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The Grocery Gap

February 23, 2011, 9:55 PM by Don Jorgensen

The Grocery Gap
SIOUX FALLS, SD - How much do you pay at the grocery store for a gallon of milk ? How about a loaf of bread or a box of cereal? Grocery prices can vary depending where you shop.

But you might be surprised to find out, they can also vary at the same chain.  For instance, what you pay for dish soap at one Hy-Vee may not be the same price you pay at one across town.

We took a hidden camera into three of Sioux Falls' larger chains to look for grocery disparities. And some of the differences may be a little tough to swallow.

Grocery shopping can take a big bite out of a family budget. That's why people are always looking for the best deals. But even a store with the same name won't always offer the same price.

Using a hidden camera, we randomly checked products at two Hy-Vees, both Target stores and both Wal-Marts in Sioux Falls and found their prices aren't always the same for the exact same item.

For instance, at the east-side Wal-Mart, Frosted Flakes cereal was $2.98 but when we checked the west-side store the very same day, it was ten cents cheaper.

At the east-side Target, Folgers House Blend coffee was $8.79, but the west-side store sold it for 30 cents cheaper.

At the East 10th Street Hy-Vee, Premium Crackers were $2.18, but on the very same day at the Hy-Vee store on South Cliff Avenue, they were $1.19, almost a dollar cheaper. 

"It's upsetting to spend that extra money," Diane Gannon said. 

Diane says she's pretty fussy when it comes to grocery shopping, always looking for specials. 

"It does surprise me because you'd think they'd all be the same, but they're not," Diane said.

A six pack of Shiner Bock beer was $7.69 at East 10th, $7.99 on South Cliff. 

"If you're shopping at a Hy-Vee store I'd think their prices should all be the same.  Why should one store be different?" George Gannon said.

We were wondering the same thing so we took their questions to one of the store directors to get some answers. 

"The vast majority of the items we price together within the Sioux Falls market," John Griessenbrock said.

John Griessenbrock is the store manager at Hy-Vee on South Cliff Avenue.  He says 90 to 95 percent of Hy-Vee's items are priced the same, but sometimes store managers will reduce the price on something to try and sell it quicker in order to make room for other products. 

"I think all stores and all store directors understand who they are trying to serve and their clientele they have around their store and that does go into their decision making," Griessenbrock said. 

"I think they have a pretty good grasp on what a particular neighborhood expects what price they expect that item to be listed at and how much they'll be willing to spend for it," Jaciel Keltgen of Augustana's business department said.

Keltgen says studies have shown, people who shop in wealthier neighborhoods can sometimes pay a little more for certain products. 

"They pretty much know what the going rate is for a particular item, but they also know what the market will bear," Keltgen said.

Even so, Keltgen says they're not gouging people for a profit because most grocery stores only have a one to three percent mark up. 

"I would say no, they're not making a killing.  But they're making good business decisions based on they know what consumers want and what their costs are and what their profit margins ought to be," Keltgen said.

Some customers don't seem to mind, like Holly Jacobson. She says paying a little extra for an item doesn't bother her. 

"No, not really because this is close to home and I'd rather have the convenience of being close to home and there not that big of a difference," Jacobson said.

But for others, it makes no sense. 

"It's awful and I get rather grumpy," Diane said.

Keltgen also says most of us are routine shoppers.  We go the store on the same day of the week and generally buy the same things, no matter how they're priced.

Wal-Mart and Target both told us their stores have the ability to change prices to make them competitive with other stores in the area.

This article has been revised to reflect the following correction:
Content featuring a dishwasher soap price comparison was deleted because both products were not the same size.

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