One of my favorite supermarkets is Dominick’s here in Chicago. Like many people I assume that price I pay for a gallon of milk in one Dominick’s supermarket is the same price I would pay for a gallon of milk in any other Dominick’s grocery store.

Well I was wrong. It seems that supermarket chains frequently charge one price for an item in one geographical location and another price for the same item in a different location.  Prices between a chain’s stores in the same metropolitan area can vary by as much as 12%.  For a family that spends $125 a week on groceries this can amount to a difference of nearly $780 a year!  russian grocery store

Many theories have been suggested to explain this price discrepancy. Rents in one part of the city may be more expensive causing food prices to rise in order to cover the extra cost. Competition from ethnic grocers or deep discounters like Walmart may place downward pressure on prices in one are of the city relative to another.  Perhaps, supermarkets use data from shopper loyalty cards to determine how much shoppers in certain parts of the city are willing to pay. In essence, they could simply be charging what the market will bear.

Yet, its not just supermarkets that charge different prices in different locations. Drugstores like Walgreens frequently charge different prices for the same items depending on where the store is located. Even fast food restaurants like McDonalds charge different prices in different locations.

Smart consumers are adapting their shopping behavior as a result. Some shoppers, for example, who notice lower prices in a supermarket chain’s urban grocery stores will take care of their grocery shopping after work before making their way to their suburban homes. Others will skip over the nearest grocery store to shop a little farther away at a store with lower prices.

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