Affordability: Shopping at and Living Near Grocery Stores

I consider myself a savvy shopper. I check prices online and in-store and tend to avoid expensive places unless I need a few things I would have to drive to get elsewhere.

The year is 2019, and we don’t have to be tied to our neighborhood geography when choosing where to buy groceries. With services like Instacart, Target’s new Shipt, and Amazon Prime Now, we can now have groceries from area grocery stores that may have been out of reach for delivery fees around $4 to $6, plus tip. Always tip well, and tip your driver in cash.

With this world of new options, I set out to expand my shopping horizons. I chose a basket of goods (from price index economics speak), and compared prices at nine stores in the Minneapolis area. Seven stores (Aldi, Costco, Cub Foods, Fresh Thyme, Lunds & Byerlys, Wedge Co-op, and Whole Foods) were priced on Instacart, and two stores (Target and Trader Joe’s) were priced in-person because they were not on Instacart.

The locations for the in-store prices were the Target in the Quarry (1650 New Brighton Blvd) and the Trader Joe’s in Downtown East (721 S Washington Ave). All prices were from April 1, 2019 and do include some sale prices. This was before Amazon will lower some prices at Whole Foods, which is slated for Wednesday, April 3.

In my research, I noticed that prices sometimes varied between online and in-store. For example, Target’s Market Pantry™ Skim Milk was priced at $1.99 online, but in-store it was priced at $1.75. More research would be needed to price items both online and in-store.

When I was growing up, we bought apples by the pound, adding to plastic film bags and tying with wire twist ties. Now apples are mostly packaged in bags with a set weight. Some stores do not have scales, such as Trader Joe’s. It can be confusing for the shopper when some large-sized apples are priced per each and small apples are priced per bag of three pounds or so.

I looked at prices per pound. For three stores, this meant that I had to stick with a three-pound bag, but Cub and others have regular prices per pound. I often found the cheapest variety of apples was the humble Red Delicious, but some stores didn’t offer that variety, and for those I include the cheapest price available.

Aldi comes out the winner, where you can pick up a three-pound bag of Red Delicious for $1.06 per pound. Cub, Lunds & Byerlys, and Whole Foods tied for the most expensive apples, at $1.99 per pound for Red Delicious.

Navel Oranges was an unexpectedly different ranking than apples. Fresh Thyme appears to have a firesale on them because you can pick up a four-pound bag for $0.75 a pound. Compared to Wedge Co-op, where the price is $2.39 a pound, more than three times the price.

Chicken breast can be dicey for finding comparable items. Most chicken is raised without antibiotics, but there can be vegetarian-fed, free range, animal welfare-rated, and other differentiators. For this index, I went with the lowest price the store offered for chicken breast.

Aldi again had the lowest price, with their five-pound package priced at $1.89 a pound. Wedge Co-op was the most, where Kadejan Boneless & Skinless Chicken Breast was a whopping $7.99 a pound. I looked up the company, and it appears there is nothing special about the chicken. It’s antibiotic-free, all-natural, “air chilled” meat from chickens raised in a feedlot.

For skim milk, I was very surprised by Fresh Thyme. They only offer a half gallon of skim milk from “certified pasture grazed cows”, which increased the price to $3.99 for a half gallon, $7.98 per gallon. If you are a shopper at Fresh Thyme, I would be interested in your comments on milk. Do they offer different options in-store versus what is available on Instacart?

One of the in-store prices I found was for Target’s skim milk. A very basic gallon runs at $1.75 in-store, but a nearly-identical gallon online runs for $1.99. I wonder if online prices are attempting to recoup the losses on the low delivery fees for ordering. What is your experience?

Finally, we have the all-American dozen eggs. Target has the lowest price on eggs, at $1.49 for a dozen extra large eggs. Aldi is just $0.10 more, while the Wedge Co-op is tops out at $4.99 for conventional eggs that are not organic.

Indexing the Index

I had all my data in a spreadsheet, so I set about creating a simple equally-weighted average of prices. I first weighted each price by that category’s lowest option, then added and normalized to a scale of 100 for the lowest price. You can see this in the formula in the Index column on the All Data sheet.

And without further ado, the final results:

Store	Index
Aldi	116
Target	141
Costco	142
Trader Joe’s	143
Cub Foods	153
Lunds & Byerlys	186
Fresh Thyme	197
Whole Foods	216
Wedge Co-op	297

Aldi came in as the lowest-cost store, with prices on average only 16% more than the lowest price. Whole Foods came in as the second-highest price, with the average item more than double in cost as its lowest-price competitor, but the high-cost crown goes to the Wedge Co-op.

Of course this is a very basic index with an arbitrary basket of goods. But it provides a starting place for you to think about your own shopping habits and where you could save on your basket of goods.

If you are so inclined, check your last big grocery receipt. Make a list of easily comparable items like the ones we used and make your own spreadsheet comparing prices on Instacart, Amazon Prime, or in-person in-store. If you want to weight to create an index of your basket, I would recommend weighting by how much you spent in each category on your last receipt. If you bought 20 pounds of oranges and 1 pounds of apples, you will likely want the index weighted more towards oranges.

Living near the grocery store

One critical issue for many renters is the cost of living near a grocery store. Food deserts like North Minneapolis make it difficult to buy affordable food without a personal vehicle.

To study the relationship between apartment rents and grocery store locations, I collected data for 36 grocery stores in or just near Minneapolis or St. Paul. The store brands were the same as those I researched for price data, and the apartment rent averages were from Rentometer.com, with searches set at 1-bedroom apartments within 2.00 miles of the grocery store street address. You can access all the data here.

From the average rent for a 1-bedroom within 2.00 miles, I averaged the average rent across locations of a store brand to give an average for that store brand. When we compare this data to the price index data collected earlier, there is a weak regression between the two sets of data.

Store Brand	Rentometer Average Rent	Cost Index
Aldi	$967	116
Costco	$1,117	142
Cub Foods	$1,069	153
Fresh Thyme	$1,136	197
Lunds & Byerlys	$1,275	186
Trader Joe’s	$1,229	141
Target	$1,081	143
Wedge Co-op	$1,237	297
Whole Foods	$1,168	216

This is of course a chicken-and-egg problem, where grocery brand locate where they can capture more of the market for their wares, but also rents increase near popular shopping.

The bottom line: if you both are looking to save on groceries and save on rent, locating near an Aldi is a good proposition. If you have a personal vehicle, you can commute from a low-rent area to a Costco or a Trader Joe’s.

If you are inclined to spend the most on groceries and rent, then you could move to 2015 Lyndale Ave S, where the average rent for a 1-bedroom is $1412, and you are within a short walk to the Wedge Co-op.

Where do you shop for groceries? What’s the best local deal that you have seen recently? What do you pay for rent near your grocery store? Share your finds in the comments!