HONOLULU, HAWAII—Do comparative grocery price surveys help keep food prices down?
Here in Hawaii’s largest city where food prices are higher than in any other city in the United States except Anchorage, Alaska, the local newspaper, Honolulu Advertiser, has been printing for several years what a list of staple foods costs consumers at specific supermarkets. The survey is conducted by the state Department of Agriculture and printed weekly.
It has not been an entirely smooth reader service. Some supermarket chains disliked having their prices compared with their competitors and one chain Foodland—once temporarily pulled their ads out in protest, according to one newspaper source.
The Advertiser’s managing editor, Mike Middlesworth, says the surveys are well-read and appear to have a moderating effect on food prices. That is to say the prices would be even higher without this weekly consumer information.
While there has not been a systematic study of the effect of Honolulu’s grocery surveys, two analyses of these surveys in the Midwest have concluded that prices do go down.
Indiana University economics professor Samuel M. Loescher had his graduate students study price surveys of 150 different food items in seven Bloomington, Indiana, stores printed each month for the past eight years in the large college newspaper. “The result,” he said, “is that Bloomington’sprices are lower than prices in any of the other communities around here. The stores know that someone is looking over their shoulders, so the prices stay down.”
Many grocery chains refuse to admit that the price surveys affect their pricing decisions. A Kroger’s spokesman said that his company “pretty much ignores” them.
This asserted indifference does not square with the virulent reaction by food chains to a 12-week study supported by the U.S. Department of Agriculture. A Purdue Agricultural economist, Joseph N. Uhl, initiated a project where newspapers published comparative grocery prices weekly in four cities and the results were compared with four control cities where no such surveys were available to consumers.
According to Professor Uhl, the response ranges from nothing by stores in South Bend, Indiana, to a price-cutting war in Springfield, Missouri. The supermarkets in the four surveyed cities, Uhl asserted, brought pressure on Purdue, on the state government and on the local newspapers reporting the survey. Three of the four newspapers pulled out of the project before the conclusion of the 18-week study period, even though prices fell in three of the test cities compared to the non-surveyed cities.
Once the price comparisons stopped appearing, Uhi said, the relative prices went back up in all four cities.
As they do in Bloomington, Indiana; college students can assemble such surveys. As part of their economics or marketing classes, they can publish them in their school newspapers all over the country. With such widespread impact, perhaps the grocery chains will find it futile to pressure regular newspapers to drop a valuable information service for readers.
While there are reasons other than price to patronize a store, and while these price surveys, though accurate, do not pretend to include the many non-staple products on the shelves, they provide more information than consumers individually ever could provide for themselves. And that assistance stimulates competition and helps fight inflation.