69% | 1.39 | 117.19% | 0.69 | 7.81% | ||||
| Cabbage – Red | Each | 0.72 | 2.67 | 270.83% | 1.19 | 65.28% | 0.99 | 37.50% | ||||
| Carrots – Baby | 12 oz Package | 1.78 | 1.27 | -28.65% | 1.12 | -37.08% | 1.79 | 0.56% | ||||
| Cauliflower | Each | 2.58 | 3.99 | 54.65% | 3.98 | 54.26% | 2.99 | 15.89% | ||||
| Coconuts | Each | 1.98 | 2.49 | 25.76% | 1.98 | 0.00% | 2.00 | 1.01% | ||||
| Corn – Yellow | Each | 0.50 | 0.82 | 64.00% | 0.50 | 0.00% | 1.00 | 100.00% | ||||
| Eggplant | Lb | 1.44 | 1.69 | 17.36% | 0.99 | -31.25% | 1.69 | 17.36% | ||||
| Grapes – Green Seedless | 11.8 oz | 1.88 | 1.47 | -21.81% | 1.31 | -30.32% | 2.21 | 17.55% | ||||
| Grapes – Red Seedless | 11.8 oz | 1.88 | 1.47 | -21.81% | 1.31 | -30.32% | 2.21 | 17.55% | ||||
| Lemons – Bulk | Each | 0.54 | 0.66 | 22.22% | 0.50 | -7.41% | 0.66 | 22.22% | ||||
| Lettuce – Romaine Bulk | Lb | 1.88 | 1.99 | 5.85% | 1.99 | 5.85% | 3.49 | 85.64% | ||||
| Limes – Bulk | Each | 0.25 | 0.25 | 0.00% | 0.25 | 0.00% | 0.20 | -20.00% | ||||
| Mangos | Each | 1.38 | 1.99 | 44.20% | 1.98 | 43.48% | 1.99 | 44.20% | ||||
| Mushrooms – White Package | Pkg Wgt: 14oz | 2.98 | 3.23 | 8.39% | 3.32 | 11.41% | 3.48 | 16.78% | ||||
| Onions – Red | Lb | 1.18 | 1.35 | 14.41% | 0.95 | -19.49% | 1.25 | 5.93% | ||||
| Onions – White | Bag Wgt: 1lb | 1.18 | 1.29 | 9.32% | 0.79 | -33.05% | 0.99 | -16.10% | ||||
| Onions – Yellow | Lb | 0.98 | 1.00 | 2.04% | 0.69 | -29.59% | 1.25 | 27.55% | ||||
| Onions – Yellow Bag | Bag Wgt: 3lb | 2.58 | 2.99 | 15.89% | 2.99 | 15.89% | 2.50 | -3.10% | ||||
| Oranges – Navel | Each | 0.78 | 1.59 | 103.85% | 1.70 | 117.95% | 2.12 | 171.79% | ||||
| Papayas | Lb | 1.18 | 1.49 | 26.27% | 1.59 | 34.75% | 1.79 | 51.69% | ||||
| Peaches – California | Lb | 1.79 | 2.69 | 51.12% | 1.19 | -33.15% | 1.99 | 11.80% | ||||
| Peppers – Green Bell | Each | 0.78 | 1.50 | 92.31% | 1.50 | 92.31% | 0.85 | 8.97% | ||||
| Peppers – Red | Each | 1.68 | 1.99 | 18.45% | 0.49 | -70.83% | 1.50 | -10.71% | ||||
| Pineapple | Each | 2.98 | 3.42 | 14.77% | 2.88 | -3.36% | 3.99 | 33.89% | ||||
| Plantains | Lb | 0.78 | 0.67 | -14.10% | 1.50 | 92.31% | 1.19 | 52.56% | ||||
| Potatoes – Red Bulk | Lb | 0.98 | 1.33 | 35.71% | 2.19 | 123.47% | 0.80 | -18.37% | ||||
| Potatoes – Russet 5# | Bag 5lb Bag | 2.97 | 3.99 | 34.34% | 2.74 | -7.74% | 3.75 | 26.26% | ||||
| Potatoes – White Bulk | Lb | 0.98 | 1.39 | 41.84% | 0.57 | -41.84% | 0.80 | -18.37% | ||||
| Sweet Potatoes | Lb | 0.88 | 0.99 | 12.50% | 0.99 | 12.50% | 0.99 | 12.50% | ||||
| Tomatoes – Plum/Roma | Lb | 1.56 | 1.99 | 27.56% | 1.79 | 14.74% | 1.28 | -17.95% | ||||
| Tomatoes – Regular Large | Lb | 1.74 | 2.29 | 31.61% | 2.19 | 25.86% | 1.69 | -2.87% | ||||
| MARKET BASKET | 53.01 | 68.49 | 29.20% | 56.38 | 6.36% | 62.21 | 17.36% | |||||
| Red is adjusted price where package weight is different but can be adjusted for proper comparison. | ||||||||||||
Price wise, this opens up opportunities. If the clientele is the type that likes to make salsa, a soft tomato — a product that would be rejected by a major chain — is a perfect buy and often is a bargain to boot. It is very difficult for Wal-Mart — and conventional supermarket chains in general — to compete on this level.
