A national market basket survey conducted early this month placed Washington supermarket food prices at the top of 17 cities in the continental United States. Prices were higher only in Anchorage, Alaska, and Honolulu, Hawaii.
The price of the 34-item market basket in Washington was $34.93. This was 9.2 per cent over the national average and 7.8 per cent higher than the price of the same items one year ago.
Food editors in each city shopped in three chain stores on June 2. The lowest price they found for an item in each category was used to compile their marketbasket. Editors in five Canadian cities conducted a simultaneous survey. The cost of the market basket was higher than Washington's in every Canadian city.
Washington led the American survey with its price for canned tuna fish (17 cents above the average) and was highest in the continental United States for instant coffee (a whopping 91 cents above the average), evaporated milk, canned peaches and canned pineapples. The suger price, $1.15 for five pounds of granulated white, was equalled only in Portland, Ore., and Denver, Colo.
Anchorage, participating in the survey for the first time, was not factored into the averages. Market baskets were not compiled in two cities that participated last year, Philadelphia and Detroit.
On a national basis, the market basket reflected the effect of the cold winter on fruit and vegetable supplies and improved supplies of meat and poultry. Prices were down from 1976 for eggs, flour, sugar, beans, rice, rump roast, ground beef, pork chops, wieners and chicken. The items that had increased most sharply in price were: instant coffee (up 52.9 per cent), mayonnaise (up 20 per cent), ice-cream (up 20.2 per cent), frozen orange juice (up 20 per cent), frozen broccoli (up 23.6 per cent), carrots (up 47.3 per cent) cabbage (up 23 per cent), lettuce (up 26.5 per cent) and oranges (up 16.7 per cent).
Washington was below the average for eight items: cheese, bread, cereal, beans, ham, cabbage, bananas and tomatoes. The ham price, 69 cents for one pound of smoked butt end, was the lowest in the survey, 35 cents less than the average.
On the other hand, District prices were significantly above the average for 10 items in addition to tuna fish and coffee. Among them: mayonnaise (89 cents above the average), rump roast, pork chops and wieners (all more than 20 cents above the average), all oranges (20 cents above).
Last year orange and orange juice prices here, as well as ham, were well below the average.
Boston, another city in the "North-east Corridor," where operating costs for supermarkets are traditionally high, had a market basket valued at $34.04, trailing Washington by 89 cents. But New York City, with a $32.85 market basket, was well down the list.
Industry experts cite numerous factors that result in the high price of food here, including labor costs, distance from centers of production of meat, fruits and vegetables, local demand for high quality and service. They also point out defects in this and other market baskets: The 34 items are only a minute sampling of the 10,000 or more items stocked by large supermarkets. The survey is done only on a single day, is subject to error and is not weighted. (For example, a 10-ounce jar of instant coffee will last a family some time; one pound of steak will disappear during a single meal.)
Paul Forbes, assistant to the president of Giant Food, said the consumer should realize supermarket pricing is not similar to automobile pricing. "There is not a fixed wholesale and a fixed markup," he said. "It all depends on the ever-changing merchandise mix and you can determine that only by looking at the total market basket."
But the food editors' market basket is a snapshot of food prices and Washington has consistently been near the top. Other studies, more thorough and more extensive, tend to support this finding.
One charge raised consistently by consumerists is that food prices are high in Washington because it is a concentrated market, with more than 60 per cent of sales divided between only two chains, Safeway and Giant. The chains refute this, contending there is considerable competition.
According to Bruce Marion, a University of Wisconsin professor who helped prepare a study on prices and profits in the supermarket industry for the Joint Economic Committee of the Congress, "there is pretty strong evidence" that lack of competition "tends to lead to high prices.
"When a market is dominated by two chains, as is the case in Washington, two things happen. The firms tend to shy away from head-on price competition and move toward non-price competitive factors (such as advertising and games) and prices go up enough to result in increased profits."
Marion discounted transportation and rent or building costs as not significant enough to explain price differences in a market such as Washington. Labor, he said, is a "real biggie," but Washington labor costs are not the industry's highest, he said. He cited "softer competition" as a potential cause of looser cost controls and internal inefficiency."
The Joint Economic Committee study said of City B, since identified as Washington: "little, if any, price competition existed between these two (dominant) firms." The result, the study concluded, was that consumers here paid an additional 6.9 per cent for groceries in 1974.
Even if the market basket is small, the survey findings have been consistent. But for explanations, the industry and its critics will have to look elsewhere.