This post comes from Raechel Conover at partner site Cheapism.com.
Could Wal-Mart be a better place to buy groceries than the grocery store?
Cheapism.com recently priced out 26 products with identical brand names at Kroger and Wal-Mart and found Wal-Mart to be the low-price leader on 20. After factoring in savings available with the Kroger Plus Card, the grocery chain claimed cheap-price supremacy on one more item for a total of only seven. The products that cost less at Wal-Mart were more than 20 percent cheaper on average.
Consumers seem to have noticed. A recent survey by King Retail Solutions found that non-grocers such as Wal-Mart and Target are increasingly luring shoppers with low prices and the big-box convenience of one-stop shopping. Indeed, a laser-like focus on name-brand prices clearly pinpoints Wal-Mart as a smarter choice than Kroger for frugal consumers.
But other factors argue for keeping Kroger in the mix. When Cheapism expanded its grocery store comparison
to include store brand products and loyalty-card prices, Wal-Mart's price edge shrunk to pennies less than $1.
Here's a closer look at the two contenders.
The king of budget retailing is hard to beat on price. For an in-store shopping cart comparison
, Cheapism gathered 37 products that rang up to $85.88, nearly $8 less than Kroger. Among these foodstuffs were the 26 national and regional brands, many of which cost less than the exact same items at Kroger. Moreover, bring in a competitor's ad showing a lower price for a product with the same brand name, flavor/contents, and quantity, and Wal-Mart will match it at the register.
Wal-Mart clearly flexes its competitive muscle on the pricing front even as it lags Kroger in several ways. The selection at Wal-Mart was less robust and consumers who posted online reviews
or responded to a Facebook poll offered mixed opinions about Wal-Mart's store brand, Great Value. Whereas one shopper equated Great Value with great quality, others asserted the opposite. Several shoppers we interviewed said Wal-Mart is the place to buy some items, such as canned goods and nonperishables, but the produce section disappoints.
Another issue dogging Wal-Mart is its reputation. Cheapism has ventured into different locations for several reports involving Wal-Mart and not once encountered the type of poor customer service and chaotic atmosphere often described in Wal-Mart reviews. Although the sheer number of critical comments about Wal-Mart may be hard to ignore, they may be overstated and/or inapplicable to any given location.
The simple truth: It costs more to shop at Kroger than at Wal-Mart. The grand total for Cheapism's 37-item shopping cart came to $93.73 -- $7.85 higher than Wal-Mart. However, when accounting for savings with the Kroger Plus Card, the bottom line dropped to $86.78, within $1 of the discount retailer. Holders of the Kroger loyalty card also benefit from Fuel Rewards, which yield savings on gasoline bought at Kroger and some Shell service stations.
Even the big-box Kroger Marketplace outlets are more like traditional grocery stores than Wal-Mart, with its all-encompassing inventory. Accordingly, the selection of foodstuffs is broader at Kroger. For example, Kroger stores operate full-service meat, seafood, and deli counters whereas Wal-Marts typically operate only a deli and sell prepackaged meats and seafood. The in-house Kroger brands, including the low-price Kroger Value label, receive high praise from consumers and industry experts. Private Label Store Brands magazine named Kroger Retailer of the Year in 2013 and pointed out that Kroger adapts its lineup in response to customers' changing preferences. The Simple Truth and Simple Truth Organics labels, for example, were introduced as healthier alternatives at affordable prices.
Cheapism's grocery shopping comparison
also found that Kroger offers a pleasant customer experience. Employees were helpful and open checkout lanes were plentiful during peak hours on the day we visited. Consumers we interviewed mentioned the homey atmosphere and friendly staff.
Calling the winner of a Kroger vs. Wal-Mart face-off is difficult. On price alone, Wal-Mart takes the crown. But savvy leveraging of loyalty-card savings plus greater grocery variety, a reputation for slightly better product quality, and an arguably brighter experience suggest that Kroger should not be ruled out as a destination for frugal shoppers.
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