The Boston Globe and Wall Street Journal have revealing stories this morning about grocery pricing.
In the context of the management contretemps taking place at regional grocer Market Basket, which claims to give customers “more for your dollar,” the Globe decided to bring “the same 10-item shopping list to Market Basket, as well as Wegmans, Stop & Shop, Star Market, and Whole Foods Market, stores chosen because, like Market Basket, they offer a similarly wide selection of name-brand and store-brand items (sorry, Aldi and Trader Joe’s).” All of the grocers were in the same approximate geography.
The result: “Market Basket clinched the cheapest prices on five items — sourdough bread ($5.99), Greek yogurt ($5.99), shredded cheddar cheese ($1.97), bacon ($5.99), and orange juice ($3.59). On oat milk, Market Basket tied with Stop & Shop and the on-sale price at Star Market ($4.99), on bananas with Wegmans (49 cents a pound), and on eggs with Wegmans and Stop & Shop ($3.99). Wegmans triumphed on Honey Nut Cheerios ($3.79, 20 cents cheaper than Market Basket), while Stop & Shop prevailed on russet potatoes (99 cents a pound, compared to $1.29 for Market Basket’s ‘baking potatoes’).
“In all, the (pretax) bill at Market Basket came out to $38.28, eking out a victory against runner-up Wegmans, which totaled $40.01. Stop & Shop clocked in at $44.40 (in all fairness, its store-brand orange juice, $1.40 pricier than Market Basket’s, also contained 12 additional fluid ounces), followed by Star Market at $45.20. At an even $50, Whole Foods came in a distant fifth place.
“Put a different way: Someone who took this shopping list on their weekly grocery trip would save about $90 annually going to Market Basket over Wegmans, or more than $600 over Whole Foods.”
Meanwhile, the Journal reports that “in the five months since President Trump first announced sweeping tariffs, Amazon quietly raised prices on low-cost products such as deodorant, protein shakes and pet care items, a Wall Street Journal analysis of nearly 2,500 items found.” On average, the analysis shows, Amazon raised prices on these items by an average of five percent.
What’s even more notable: Walmart lowered prices on these same items by an average of two percent.
Some context from the Journal:
“Amazon said the products tracked by the Journal weren’t representative of the company’s prices overall. ‘We have not seen the average prices of products offered in our store change up or down appreciably,’ the company said in a statement. ‘Our commitment to offering low prices—not relative percentage changes—is what delivers the most value to our customers.’
“Manufacturers of several of the products that became more expensive on Amazon say they haven’t raised the prices they charge retailers. Even domestically made goods, such as the ‘Made in U.S.A’ Campbell’s soup, saw increases.
Imported goods and products with mixed origins – domestically assembled with imported components – faced even steeper hikes … The lowest-cost goods on Amazon saw one of their largest single-day increases on Feb. 15, two days after Trump signed an order suggesting tariffs would apply to most U.S. trading partners.
“Many of the products tracked by the Journal are ‘everyday essentials’ on Amazon—a category that represents one of every three units sold on Amazon in the U.S. during the first quarter of 2025, the company said.”
One expert pointed out that “Amazon struggles to turn a profit on these products because shipping costs erase the already-thin margins … Walmart can afford to lose money on similar online sales because customers often buy more profitable items in stores.”
KC’s View:
Okay. Let’s take these stories in order. But first, it is important to stipulate that price checks are a snapshot. There are a lot of influences in why an item costs a specific amount at this particular moment.
The Globe story isn’t really surprising – it would be more shocking if Market Basket weren’t the lowest priced of the retailers examined. Also no surprise that Whole Foods is the most expensive, and that both Ahold Delhaize-owned Stop & Shop and Albertsons-owned Star Market are caught in the muddy middle. After all, Market Basket is all about pricing, and Whole Foods positions itself as upscale/specialty – their pricing accurately reflects their value proposition. Stop & Shop and Star really don’t have strong images to the same extent.
It is the Wegmans piece that I find most interesting (though also not surprising). Wegmans has done a strong job of establishing its price/value proposition in center store, and would argue, persuasively, that while pricing may be higher on the perimeter, you are getting vastly greater value for your money when you shop its fresh food sections. And, Wegmans has been incredibly strong in communicating its narrative to shoppers – far better than either Stop & Shop or Star.
The Journal story about Amazon and Walmart’s seemingly divergent approaches to pricing is a little more complicated, I think, but indicative of the fact that Amazon is putting a higher priority on maintaining margins than keeping prices low.
Which certainly is its prerogative. And in line with CEO Andy Jassy’s approach to running the business.
Walmart, on the other hand, while its leadership warned that tariffs would result in higher prices, seems to have decided that at least in this moment, lowering prices – which reinforces its narrative and value proposition – is the more important play. I suspect that the Journal analysis may only reinforce its commitment to lowering prices as much as it can for as long as it can, especially if it highlights the perception that Amazon is doing the opposite.
One clarification here. It is early days for tariffs, and between retailers’ forward buying and what I think can fairly be called a seesaw approach to tariffs by the White House, their long-term implications for retailers is yet to be seen.
Also, it is important to contrast the different approaches to tariff threats taken by Amazon and Walmart. Amazon was credibly reported to have considered posting specific price increases that could be attributed to tariffs, and then backed down (and denied it had considered such a site-wide move) when attacked by the White House. And then, apparently, raised prices. Walmart, on the other hand, kept its head down, told investors that some prices might have to go up, and then, evidently, lowered prices.
The battle between these two behemoths is only going to continue, and pricing is only part of the conflict; I’ve always argued that Amazon is more of a convenience play than a price play. The Journal story vividly illustrates, though, at least one of the narratives that will play out. The question is whether Walmart is doing a better job not just of telling its story, but making sure that the underpinnings of its value proposition accurately and sustainably support it.
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