Inflation has been one of the biggest concerns among investors this holiday season, particularly when it comes to rising grocery prices.
Bank of America recently conducted a food retailer pricing study in the city of Nashville to identify which food retailers are hiking prices the most and determine where consumers can still find the lowest prices.
Analyst Robert Ohmes compared grocery prices at conventional supermarkets Kroger Co. and Publix to prices at specialty grocers Sprouts Farmers Market Inc. and Amazon.com Inc. subsidiary Whole Foods, as well as mass retailers Walmart Inc. and Target Corporation.
In addition, Ohmes conducted a dollar store price comparison that included Kroger, Walmart, Target, Dollar General Corp., and Dollar Tree Inc. subsidiary Family Dollar. Ohmes also assessed pricing at private label deep discounter Aldi.
Ohmes compared his recent results to an identical survey he conducted in Nashville in 2019 to look for two-year changes in pricing.
The grocery study included a basket of 43 grocery items, including 15 produce items, three meat items, 12 dairy items, and 13 center store items.
Ohmes found the lowest price on the 43 grocery items was $104 at Walmart. Surprisingly, Walmart’s total basket price on the same 43 items was up just 69 cents from 2019, a two-year price increase of just 0.66 percent.
Kroger had the next lowest prices among the grocery retailers at $117.24, about 13 percent higher than Walmart. Walmart has widened its Kroger pricing gap from just 7 percent in 2019. Target was a close third at a 14 percent premium to Walmart, followed by Sprouts Farmers Market (+35 percent), Publix (+37 percent), and Whole Foods (+42 percent). Walmart has expanded its pricing discounts compared to all five grocery competitors.
In fact, the only retailer to take down Walmart on pricing was Aldi. Ohmes completed a separate pricing comparison of Walmart versus Aldi on a basket of 62 total items and found Aldi’s prices were about 4 percent lower than Walmart’s. However, Walmart has narrowed the pricing gap from 7 percent back in 2019.
Ohmes also compared Walmart, Target, Dollar General, Kroger, and Family Dollar on pricing for a basket of 52 dollar store items, including six dairy items, 33 center store items, and 13 household and personal care items.
Not surprisingly, Walmart again came out on top with a total basket cost of $145.16, up 10.4 percent compared to 2019. Target and Dollar General were a close second and third in cost at roughly 3 percent premiums to Walmart. Kroger and Family Dollar were both priced at about a 10 percent premium to Walmart.
Prices are clearly trending higher, but grocery prices at Walmart have remained surprisingly steady over the past two years. Walmart and Aldi clearly have the lowest prices among the group of grocery and dollar store retailers this holiday season.