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High price of groceries in Maine due to lack of competition, expert says

Robert F. Bukaty | BDN
Robert F. Bukaty | BDN
A shopper loads groceries into her car at a Hannaford's grocery store in Auburn, Maine, Friday, Dec. 16, 2011.
By Erin Cox, Sun Journal

RUMFORD, Maine — Finding deals and sales has become a game for some, but in Maine, some grocery stores are stacking the deck.

Teri Gault, CEO of The Grocery Game, an online company that combines store specials and grocery coupons, and tracks sales to help shoppers, attributes the high price of groceries to a lack of competition in Maine.

According to the Maine Center for Workforce Research and Information, Hannaford was the largest employer in the state in 2011, with a range of 7,000 to 7,500 employees. Walmart is listed as the second-largest employer.

Hannaford, which is owned by Delhaize America and has more than 1,500 stores on the Eastern Seaboard, has about 55 stores in Maine.

Walmart’s presence is much lower, with 17 supercenters and five discount centers. Shaw’s, which had its start in Portland in 1860, has 22 stores in the state.

Sales fliers distributed last week for Hannaford stores in Maine and New Hampshire showed, on average, Mainers pay more for multiple products. Price differences on some products ranged from 20 cents to more than $5. Further research reveals a greater difference between Maine and more populated areas such as Boston.

Lauren Haines, who is originally from Dixfield and now lives in New Hampshire, said, “I notice quite a difference in prices from here to Maine between Hannaford and Shaw’s.”

For example, a pound of carrots here is 69 cents, but in Maine it’s $1.29, she said.

In this week’s flier, a Hannaford’s 34-ounce Hot Rotisserie Chicken cost $6.49. In Hudson, N.H., the same chicken cost $4.99, a $1.50 difference.

Eric Blom, external communications manager for Hannaford, said the price on promotional items in fliers can differ by market but the store does not discuss pricing strategies for specific items, for competitive reasons.

“We employ what is known in the industry as an everyday-low-price strategy that uses a less promotional marketing model, which helps us keep prices down across the store week after week,” he said.

Gault disagreed, saying Hannaford and similar chain stores are considered a high/low market where everyday items are priced higher than normal and promotional items are generally lower than competing everyday-low-price chains such as Walmart.

Shaw’s, another high/low chain store in Maine, does not vary its promotional sale items from state to state. Gault said that’s because the company has a more standardized pricing structure.

Steve Sylven, a spokesman for Shaw’s, said his company tries to keep stores consistent across the board.

“We try to maintain a consistent price, but there is no cookie-cutter way to do promotions,” he said.

Sylven said reasons vary — such as cost of goods, inflation and gas prices — for how the store prices products.

Gault said a shopper normally will go to only one store when they see a sale and continue to shop for the remaining items on their list. She says when a shopper fills up with a few promotional items but continues to buy higher-priced everyday products, the store comes out ahead.

Gault’s advice is to shop the promotional items each week at the high/low chains, which normally are lower than stores like Walmart, and stock up on those products.

Some local shoppers in Maine say they do just that and also hit stores in other areas when they travel.

Tammy Schmersal of Mexico said she often will shop in Farmington when she is there for other reasons and will make stops at several locations to get what is on her list.

“I buy what’s on sale and buy multiple items and freeze it,” she said.

“I stopped at Food City in Farmington and got two bags of fresh spinach for the price of one bag at Hannaford,” she said. “I go to Save-A-Lot and spend $40 and come out with bags, not one or two, but three or four, and then down the road at the bread store where I can get bread for a dollar.”

Tessa Manzer of Rumford said she often shops in Lewiston when she commutes for school.

“I try to run into Hannaford for produce and meat, but it gets expensive,” she said. “I try not to complain, because it is a better product than, say, Walmart, but as a struggling family there are some corners we have to cut. I sometimes shop at Walmart in Lewiston because the price difference is huge and I’m already there for school.”

Gault, who began her business after her knack for predicting sale trends turned into a passion, said finding deals is a game worth playing.

“You just have to be a smart shopper,” she said.

To see more from the Sun Journal, visit sunjournal.com.


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