By Christine Blank, Contributing Editor
Published on Wednesday, July 29, 2009
The cost of groceries varies across the country, but it is generally lower in Chicago and higher in New York City and Los Angeles, according to a new study.
Market research firm IBIS World found that a basket full of groceries across the three cities averaged USD 102.40 (EUR 73) for store-brand products — including canned tuna, ground beef, apples and toilet paper — USD 119.47 (EUR 85.17) for name-brand products and USD 140.95 (EUR 74.82) for organic products. IBISWorld surveyed the prices of 30 staple food items at four different retailers, including Whole Foods Market.
In addition, organic food was priced 18 percent higher than its brand-name counterparts and 37.6 percent higher than store brands, but shoppers are still buying organics.
“We think that spending for organic food products is going to grow 4 percent this year, while overall grocery retail sales will be relatively flat [at 1.2 percent growth] this year,” said George Van Horn, senior analyst at IBISWorld in Los Angeles.
Canned tuna prices were generally lower in Los Angeles supermarkets, likely because of the city’s proximity to ports and Pacific tuna.
“Los Angeles was the most competitive, then New York, and Chicago was last,” said Van Horn. Still, store-brand tuna prices did not vary as widely as conventional and natural prices.
A 6-ounce can of store-brand albacore tuna was USD 1.50 on average in Los Angeles, USD 1.49 in New York City and USD 1.89 in Chicago. Meanwhile, albacore tuna at an organic/natural store in Los Angeles was USD 4.99 for a name brand and USD 6.59 for the natural version. At a conventional supermarket in the city, name-brand tuna averaged USD 2.55, as did the organic tuna.
Meanwhile, IBISWorld found that shoppers are buying more of the less expensive store-brand products, said Van Horn.
“People are becoming more and more accepting of stores brands, and the quality differences are not enough to pass them by [for commercial brands],” he noted.
And, to make up for higher organic prices, organic shoppers are “re-balancing how much of the store brands they buy, relative to conventional brands and relative to organic,” said Van Horn.
Shoppers of organic products had the highest overall grocery bill in Chicago, followed by New York and Los Angeles. “This is due to Los Angeles’ proximity to Mexico, as well as the high volume of food production in California,” explained IBISWorld.