In the Food Section chart Wednesday listing grocery costs for U. S. cities, Seattle should have been listed as the second-least- expensive city, ahead of San Diego and Pittsburg. Prices for a half- gallon of milk rather than a gallon were erroneously reported for the latter two cities and their market-basket totals should have been higher. (Published 6/26/87)

Despite the price war launched by area supermarkets last September, Washington has higher food prices than any other major city in the continental United States, according to an annual survey conducted by newspaper food editors.

The survey 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 totals higher than in the District. The poll reflects costs within cities only, not the outlying suburban areas.

Tampa Tribune food editor Ann McDuffie, who has organized the survey for the past 20 years, said that the District has consistently ranked among the nation's most expensive cities in which to buy food.

Last year, for the first time in the poll's history, prices in Washington were higher than in both Anchorage and Fairbanks. Washington's market basket totaled nearly $10 more than the national average.

While the gap between Washington and the national average has narrowed this year, the difference only dropped the District one notch, to number three in the nation -- a position it has held in previous years. Thus, Giant's "warehouse" pricing and Safeway's "discount" campaign -- in which both chains slashed their prices 5 to 25 percent on more than 2,000 items -- appears not to have had much impact on Washington's national status.

Barry Scher, spokesman for Giant, said that "prices have gone down" since the warehouse price war began, and "just to pick 36 items is not valid at all" when a typical supermarket contains between 18,000 and 20,000 products.

Part of the explanation why Washington didn't drop lower in the survey may be that the food editors' market basket of 36 items included meats and produce, goods that have not been subject to the chains' price-slashing campaigns.

According to the Bureau of Labor Statistics, prices of produce rose 2.6 percent in the Washington metropolitan area between September 1986 and April 1987. The area's prices for meats, poultry and fish increased 3.8 percent in that time period.

Observers have pointed repeatedly to several interrelated reasons for Washington's high food prices.

Although retailers are hard pressed to admit it, one factor cited is the city's high per-capita income. People with more money spend more money on groceries, and retailers can get what the market will bear.

Retailers also appeal to this market by selling more high-ticket items. "There's no doubt that consumers as a whole are purchasing more upscale items and those items will retail for more," said Jeff Metzgar, publisher of Food World, a publication that monitors the area's supermarket industry.

Another factor cited is the area's lack of competition. Two chains -- Giant and Safeway -- dominate Washington with 77.31 percent of the market, according to Food World. This results in "very, very few constant flurries of price battles," said Metzgar, adding that such battles are common between supermarkets in regions such as New England, where there are 15 or 16 competitors.

Retailers have also pointed to this area's heavily unionized base (approximately 97 percent of food retailing workers here belong to unions) and high real estate fees, taxes and utilities.

"General operating costs are factors that must be considered within this market," said Giant's Scher. "Costs here, such as homes, are clearly higher than in other cities in the U.S."

Mike Rourke, spokesman for Superfresh, said that for retailers "all costs" are higher in inner cities. Rourke said that supermarkets actually make more money in suburban stores, where consumer prices are lower. Volume in those stores is higher and operating costs are lower, he said.

On June 4, food editors and writers from 17 U.S. cities priced the same 36 items at three leading supermarket chains; a Giant, Safeway and Superfresh in Northwest Washington were used for the District's section of the survey. The lowest price for each item was then used to represent the city's cost for that grocery.

The District had the highest prices out of all the 17 cities in four items -- a pound of margarine, an 8-ounce jar of instant coffee, a head of iceberg lettuce and a can of Campbell's tomato soup. It did not have any of the least expensive items.

The District's market basket totaled $14.14 more than Tampa's (the lowest) and $7.05 less than Honolulu's (the highest). It was $9.12 more than New York City's.

Nationally, instant coffee showed the greatest drop compared to last year's survey, decreasing 28 percent. Pork chops, tomatoes and peanut butter showed the largest national price increases since last year.