The Price of Bread

Tough economic times mean tightening belts. Governments are scaling back financial commitments and consumers are holding back unnecessary purchases. Even kids are having their allowances cut.

Of course, these are all boilerplate clichés. In real life, human nature compels us not to miss out on a great deal — something the marketing industry will continue to reap rewards with, and the marketing industry will happily tag along (I should know, I used to be in such a business during my pre-Canadian career-gifted life.) But I digress.

However, in these times of penny-pinching, rolling-backing, discount-hunting and no-frilling, I have started noticing things that I never quite got a chance to appreciate until recently. First and foremost of which is The Price of Bread.

There is a medium-size chain-supermarket serving a nice little neighbourhood where I live. A couple of blocks away is a huge Chinese supermarket. Further up the same road is a giant chain-superbehemoth supermarket that prides itself on the premise that it “Won’t Be Beat.”

Like the Big Mac Price Index which is informally used to gauge a surprisingly appropriate economic climate of different countries, I have started comparing the price of bread at different supermarkets and stores. I do it not just to get the cheapest bread I can find, of course, but also to get an idea of which supermarket is doing what kind of business (read gimmickry.)

The Amazing Price Differential of Bread in a Toronto neighbourhood

I will consider the price of a loaf of 675g of a Famous-Brand Whole Wheat Bread.

NOTE: There are updated prices and observations under Updates at the bottom of this post. Be sure to read that after finishing this whole story (or bookmark this page for a more careful reading later, you don’t want to hurry the details!)

Nice Little Corner Canadian Supermarket

This is the quintessential Canadian corner supermarket adorning many a nook and corner of Canadian neighbourhoods (hint: think outlaws.) They seem to spend all their profits in printing and distributing weekly flyers for ridiculously overcharged products which are then discounted to look like a bargain. Even their low-tiered house-brands are more pricey than what’s available for well-known brands elsewhere.

This supermarket, I am certain, is only surviving because of its high profit-margin price of bread, simply because it is nearer to people’s homes than the other two big supermarkets. It’s much easier for little Billy to run over to the corner-supermarket late in the evening when Mom realizes they’re out of bread for breakfast than dad driving a few blocks down to the big supermarket and ending up buying more than what he went for (and forgetting the bread completely for which he took the trip in the first place.)

The price of a 675g loaf of Famous-Brand Whole Wheat Bread here is around $2.80 (with occasional ‘discounts’ of a dime or quarter thrown once in a while.)

Big Typical Chinese Supermarket

Their marketing philosophy is the same as the Great People’s Republic of China: The Best Price. Period.

They make all their money selling volumes of stuff. Plain and simple. Heck, they don’t even charge a mandatory $0.05 for shopping bags some days: no pretenses of customer service than quietly benefitting the customer financially. The strategy is simple: sell more, lower profits, make money, hence selling more. No flyers or Deals. Just believing in the trade-volume. No real frills. Strictly beneficial to both business and the customer.

The price of a 675g loaf of Famous-Brand Whole Wheat Bread is fixed at $1.69 (I have not seen any price fluctuation for over a year.)

The Unbeatable Big Behemoth Canadian Supermarket

In terms of volume, they seem to be doing just as well as the Chinese supermarket down the block. Their products are less ethnic, more secular and there is more variety of a given product. They have their own house brands which are somewhat cheaper than the well-known consumer brands. They seem to cater to more people on the whole, in terms of their promotions and overall brand-image of their chain which clearly spells a price advantage.

But still, The price of a 675g loaf of Famous-Brand Whole Wheat Bread fluctuates between $1.90 to $2.50.

However, to be fair to them, they do have the cheapest loaf of bread, regardless of any brand within the three supermarkets we’re comparing: priced at $1.47 (their own low-tiered house-brand, not the Famous-Brand we’ve chosen.)

Where do I shop? I combine the various benefits (all three have them) and opportunity costs of shopping at all three and use all three of them in combination. Nice Little One I only go to when I have to. Big Typical Chinese is my main supermarket for everyday and staple grocery and Unbeatable Big Behemoth for everything else.