At this point in Amanda’s shop local journey she should know that she is going to continue to face challenges even though she has been making an effort to spend my dollars at locally owned establishments for years. Obviously food is a necessity, and one of her greatest monthly expenses, so she decided to delve a little deeper into the grocery industry.
There are seemingly many choices on Cape Cod when it comes to food shopping, from regular grocery stores like Stop & Shop and Shaw’s to discount warehouses like BJ’s and Costco to specialty or concept stores like Whole Foods and Trader Joe’s. And there are, of course, locally owned versions of each of these types of markets.
However, chain supermarkets generated $528 billion in sales in 2009 or about 95% of total supermarket sales, while independent supermarkets, accounted for only 5% of the sales. The supermarket industry in the U.S. is highly competitive and rapidly consolidating. Larger chain grocery stores benefit from economies of scale – the cost advantage that arises with increased output of a product – so the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are shared over a larger number of goods. For this reason, larger stores can at times charge less for their products or create their own private label, which fuels the perception that local grocery stores are more expensive.
But when I chatted with Rory Eames, owner of the Organic Market in Chatham, Dennisport and Mashpee, she said that local stores actually can compete on price with similar priced and concept stores. OM usually “meets or beats conventional grocery stores and larger chain stores on prices on an item for item basis.”
This, of course, is not always the case, because the reality is that margins on grocery items are very low (one of the smallest in the economy), so smaller, independent stores often have to charge more to cover their overhead, namely living wages for their employees.
My reality is: if I was in a higher income bracket, I would do all of my grocery shopping at a locally owned store, because in some cases they charge more than the national and regional chain stores, but at this point I need to do what I call my “big shop” at a store where the economies of scale have lowered the prices. However, I want to make an effort to purchase my “fill-ins” throughout the week at one of the many locally owned grocery stores across the Cape, because I know more of those dollars will stay in this community and one industry owned by a few rather than many is rarely a good thing for consumers.
In addition to the Organic Market, some of my favorite independently owned markets and specialty stores in the Upper Cape are Windfall Market, Amber Waves and Jack in the Beanstalkin Falmouth, and Gray Gables Market in Bourne; in the Mid-Cape you can find one of theSmithfield Family Markets in Osterville, Barnstable Village or Yarmouth Port, Lambert’s andGuaranteed Fresh Produce in Hyannis, and Dennis Public Market and Ring Bros Marketplace in Dennis; the Lower Cape has Friends Marketplace, Phoenix Fruit, Orleans Whole Food Store, andNauset Farm in Orleans; and the Outer Cape offers Wellfleet Marketplace and 141 Bradford Natural Market.