An analyst’s market-basket survey shows that Jewel-Osco’s grocery prices have increased 6 percent since the grocer trumpeted that it was cutting prices last spring on thousands of items.
Jewel-Osco’s parent company, Supervalu, has started reversing some of the promotions to make more profit, said Scott Mushkin, managing director at New York-based Jefferies & Co.
Indeed, Supervalu of Eden Prairie, Minn., prompted analysts to raise questions about the price creep when the company reported on Jan. 12 a higher-than-expected quarterly profit based on fewer promotions and tough cost controls.
The price of a sample market basket of groceries at Jewel-Osco stores in the Chicago area totaled $163 in January, compared with $155 during the grocer’s lowest-price promotions period in May 2009, the Jefferies report said. The market-basket survey measures fast-selling items that grocery stores promote, such as milk and eggs, as well as perishables such as fruits and vegetables.
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