2. Flexible Merchandising
The best buys in the world don’t help that much unless merchandising is flexible. These ethnic retailers can turn their stores on a dime. So if someone on a terminal is hung with peaches that are getting a little ripe, they will offer them at a price well under market to these specialized retailers. Because these retailers can change things around to move product, they will counter-offer with an even lower price and an offer to clean the vendor out. The offers are often accepted. This might all happen at 8:00 AM, after the terminal market has finished its daily business and knows what it is stuck with. By noon, the product is in the stores and the whole store has been remerchandised to greet customers with a giant display of the peaches at half the price Wal-Mart is selling them.
3. Buy from Anyone
Most chains now have a roster of food safety and other requirements that tend to constrain their supply chains. They can’t accept a great deal from an unknown vendor because the company wouldn’t even have a vendor number. Efforts to get around these requirements are much less accepted than before.
Many of these ethnic chains don’t constrain their supply chains; they buy produce from wholesalers, brokers and shippers based on price, quality and service. It gives them access to deals that the big boys can’t touch.
4. Regulatory Relief
Although the rules generally apply to retailers both large and small, in practice, the ethnic specialists slip under the regulatory radar. Partly this is because the regulators focus on bigger players, partly because ethnic markets are more closed—people complain to regulators less, the inspectors come into the neighborhoods less, etc. Finally, the quick turn-around merchandising philosophy means many violations are gone before anyone notices.
In procurement, it means that if a wholesaler has a rejected load of, say, spinach bagged for foodservice, these retailers may buy it, even though it is not labeled in a way to be legal for sale to consumers. They get it at a bargain price, blow it out and it is only in the stores for a few hours. Most likely nothing will happen, but Wal-Mart wouldn’t touch it.
How They Stack Up Against Wal-Mart Supercenter
| Region | Store | % Over Wal-Mart |
Store | % Over Wal-Mart |
Store | % Over Wal-Mart |
|---|---|---|---|---|---|---|
| Connecticut-5/02 | Super Stop & Shop | 23% | Shaws | 34% | Big Y | 36% |
| Salt Lake City-10/02 | Harmon’s | 2% | Smith’s | 6% | Albertson’s | 12% |
| South Florida-2/03 | Super Target | 22% | Publix | 31% | Winn-Dixie | 52% |
| Dallas, Texas-10/03 | Albertsons | 23% | Brookshires | 7% | Kroger | 19% |
| Neighborhood Market | —1.2% | Tom Thumb | 27% | |||
| Portland, OR-3/04 | Albertsons | 30% | Fred Meyer | 22% | Haggen | 27% |
| Safeway | 37% | |||||
| Phoenix, AZ-8/04 | Albertsons | 22% | Bashas’ | 25% | Fry’s | 15% |
| Safeway | 17% | |||||
| Palm Springs-10/04 | Albertsons | 19% | Jensen’s | 60% | Ralphs | 16% |
| Vons | 20% | |||||
| Detroit, MI-1/05 | A&P Food Basic | —17% | Farmer Jack | 24% | Kroger | 28% |
| Meijer | 3% | |||||
| St. Louis, MO-5/05 | Dierbergs | 22% | Schnucks | 14% | ||
| Houston, TX-9/05 | HEB | 15% | Kroger | 30% | Fiesta Mart | .—0.3% |
| Atlanta, GA-11/05 | Harry’s | 18% | Ingles | 16% | Kroger | 25% |
| Publix | 13% | Target | 3% | |||
| Denver, CO-5/06 | Albertsons | 16% | King Sooper | 21% | Safeway | 25% |
| Portland, OR-10/06 | Albertsons | 32% | Fred Meyer | 21% | QFC | 54% |
