Business: Food Prices Take Off Again

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Irate shoppers are balking more strongly than before at the high prices and seeking out money-saving shortcuts. Sales of so-called generic products, which come in plain packages and often cost 25% or so less than national brand products, continue to boom. Within the past six months, the Star Market Co., based in Cambridge. Mass., claims to have introduced unbranded products to the U.S., has had a 10% increase in sales on 85 of them. Its parent, Chicago's Jewel Companies Inc., now has 170 such items in its stores, and the company claims that almost all customers buy some of them. Favorites: paper products and dog food. Savings can be substantial. A 32-oz. bottle of no-brand ketchup normally costs 89¢, as compared with about $1.30 for nationally advertised brands. Doris Brown, a Chicago house wife with two children, says, "Whenever I can, I buy generic items—bathroom tissue and soda for the kids."

Other consumers are turning to no-frills food warehouses, where BYOB means Bring Your Own Bags. Safeway's Canoga Park store in Los Angeles until June 1980 was a struggling supermarket, but now it has become a popular food barn. There are no sweepstakes or eye-catching displays to attract customers. The store, moreover, charges 25¢ if people pay for groceries with a check, and grocery bags cost 3¢ each. Large yellow arrows on the aisle floors direct customers to Maxwell House coffee at $2.99 per lb., ground beef at $1.29 per Ib. and a 5-Ib. box of Tide at $2.58. All are substantially cheaper than at competing markets. On nights and weekends, when the store is most crowded, the atmosphere is akin to the running of the bulls down the streets of Pamplona. Bobbi Rice, 31, drives four miles to shop at the Safeway Food Barn, although two other supermarkets are nearer to her home. Says she: "We eat a lot of produce, and that is quite a bit less expensive here. Lettuce and tomatoes, for instance, are about 50% less than at other stores."

The Giant Food chain in the Washington area last week opened its first warehouse store in Clinton, Md. The prices are low, but the atmosphere is somber. The new warehouse carries less than half as many items as the chain's regular stores, and goods are put out on shelves while still in their shipping cartons. Individual items no longer carry the cost stamped on the top; prices are carried in the striped code that is read at the computerized checkouts. As a result, operating expenses are low, permitting the store to keep down its prices.

Retail-sales analysts predict that the spartan stores will continue expanding, as consumers look for new ways to beat inflation. Says Walter Loeb, food and retail analyst with New York's Morgan Stanley: "We have seen waves of warehouse stores before. A & P unsuccessfully tried it a few years ago. But now they are doing better and selling fresh produce, some dairy products and meat."