By Daily Mail (U.S.) | Created at 2024-10-05 19:44:52 | Updated at 2024-10-05 22:44:53
3 hours ago
A popular east coast grocery chain is under fire over allegations its prices are cheaper in more affluent neighborhoods.
Stop & Shop, which has more than 400 stores in New York, New England and New Jersey, is facing claims over pricing differences at its Boston locations.
Last year, youth organizers in the city published an investigation which showed that the grocery chain was charging over 20 percent more for some groceries in the working class Jamaica Plain neighborhood compared to Dedham, a more affluent suburb of the city.
For example, the report found a store brand frozen pepperoni pizza cost $6.99 in Jamaica Plain, and just $5.29 in Dedham - a 24.3 percent difference.
Now Senator Elizabeth Warren has piled pressure on the grocery giant, demanding it shed light on the reasons for these price discrepancies, the Boston Globe reported.
In a letter to the CEO of Stop & Shop's parent company, the Massachusetts Senator said it should not be 'engaging in corporate profiteering schemes that squeeze residents and families.'
Stop & Shop, which has more than 400 stores in New York, New England and New Jersey , is facing claims over pricing differences at its Boston locations
The four-page letter to Frans Muller, CEO of Ahold Delhaize, demanded the company provide information on Stop & Shop's pricing algorithms and decision-making processes across store locations.
It referenced the investigation, which was carried out in June 2023 by a group of Boston youth workers at the Hyde Square Task Force.
The Task Force bought nearly identical grocery items at Stop & Shop locations in the Jamaica Plain neighborhood and the affluent suburb of Dedham.
‘They found that the cost of several staple items was higher at the Jamaica Plain location: for example, a box of Bubba’s turkey burgers was $11.49, compared to $9.49 in Dedham,’ the letter read.
‘Stop & Shop-branded crinkle-cut French fries were 90 cents more in Jamaica Plain, and Smithfield bacon was two dollars more.’
In total, the youth volunteers found that the same grocery cart of items cost $34 - or 18 percent - more in the largely minority and working-class area than in suburban Dedham.
If a household spends $300 a week on groceries, it would be spending $2,808 per year more at the Jamaica Plain store than at the Dedham one, the report found.
‘These types of price discrepancies place significant burdens on already-struggling consumers,’ Warren wrote, pointing out that the median household income in Jamaica Plain is $35,900 per year.
Stop & Shop confirmed to the Boston Globe that it had received the letter, and it plans to respond in the coming weeks.
'Under no circumstances does Stop & Shop consider a store neighborhood’s socioeconomic makeup when setting prices,' a company spokesperson said.
The grocery chain said various factors including rent prices, size of stores and labor costs could impact pricing location to location.
The Dedham location, for example, has similar prices to stores in Hyde Park and Roslindale 'in part due to having tenants at these locations that offset operating costs,' the company told the outlet.
It added that it is undergoing a 'multi-year strategy to invest in pricing and lower everyday prices across all its stores.'
The Boston Globe visited four stores in Greater Boston late last month to see whether the price discrepancies highlighted by the report still exist.
It compared the prices of 15 items at the Dedham and Jamaica Plain stores, as well as locations in Grove Hall and Hingham.
Youth organizers found the grocery chain was charging almost 20 percent more for groceries at a store in the working class Jamaica Plain neighborhood (pictured) compared to Dedham, a more affluent suburb of the city
Senator Warren said the company should not be 'engaging in corporate profiteering schemes that squeeze residents and families'
Senator Elizabeth Warren has piled pressure on the grocery giant, demanding it shed light on the reasons for these price discrepancies
The outlet found the Dedham store had the lowest prices of the four locations for 12 of the 15 items.
It comes as grocery store prices are among the top issues for Americans going into the presidential election.
Vice President Kamala Harris has laid out plans to introduce a federal ban on price gouging across the food industry if she wins.
Price gouging is when retailers sharply increase the price of necessities, typically to take advantage of an adverse situation such as the Covid-19 pandemic.
Kroger, America's biggest supermarket chain, is also being investigated over its use of electronic price labels on store shelves nationwide.
Senator Warren and Pennsylvania Senator Bob Casey announced earlier this year that they were looking into the practice to see if the chain was engaging in surge pricing.
Meanwhile, earlier this year, Stop & Shop abruptly shuts 32 'underperforming' stores.
The chain said it will close 10 stores in New Jersey, eight stores in Massachusetts, seven stores in New York, five stores in Connecticut and two stores in Rhode Island.
