Where Whole Foods Counts as a Cheap Grocery Store

A blog about business and economics.
Sept. 3 2014 4:32 PM

Where Whole Foods Counts as a Cheap Grocery Store

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Whole Foods, where Manhattan bargain hunters should shop.

Photo by Justin Sullivan/Getty Images

I’m not sure whether this says more about Whole Foods or more about life in Manhattan, but today Bloomberg reports that the organic grocer is one of the borough’s cheaper places to shop for food. Bloomberg Intelligence did a bit of comparison shopping with a basket of 97 items, which cost a grand total of $391.39 at Whole Foods. At Fresh Direct, a service that delivers groceries to your door, the bill ran to $398.44 while at Gristedes (a popular local chain) it came to $458.84 (grocers D’Agostino and Food Emporium were also pricier while Fairway was less expensive).

Whole Foods has supposedly been cutting its prices to fend off cheaper competition in the organic grocery business (among others, Walmart has been stepping on its turf), so this might be a sign that its efforts are paying off. Alternatively, it could be proof that Manhattan is an economic bizarro world where a store that turned the purchase of kale into a major financial commitment seems like a bargain.

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My guess is that there might be a slightly different issue at play here. Websites like Kiplinger’s and Cheapism (which looked at Seattle grocery stores) have found that Whole Foods has bargains on items ranging from organic quinoa to organic frozen vegetables. And that makes some sense, since there's no reason to expect that a store like Safeway, for instance, would have much of a price advantage on the sorts of traditionally expensive organic products that Whole Foods specializes in. (Walmart, with its massive purchasing power, is a different story.) So in an organic apples to organic apples comparison, the chain shouldn't look too bad. And in a place like Manhattan, where a lot of customers are somewhat price insensitive, it might even offer the same high-end products at a lower cost, since local competitors know their customers aren't on a tight budget. It's when you compare the cost of a factory farm chicken at your neighborhood grocer to a hormone-and-whatever-else-free chicken at Whole Foods that the price difference usually becomes apparent.

That said, it'd be nice if Bloomberg re-ran this experiment in Brooklyn.

Jordan Weissmann is Slate's senior business and economics correspondent.

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