| Safeway | 30% | |||||
| Toronto, Canada-7/07 | A&P | 35% | Brunos | 28% | Loblaws | 13% |
| Sobeys | 45% | |||||
| Kansas City, KS-10/07 | Dillions | 20% | Hen House | 15% | Hy Vee | 18% |
| Price Chopper | 13% | |||||
| Los Angeles-4/08 | Fresh & Easy | 15% | Stater Bros | 8% | Ralphs | 25% |
| Vons | 14% | |||||
| Orlando, FL-10/08 | Publix | 32% | Super Target | 22% | Whole Foods | 38% |
| Winn Dixie | 28% | |||||
| Phoenix, AZ 4/09 | Wal-Mart Marketside | 23% | Wal-Mart Neighborhood | 7% | Bahas | 30% |
| Fresh & Easy | 32% | Fry’s | 27% | Safeway | 37% | |
| Raleigh, NC 9/09 | Food Lion | 24% | Fresh Market | 31% | Harris Teeter | 35% |
| Kroger | 21% | Super Target | 11% | |||
| Philadelphia 4/10 | Acme | 17% | Genuardi’s | 22% | Giant | 26% |
| Super Fresh | 21% | Wegmans | 5% | |||
| New Jersey 10/10 | FoodBasics | —1% | Pathmark | 15% | ShopRite | 8% |
| Dallas 10/11 | Albertson’s | 25% | Central Market | 19% | Kroger | 21% |
| Sprouts | —7% | Super Target | 10% | Tom Thumb | 51% | |
| Savannah 6/12 | Food Lion | 7% | Fresh Market | 51% | Kroger | —2% |
| Piggly Wiggly | 27% | Publix | 22% | |||
| Lake Worth, FL 11/12 | El Bodegon | -9.5% | Presidente | -18.4% | Publix | 29% |
| Sedano’s | 6.47% | Winn-Dixie | 17.4% |
5. Family Crime-Watch
In many areas, retailers suffer from a great deal of theft—at the front-end, the back-end and from shoplifting customers. Typically, these ethnic retailers have many family members on watch who are willing to risk violence to stop theft. Wal-Mart has nothing like this.
In addition, in many ethnic communities, the social opprobrium that would come from stealing from “their own” makes the problem more manageable.
Plus, ethnic retailers sometimes have some extra-legal methods of dealing with crime. Calling the police, pressing charges, etc., is a long, drawn-out, often expensive method of dealing with crime. Taking some guy down to the basement and explaining to him, in a physical way, why he ought to steal somewhere else is often cheaper and more effective.
Wal-Mart Supercenter vs 5 Chains
Price Comparison — Lake Worth, Florida
November 2012 – Cardholder Prices
| STORE NAME | WALMART | EL BODEGON | PRESEDENTE | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Produce Item | How Priced |
Regular Price |
Regular Price |
% Over Wal-Mart |
Regular Price |
% Over Wal-Mart |
||||||
| Apples – Red Delicious | Lb | 1.57 | 1.79 | 14.01% | 1.29 | -17.83% | ||||||
| Avocados – Hass | Each | 1.18 | 0.69 | -41.53% | 1.00 | -15.25% | ||||||
| Cabbage – Green | Each | 0.64 | 0.69 | 7.81% | 1.00 | 56.25% | ||||||
| Carrots – Baby | 12oz Package | 1.78 | 0.89 | -50.00% | 0.89 | -50.00% | ||||||
| Corn – Yellow | Each | 0.50 | 0.25 | -50.00% | 0.33 | -34.00% | ||||||
| Grapes – Red Seedless | 11.8 oz | 1.88 | 0.88 | -53.19% | 0.81 | -56.91% | ||||||
| Lettuce – Romaine Bulk | Lb | 1.88 | 1.45 | -22.87% | 1.99 | 5.85% | ||||||
| Mushrooms – White Package | Pkg Wgt: 14oz | 2.98 | 2.96 | -0.67% | 3.13 | 5.03% | ||||||
| Onions – Red | Lb | 1.18 | 1.19 | 0.85% | 1.19 | 0.85% | ||||||
| Onions – Yellow | Lb | 0.98 | 0.49 | -50.00% | 0.50 | -48.98% | ||||||
| Oranges – Navel | Each | 0.78 | 0.25 | -67.95% | 0.17 | -78.21% | ||||||
| Pineapple | Each | 2.98 | 3.49 | 17.11% | 2.19 | -26.51% | ||||||
| Potatoes – Russet 5# Bag | 5lb Bag | 2.97 | 2.59 | -12.79% | 3.75 | 26.26% | ||||||
| Sweet Potatoes | Lb | 0.88 | 0.49 | -44.32% | 0.50 | -43.18% | ||||||
| MARKET BASKET | 53.01 | 47.97 | 9.51% | 43.24 | 18.43% | |||||||
