A DAY in June, 1979: Prices in District supermarkets are the highest out of 21 cities in the continental United States. Same place, another day, June 1980: Prices in Washington are lower than the year before, dropping the city to 11th-cheapest. Food shopping on that day is more expensive in 10 other U.S. cities. Another dramatic drop, June 11, 1981: Higher only than Tampa, Fla., District food prices dip to the secondlowest out of the 21 cities surveyed.
And now, on June 3, 1982, the Tampa Tribune food editor's annual market-basket price survey concludes that Washington's prices have returned to No. 11. The 35-item market basket totaled $44.39, or 1.2 percent below the national average. Supermarket prices here have been an up-and-down business.
According to past food editors' surveys (the survey has been conducted annually since 1969), Washington's prices had been the highest or second-highest for five years preceeding 1979. At the time, supermarket executives denied charges that lack of competition in the Washington supermarket scene was the reason and pointed to the general high cost of living here instead. In 1980, Magruder's replaced Grand Union on the survey and contributed 11 of the survey's lowest item prices, bringing Washington's rating down to 11. But, said Safeway spokesman Ernie Moore of the drop, "I don't think the addition of Magruder's had that much effect."
And then Washington prices plummeted so that on June 11, 1981, this was the secondcheapest grocery-buying city in the country. At the time of the survey, a local warehouse-pricing price war was on. "Last year Washington was the most comptetitive area in the country," said Safeway's Moore. This year on June 3, Washington's show as number 11 Moore saw as a return to a "fairly normal position." Giant's Sue Portney agreed. "Eleven out of 21 . . . we're still maintaining an equitable pricing system," she said.
Ann McDuffie, editor of the Tama Tribune and organizer of the survey, said price wars contributed to the most surprising of this year's results. Tampa, which has consistently placed with the lowest prices in the nation, this year placed fourth cheapest-a position that McDuffie attributes not to rising prices in Tampa, but to lower prices in San Diego, Philadelphia and Boston (the number one, two and three cities). Supermarket executives in those cities told McDuffie price wars had led to lowered prices.
The market basket is compiled by surveying on one day-this year June 3 -- the three area supermarkets with the greatest volume sales in each city. In Washington's case, the markets were Giant, Safeway and Magruder's. In establishing the rankings, thhe lowest price for each item-sales and specials included -- is chosen to represent that city's price for each market basket item.
Magruder's continues to lower the District's average. If the market basket had been compiled using only each store's totals rather than just the lowest price among the three, the figures would look like this: Magruder's: $47.53, Giant: $49.67 (using pork loin butterly, not tenderloin) and Safeway: $49.69 (price adjusted for the 12-ounce box of Special K, which Safeway does not carry). If the survey this year had included only Giant and Safeway, the market basket total would have increased to $48.02, putting Washington in 16th place, with five of the 21 cities more expensive.
Magruder's had the lowest prices in 12 out of the 35 items (consistently low in produce items, consistently higher in brand-name packaged goods like rice, tuna, peanut butter and coffee). According to Ken Dodson, assistant manager at Magruder's Connecticut Ave. store, one of the reasons the market is able to hold down costs is that is labor costs are lower than other markets. Magruder's is non-union. "That makes a difference," he said. In addition, Dodson explained, Magruder's skips the middlemen. "We buy direct," he said, adding that they purchase produce straight from a market in Baltimore and also buy direct from manufacturers whenever possible.
"We do a combination of both," said Giant spokesman Barry Scher, explaining that Giant buys produce from brokerage firms as well as directly from farmers. But, Scher said, "it's more efficient" for Giant to deal with large brokerage firms because the high demands from its 130 stores are better accommodated by them. Scher also said, "the amount of overhead is much higher for a corporation like Giant than independents like Magruder's."
Giant had eight of the market basket's lowest prices, Safeway five. And between Giant and Safeway, 13 of the market basket items were priced identically. Only two items -- oranges and evaporated milk-were the same price at all three markets.
Nationwide, cabbage showed the highest price increase from last year; according to the survey, the average price of cabbage for the 21 cities was 44 cents a pound, as opposed to 19 cents a pound in 1981. Other prices that rose nationally this year from last were iceberg lettuce, bacon, pork loin chops, ham and chicken. Increases in pork products, according to USDA economist Ralph Parlett, are attributable to a "planned production cutback" on thhepart of pork producers.
Nationally, purchasers of peanut butter paid less on this June survey than last. Peanut prices skyrocketed in 1981 due to the hard draught. The average national price of peanut butter decreased more than any other product in the Tribune's survey, from a 1981 average of $2.20 per 18-ounce jar to $1.70. Other prices that significantly decreased were potatoes, margarine and eggs.
The price-product picture inn the District looks a little different from the national one. Peanut butter buyers here paid more than in any other city in thh continental U.S. -- $1.99. Washington ranked below average in meat prices (except for sirloin steak) and produce, including cabbage. Other foods here priced considerably below the national average were milk, cheese, margarine and bread. District prices were above average for sugar, flour, ice cream, evaporated milk and canned cling peaches.
Traditionally, food in Washington supermarkets has been priced higher than in other Northeast cities like Philadelphia and New York, a factor Moore credits to Washington's higher labor costs. According to Moore, labor costs run 15 to 16 cents per dollar. "Washington has hiistorically been higher because of the higher costs of labor, utilties, transportation and insurance," said Giant's Sue Portney.
In addition, Portney said Giant has always maintained that price surveys are "not fair." Quality differs among produce, meat and services, said Portney, plus Giant carries some 20,000 items, and the market basket total would only be accurate "for someone who buys those exact items." And Safeway's Moore questions the validity of the Tampa Tribune's market basket survey altogether; it is a problem, according to Moore and USDA's Parlett, that the survey reflects national prices only on one day. "It doesn't give you a true picture of price levels," said Parlett. Instead, Parlett suggested, prices should have been monitored monthly.