Survey: Supermarket Branches That Stand Alone Charge Vastly More

Consumer Council finds price disparities at different branches of a discount chain within the same city.

Ruti Levy
Ruti Levy
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Shufersal, Israel's largest supermarket chain.
Shufersal, Israel's largest supermarket chain.Credit: Reuters
Ruti Levy
Ruti Levy

Different branches of the same supermarket chain operating within the same city may be selling identical goods for vastly different prices, found a survey by the Israel Consumer Council on behalf of TheMarker. The variable is whether a given supermarket is near competing supermarkets.

For instance, TheMarker found that a list of 42 items cost 692 shekels at the Yenot Bitan branch on Petah Tikva’s Hayarkonim Street. That supermarket is within a 1-kilometer radius of branches of Mega You, Cost 365, Osher Ad and Super-Sol Deal Extra.

Yet a Yenot Bitan branch a mere 2 kilometers away, at Petah Tikva’s Savyonim Mall, charges 742 shekels for those exact same products. That supermarket is not quite as close to competitors.

Even though many shoppers drive to the supermarkets surveyed, it turns out that close physical competition is a critical factor in price – even among stores of a given chain that are being branded at the same price point. Supermarkets tend to closely track the prices at competitors next door. Stores are often clustered in industrial zones, where you can generally find a store’s less expensive format.

The chains’ PR teams have indicated that prices at similarly branded stores may not be equal in their responses to price surveys, scolding journalists for making “misleading” comparisons when they examine stores with different levels of local competition – even if all the stores are branded as discount chains.

The most recent survey found that even ostensibly identical stores only five minutes apart may have vastly different prices. Since consumers generally have to drive to the grocery chains’ discount stores, they could be considered in competition with one another. But consumers apparently aren’t aware of the extent of the price gaps, said Consumer Council head Ehud Peleg.

A Consumer Council team visited several branches of You, Yenot Bitan, Super-Sol Deal and Hetzi Hinam on September 11, checking the prices of 42 identical products at each store. Some of the stores were next to other supermarkets, while others were slightly farther away from competitors. The survey did not include Rami Levi because that chain does not have any stores that aren’t in close proximity to other grocery stores.

The check found price differences of tens of percentage points between identically branded stores, depending on how close those stores were to competition.

Of the stores checked, branches of You situated close to competitors were found to be cheapest.

For instance, 500 grams of Bracha raw tehina cost 10 shekels ($2.76) at a You branch at a Petah Tikva shopping complex, but 18.90 shekels at a You branch in Rishon Letzion that was farther from competition. A 1-kilogram tub of Tzabar Hummus cost 10 shekels at the Super-Sol Deal at Modi’in’s Yishpro Center, a spot considered competitive. Ten minutes away, though, at the Super-Sol Deal at Modi’in Center, it cost 13.90 shekels.

A six-pack of Heineken beer cost 42.90 shekels at a Hetzi Hinam in a competitive location in Holon, but 54.90 shekels at a branch in Hod Hasharon. And at Yenot Bitan’s competitive store in Petah Tikva, chicken wings sell for 19.90 shekels a kilo, versus 30 shekels a kilo at the branch at Savyonim Mall in the same city.

On average, customers pay 7% extra by shopping at a store farther from competition, compared to branches of that same store located closer to competitors.

“As consumers, we’d expect that managers at Super-Sol, for instance, the moment they brand the stores in Yishpro Center and Modi’in Center with the same name, Super-Sol Deal, would have identical prices at these stores, particularly when they’re in the same city. At Castro, you won’t find the same shirt priced differently at the branches at Tel Aviv’s Dizengoff Center and Azrieli Mall, and likewise for branches in Haifa and Netivot. So why is this the case with supermarket chains?” asked Tamir Ben Shahar, CEO at consulting company Czamanski & Ben Shahar.

Super-Sol stated in response that there may be a few price differences among the 40 products checked, but that two examples cited by TheMarker were cases of isolated errors at the stores.

Mega stated in response that You was indeed the cheapest store around, as TheMarker had found, and that individual stores had different sales.

Yenot Bitan declined to respond. A response was not available from Hetzi Hinam by press time.

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