A year after a price war erupted among Washington's supermarket chains, grocery prices on the most frequently purchased items have begun to rise, according to a survey conducted last week by The Washington Post.
However, the survey also showed that 30 of the most popular items still cost, in total, less than they did before the price war was launched by Giant Food Inc. on Sept. 17, 1986.
The Post survey was conducted exactly a year after Giant, the area's largest supermarket, announced "a warehouse price program" and lowered prices on more than 2,000 items in its stores by 5 percent to 25 percent. Safeway, the second-largest chain here, quickly followed suit. An identical survey was conducted in October 1986, just three weeks after the price war was started, to examine its impact on grocery bills.
The current price check showed that in all but two stores, the bill for the most frequently purchased items climbed between October 1986 and mid-September 1987. The increases ranged from 0.6 percent to 5.6 percent. The exact increase depended on the store surveyed, with a conventional Giant -- one not near a no-frills "warehouse" rival -- ringing up the smallest increase and a Shoppers Food Warehouse store tallying up the largest.
Prices at Magruder's and Super Fresh, on the other hand, dropped about 6 percent between October and last week, the price check showed.
"We never said that prices wouldn't go up," said Giant spokesman Barry Scher. "Our warehouse pricing program was not intended to be a price freeze. Prices are determined on many factors, including what our suppliers charge as well as what our competitors are charging."
The original price war has "kind of petered out," added Safeway spokesman Brian Dowling. "It's no longer an all-out price war."
All chains continue to feature weekly advertised specials, with some chains offering as much as 50 percent off on a handful of goods.
Despite the fact that prices may be edging up, the Post's price check showed that current bills for the frequently purchased goods are between 4 percent and 14 percent lower than those rung up before the price war began.
The price check is not a market-basket list that tries to duplicate a typical shopping trip. Nor was it used to determine which chain's prices are the cheapest. Rather, the narrow survey was designed to monitor the overall fluctuations in food prices as a result of the price war.
Last week, the price war took on a new twist when Giant launched a new advertising campaign, once again comparing its prices with Safeway, Shoppers Food Warehouse, Basics and Super Fresh (the new name for A&P stores in this area.) Giant's ad cited selected sale items to support its claim that its prices were 13 percent to 20 percent less than local rivals.
Giant's competitors were quick to criticize the comparisons, noting the ad's statement that the items selected included only specials Giant was offering at the time.
"They are all specials -- big deal," said Mark Polsky, a vice president of Magruder's, which wasn't included in the comparison ad. "I could run a tape like that and beat the world," he added.
"I think Giant's ads should be called dishonest," charged Kenneth Herman, president of Shoppers Food Warehouse. "They are a cheap shot. They give the impression that everything they are selling is at lower prices than their competitors."
Specifically, Herman pointed to the Band-Aids in Giant's ads, selling at 99 cents under a half-price special at Giant stores. At Shoppers Food Warehouse, the same item cost $1.18. "That's our regular shelf price, not a special," he said. Herman said Shoppers was preparing an ad to respond to Giant's recent campaign.
On Friday, Safeway responded to Giant with a similar ad, comparing Safeway's own specials to Giant's prices to claim Safeway's prices were "22 percent lower" than Giant.
"We can do the exact same thing," said Safeway's Dowling.
Giant's Scher defended the company's ads, saying it was a campaign the company had used in the past. "We're doing it to show people we have a good story to tell," he said. "The ads are honest and tell people to compare and save."
The intensity of the advertising campaign illustrates the fierce battle for supermarket customers in the Washington metropolitan area, where food prices are higher than any other city in the continental United States.
A recent survey by newspaper food editors found that the cost of a typical market basket purchased in Washington was $58.78 -- nearly $7 higher than the national average of $51.86. Only in Honolulu and Anchorage, where transportation costs boost food prices, were the totals higher.
Over the past few years, Giant has been aggressively seeking a larger share of the market, launching price wars and extensively remodeling its stores.
Its efforts have been paying off, according to market-share surveys conducted annually by Food World, a Columbia, Md., trade publication that monitors the food industry here.
The latest survey, conducted last spring, shows Giant with more than 45 percent of the local supermarket business. Safeway was a distant second, ringing up nearly 32 cents of every dollar spent here in grocery stores -- about 2 cents per dollar less than a year earlier.
Food industry experts attribute some of Safeway's decline to the price war launched by Giant last fall -- even though Safeway promptly responded and also lowered its prices.
A Washington Post survey conducted after the price war was launched last year showed that Giant and Safeway had cut their prices by 12 to 14 percent on the 30 grocery products most frequently purchased in the area, ranging from Clorox Bleach to Philadelphia Cream Cheese to Banquet's Frozen Salisbury Steaks.
The products were on Food World's list of fastest-selling name-brand items in the Baltimore-Washington area.
The same survey was conducted last week at all but one of the same stores checked last October. (A new store was selected to compare prices at a Virginia Safeway store near a warehouse chain because the previous store had closed.)
Meat and produce items were not included in the Post survey because they were not part of Giant's initial warehouse campaign.
According to the Bureau of Labor Statistics, prices for these goods have increased the most since last September.
Between last September and the end of July (the latest figures available), supermarket prices for fruits and vegetables climbed 11.6 percent in the Washington area; prices for meat, poultry and fish climbed 5.7 percent.
Overall, however, grocery-store prices climbed by 4 percent here in the 10 months since September in spite of the price war, the BLS statistics reveal. Nationwide, food prices climbed 4.5 percent from July 1986 to July 1987.
These increases have been noticed by some area consumers. "It's more," said Ethel Henninger, putting her grocery bags into her car outside the Giant in Aspen Hill.
Henninger said she doesn't know exactly how much more she is spending on food, but "I just know I'm getting more money out of the bank for groceries."
"Produce has been out of sight," said Charles Harvey of Aspen Hill, standing in front of the Super Fresh across the street.
Harvey estimated that the rise in produce prices has increased his food bill 5 percent to 10 percent since last year.
Herman of Shoppers Food Warehouse said there is a simple reason why his chain's prices have increased: "Our prices are edging up because our costs are edging up. We're having some slight inflation now as manufacturers have increased their prices."
In the case of Shoppers, the latest price survey found that 52 percent of the 29 items surveyed (one item was unavailable for comparison at Shoppers) increased since the October survey, and 14 percent decreased.
The current price tag for the 29 items was $40.53, compared to $38.38 last October, a 5.6 percent increase.
From the survey, it appears that the biggest winners are consumers who have shopped at Giant and Safeway stores that did not face nearby competition from warehouse chains.
At those stores, current prices on the surveyed products were notably less than those charged before the price war. One reason is that these stores had among the highest prices in the area before the price war.
At Giant, the current bill for the 26 available items was $39.54, down 14 percent from the pre-price-war tally of $45.93. Similarly, the current bill at Safeway for 27 of the surveyed items was $42.17, down 10.2 percent from a year ago when the pre-price-war bill was $46.98.
Yet, compared to the October bill rung up after the price war began, both stores charged more last week. Giant's bill was marginally higher -- 0.6 percent -- while Safeway's climbed by 2.6 percent.
The survey also shows that consumers who shopped at Super Fresh and Magruder's have also seen prices for the popularly purchased items drop since last year.
At Magruder's, the bill for 24 of the surveyed items was $35.47 last week, down 5.9 percent from last October's bill of $37.70 and a 5.3 percent decrease from the September 1986 bill of $37.49
Similarly, at Super Fresh, where a new merchandising and low-price policy accompanied its name change last fall, prices last week were $43.16 for 27 available items -- a 5.7 percent drop from October's bill of $45.75.endqua