A popular East Coast supermarket chain is under fire over allegations that 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 price discrepancies at its Boston locations.
Last year, youth organizers in the city published a study showing that the supermarket chain charged more than 20 percent more for some groceries in the working-class Jamaica Plain neighborhood compared to Dedham, an affluent suburb of the city.
For example, the report found that a store-brand frozen pepperoni pizza cost $6.99 in Jamaica Plain, and just $5.29 in Dedham – a 24.3 percent difference.
Now that Senator Elizabeth Warren has put pressure on the supermarket giant, demanding it shed light on the reasons for these price discrepancies, Boston sphere reported.
In a letter to the CEO of Stop & Shop’s parent company, the Massachusetts senator said it “should not be involved in corporate profiteering schemes that put pressure on residents and families.”
Stop & Shop, which has more than 400 stores in New York, New England and New Jersey, is facing claims over price discrepancies at its Boston locations
The four pages letter Frans Muller, CEO of Ahold Delhaize, demanded that the company provide information about Stop & Shop’s pricing algorithms and decision-making processes at various store locations.
It referred to the survey, which was conducted in June 2023 by a group of Boston youth workers from the Hyde Square Task Force.
The Task Force purchased nearly identical groceries at Stop & Shop locations in the Jamaica Plain neighborhood and the affluent suburb of Dedham.
“They found that the cost of several basic items was higher at the Jamaica Plain location: for example, a box of Bubba’s turkey burgers cost $11.49, compared to $9.49 in Dedham,” the letter said.
“Stop & Shop brand crinkle-cut 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 worth of items cost $34 (or 18 percent) more in the largely minority and working-class neighborhood than in suburban Dedham.
If a household spent $300 a week on groceries, it would spend $2,808 more a year at the Jamaica Plain store than at the Dedham store, the report found.
“These types of price disparities place a significant burden on already struggling consumers,” Warren wrote, noting that the median household income in Jamaica Plain is $35,900 per year.
Stop & Shop confirmed to the Boston Globe that it has received the letter and plans to respond in the coming weeks.
“Stop & Shop does not under any circumstances take into account the socio-economic composition of a shopping neighborhood when setting prices,” a company spokesperson said.
The supermarket chain said several factors, including rental prices, store size and labor costs, could impact from location to location.
The Dedham location, for example, has comparable prices to stores in Hyde Park and Roslindale “in part because there are tenants in these locations that offset operating costs,” the company told the outlet.
It added that it is pursuing 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 if the price discrepancies highlighted in the report still persist.
It compared the prices of 15 items at the Dedham and Jamaica Plain stores, as well as Grove Hall and Hingham locations.
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Youth organizers found that the supermarket chain charged almost 20 percent more for groceries at a store in the working-class Jamaica Plain neighborhood (pictured) compared to Dedham, an affluent suburb of the city
Senator Warren said the company should not engage in corporate profiteering schemes that put pressure on residents and families.
Senator Elizabeth Warren has put the pressure on the grocery giant, demanding it shed light on the reasons for these price discrepancies
The outlet found that the Dedham store had the lowest prices of the four locations on 12 of the 15 items.
It comes as grocery store prices are among the top issues for Americans running in the presidential election.
Vice President Kamala Harris has laid out plans to implement a federal ban on price gouging in the food industry if she wins.
Price gouging occurs when retailers sharply increase the price of necessities, usually to take advantage of an adverse situation such as the Covid-19 pandemic.
Kroger, America’s largest supermarket chain, is also under investigation for its use of electronic price tags on store shelves across the country.
Senator Warren and Senator Bob Casey of Pennsylvania announced earlier this year that they were investigating the practice to see if the chain was engaging in surge pricing.
Meanwhile, Stop & Shop abruptly closed 32 “underperforming” stores earlier this year.
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.