| Red is adjusted price | ||||||||||||
| STORE NAME | WALMART | PUBLIX | SEDANO’S | WINN-DIXIE | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Produce Item | How Priced | Regular Price* |
Regular Price* |
% Over Wal-Mart |
Regular Price* |
% Over Wal-Mart |
Regular Price* |
% Over Wal-Mart |
||||
| Apples – Red Delicious | Lb | 1.57 | 1.99 | 26.75% | 1.98 | 26.11% | 1.20 | -23.57% | ||||
| Avocados – Hass | Each | 1.18 | 1.00 | -15.25% | 0.79 | -33.05% | 0.99 | -16.10% | ||||
| Cabbage – Green | Each | 0.64 | 3.87 | 504.69% | 1.39 | 117.19% | 0.59 | -7.81% | ||||
| Carrots – Baby | 12 oz Package | 1.78 | 1.27 | -28.65% | 1.12 | -37.08% | 1.50 | -15.73% | ||||
| Corn – Yellow | Each | 0.50 | 0.82 | 64.00% | 0.50 | 0.00% | 0.65 | 30.00% | ||||
| Grapes – Red Seedless | 11.8 oz | 1.88 | 1.47 | -21.81% | 1.31 | -30.32% | 1.47 | -21.81% | ||||
| Lettuce – Romaine Bulk | Lb | 1.88 | 1.99 | 5.85% | 1.99 | 5.85% | 2.99 | 59.04% | ||||
| Mushrooms – White Package | Pkg Wgt: 14oz | 2.98 | 3.23 | 8.39% | 3.32 | 11.41% | 2.63 | -11.74% | ||||
| Onions – Red | Lb | 1.18 | 1.35 | 14.41% | 0.95 | -19.49% | 1.00 | -15.25% | ||||
| Onions – Yellow | Lb | 0.98 | 1.00 | 2.04% | 0.69 | -29.59% | 1.00 | 2.04% | ||||
| Oranges – Navel | Each | 0.78 | 1.59 | 103.85% | 1.70 | 117.95% | 1.91 | 144.87% | ||||
| Pineapple | Each | 2.98 | 3.42 | 14.77% | 2.88 | -3.36% | 2.98 | 0.00% | ||||
| Potatoes – Russet 5# | Bag 5lb Bag | 2.97 | 3.99 | 34.34% | 2.74 | -7.74% | 2.50 | -15.82% | ||||
| Sweet Potatoes | Lb | 0.88 | 0.99 | 12.50% | 0.99 | 12.50% | 0.79 | -10.23% | ||||
| MARKET BASKET | 53.01 | 68.49 | 29.20% | 56.38 | 6.36% | 55.00 | 3.75% | |||||
| Red is adjusted price | ||||||||||||
Back To The Competition
For all the above reasons and more, ethnic retailers can thrive even as Wal-Mart attacks. Such is the case in Lake Worth, FL, where the 24th edition of The Produce Business Wal-Mart Pricing Report has rolled into town. It is not really a shock that Lakeland, FL-based Publix—by far the market leader—gets blown out of the water by Wal-Mart, coming in with a price level 29.2 percent over Wal-Mart. This is fairly common in markets where a dominant supermarket chain exists. Supermarket chains price against each other, so if there is a dominant player, it tends to price high. Jacksonville, FL-based Winn-Dixie also gets blown out of the water, coming in with a price level 17.36 percent over Wal-Mart. But astounding 18.43 percent and took the crown in this the 24th edition of The Produce Business Wal-Mart Pricing Survey.
Supermarkets have long-learned that the competitive environment has changed and that the big competition is not necessarily another conventional grocery store opening across the street. Instead, the competition is a new supercenter in the region, a warehouse club, a Whole Foods, an Internet shopping service… None of these kill the grocer, but if each takes three or four percentage points off sales, it is tough to survive.
Now Wal-Mart may be finding that its challenge comes not from Target opening more supercenters or even giants, such as Kroger and Safeway, with whom it has managed to co-exist, but from hundreds, maybe thousands, of ethnic stores that do things Wal-Mart can’t do well and can kill Wal-Mart on pricing while making a buck.
That is a powerful competitor indeed.
We will look to future editions of the Produce Business Wal-Mart Pricing Report to see how widespread this phenomenon is becoming.