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At the grocery store, stick to groceries

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By Jaclyn J. Beierlein

Sunday, November 26, 2017

One day as I rounded the produce section of my favorite local grocery store, I came across a lovely 3-piece patio furniture set.

Though I was not looking for such a set, I liked it and it was “on sale”, so I considered it. However, it was the only set offered, so I could not compare its attributes and price to others. Besides, I was wary of buying something so far out of the “grocery” line of expertise.

Later that same shopping trip, I saw a bird feeder. Again, not a traditional grocery item in what I would consider a traditional grocery store. This is not a big box store that has expanded to offer groceries. The experience made me wonder how many “non-grocery” items were in the store and how their pricing compared to similar items sold in big box stores.

I asked my graduate assistant, David Hatfield, an MBA student at ECU, to do some investigative shopping and price comparisons. He looked for non-grocery items, made note of their brand, relative quality and price. Then he looked for similar items at a local big box store to compare prices.

The bottom line: he compared 17 non-grocery items and every single one was cheaper at the big box store. On average, the grocery store price was about twice the big box price. Furthermore, the big box store offered a variety of quality and price offerings for each of the items while the grocery store offered only one.

Four of the items he investigated were related to food preparation: a 12 inch non-stick pan, a pie dish, a 3 quart baking dish and a water pitcher. The total price for these at the grocery store was $92.96 compared to $42.79 at the big box store.

Seven items were related to the kitchen and bathroom: a laundry basket, trash can, soap dispenser, paper towel holder, shower curtain and rings, and a sink organizer. The total price for these at the grocery store was $118.93 compared to $64.01 at the big box store.

For the home office or entertainment center, an extension cord and surge protector came to $35.98 at the grocery store or $16.44 at the big box store. Finally, three outdoor living products: a Coleman cooler, a dog leash and a bird feeder cost $74.97 at the grocery store and $46.94 at the big box store.

Oh and that patio furniture? When both locations had 3 piece furniture sets on sale, the grocery store’s set was $130.00 more than the big box store’s. When neither one was on sale, the grocery store’s set was $230.00 more.

Please note that as much as my graduate assistant tried to compare products of similar quality, there may be quality differences that justify some of the higher prices of the grocery store items.

However, it is very clear to me that whenever I am tempted to purchase a non-grocery item at my local grocery store, I need to stop and ask myself two question: 1) Do I need this today? If so, 2) is the convenience of buying this here rather than going to another store a few miles away worth the risk that I may be paying twice as much?

When I’m busy (or it’s raining cats and dogs) and the need is immediate, I might be willing to pay more for the convenience of one-stop shopping, particularly when the price of the item is less than $20. Otherwise, I will put that item on my big box store shopping list and pick it up next time I’m there.

Jaclyn J. Beierlein is an associate professor of finance in the College of Business at East Carolina University.