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Tops Supermarket Chains : Survey Finds Lucky's Prices Lowest in L.A.

September 22, 1987|MARTHA GROVES | Times Staff Writer

Lucky Stores, which trumpets itself as "still the low-price leader," got some independent backing for its bragging Monday as a consumer group released a survey showing that the chain had the lowest overall prices among eight Los Angeles-area chains.

Boys Markets, a 55-store chain that operates primarily in ethnic urban neighborhoods largely abandoned by competitors, emerged with the highest prices on 134 commonly purchased items in the July 11 survey, coming out 6.65% higher than Lucky's. In other words, goods costing $100 at Lucky would sell for $106.65 at Boys.

The survey, the second conducted in Los Angeles by the California Public Interest Research Group, also showed Boys to have the highest price differences among its own stores. Among four locations surveyed, the store in Watts, a low-income ethnic area, had prices 7.17% higher than a San Fernando Valley location in a middle-income area.

Shoppers the Winners

Nancy Rader, consumer program director of CalPIRG, said the survey indicated that the already feverish competition among Southland chains has heated up, to the benefit of food shoppers. In a survey nine months earlier, Safeway Stores came in last, with prices 10% higher than low-price leader Lucky's.

In this follow-up survey, Alpha Beta moved to second from fifth place, with goods costing $102.27. It was followed by Albertson's, at $102.94; Ralphs, $103.67; Vons, $105.10; Hughes, $105.47; Safeway Stores, $106.42, and Boys.

CalPIRG, a nonprofit, nonpartisan group founded in 1972, dispatched 48 staff members to 24 stores to survey the prices of 134 commonly purchased items. The study, released at the organization's West Los Angeles headquarters, did not take into account such factors as quality or policies of offering unlimited double coupons, which clearly can drastically slash a customer's food bill.

Rader said she was inclined to give CalPIRG some credit for the stepped-up price rivalry.

"I do know that the grocery stores take our surveys very, very seriously," she said. About a year ago, she noted, an Alpha Beta representative told her that the chain's stores in San Diego, where CalPIRG has conducted such studies for 11 years, "were empty for three weeks" after a survey showing Alpha Beta prices to be on the high side.

The price competition "is excellent news for the consumer," said Jonathan H. Ziegler, a supermarket analyst with the San Francisco-based brokerage of Sutro & Co.

For Lucky, based in the Northern California town of Dublin, the survey "reconfirms that our policy is working." In recent weeks, the chain has been blitzing the public with television and multipage newspaper advertising recounting an independent study showing its prices to be the lowest in town.

Some Voice Criticism

To be sure, chains that did not fare so well in the latest survey were quick to take exception to various aspects of it.

Al Marasca, executive vice president for marketing at Ralphs Grocery, said: "We're very disappointed that the Giant wasn't included. We would welcome the opportunity to be compared against Lucky."

The Compton-based chain, which slipped to fourth place from second, opened its first Giant warehouse stores about a year ago and now operates 14 of the high-volume locations. Rader of CalPIRG said the group chose not to include the Giant stores because "if we surveyed Giant, we would have to survey other small chains."

However, Ken Johnson, an independent supermarket consultant, said the Giant chain is actually larger in terms of market share than some of the other chains surveyed, such as Albertson's and Boys. "It is clearly the closest competitor (of Lucky) in terms of price, and is probably roughly neck and neck with Lucky," he said.

Despite the price differential among Boys' own stores, Rader applauded the company for its presence in such urban areas as Watts, which other chains have scorned because of problems with security and vandalism.

"It took an incredible effort to get Boys to move in, and everybody was very happy that they moved into that location," she said. "You have to give them credit for being there at all, but it is significant that prices are so much higher (in Watts) than at the Boys in San Fernando."

She indicated that the presence of a large competitor might pressure Boys to lower prices at the store, which was built in a hard-won redevelopment center at 103rd Street and Compton Avenue.

Price Differentials

Boys President and Chief Executive Peter J. Sodini defended the chain's pricing in Watts. "When we opened the store, there was a major competitor--Ralphs--but they closed, presumably because they could not contend with the problems of the neighborhood.

"It's almost like which comes first: If the operating costs were lower in those areas, then clearly . . . we would have more competition. But the realities are that chains have pulled out because they are high-cost areas."

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