A recent blind tasting reveals Walmart to be both price competitive and “taste competitive” in the organic and locally grown foods industry.
A chef in Austin prepared two equal meals using two sets of the same ingredients. One set of ingredients came from Walmart, the other set came from Whole Foods. Even though the ingredients were the same, the total price differed greatly: Walmart charged $126.02, Whole Foods $176.04. After the chef cooked the foods the same way and arranged them side by side on a plate, a group of local food experts tried the two versions. The verdict? Same taste!
So, why is there such a difference in price if the ingredients and their tastes are practically the same?
Steven Horwitz argues that
“It is Walmart's very size, so hated by so many progressives and conservatives, that has enabled it to be such a powerful player in the local/slow/organic food markets.”
In other words, Walmart’s average cost per unit is lower due to its size and production level.
Economy of scale seems to be the straightforward explanation. Do you think there is more behind Whole Foods’ higher prices?
Admittedly this is just conjecture, but it seems to me that while Walmart may have the same tasting food, Whole Foods can justify charging more because they offer more eccentric foods, beverages, etc. and more importantly what the taste test completely neglects is the actual quality of the food. After preparation by a professional chef, I probably wouldn't be able to taste a difference either, but I bet Whole Foods sells more quality food. (I am using quality to mean healthy) However, this is just a guess.
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