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?
