Shoppers understand that prices for the same items can vary quite a bit among competing retailers. A new study shows that shoppers shouldn’t expect consistent pricing among stores with the same name — even if they’re located just a few blocks apart.
One of the biggest appeals of a chain store is that there’s some consistency with the brand — no matter the location, every store with the same name and logo has essentially the same products, prices and services. A certain level of comfort and familiarity comes with shopping at a trusted chain retailer.
But a new study from the National Consumers League demonstrates that it’s unwise to let your guard down while hitting the aisles of your local chain drugstore. Researchers conducted price checks on 25 standard drugstore products — Huggies diapers, Tropicana orange juice, Folgers coffee, a bottle of Claritin allergy tablets — at 485 CVS, Rite Aid and Walgreens locations across the U.S. The results could be disturbing to anyone who hates overpaying.
While the study found inconsistent pricing among all three chains, Walgreens came out looking the worst by far. “Walgreens stores in a single market were up to five times more likely than a competitor to charge different prices for the same item,” the report states. What’s more, “Walgreens had more than eight times the number of products with a 20% or greater price range than CVS. Rite Aid had no products with that big of a gap. Walgreens also had more than twice the number of products with a price range over $1 than both competitors.”
Walgreens’ fancy flagship stores, which might offer sushi, smoothies, wine and manicures in addition to the usual selections of cold medicine and shampoo, were found to be particularly more expensive than other nearby locations. The total price for the basket of 25 items at New York City’s flagship Walgreens was $38 more (20% higher) than what the same items cost at other Walgreens locations in the city.
In a statement released to CNN Money, Walgreens spokesman Jim Graham confirmed that prices among locations are not consistent. In fact, variable pricing is part of the business model. “Costs can vary from one location to another, even when they are a few blocks apart in dense urban areas, based on the store’s cost of real estate, its hours of operation, including whether it is open 24 hours, labor costs and the number of customers it serves each day, among other factors,” the statement reads.
In the country’s heartland, however, Walgreens isn’t merely being accused of inconsistent pricing — which is perfectly legal, if aggravating from some consumers’ perspectives — but also of crossing the line by allegedly overcharging customers and using false and misleading advertising. A couple of weeks ago, Missouri Attorney General Chris Koster filed a civil lawsuit against Walgreens after a two-month investigation revealed that eight Walgreens in the state charged more than the price listed on shelves for roughly 20% of the items purchased. Instances of overcharging, according to the St. Louis Post-Dispatch, included clearance items that were rung up at full price and products advertised on sale that weren’t discounted at the register.
“This level of consumer deception is inexcusable from a corporation as sophisticated as Walgreens,” Koster said at a press conference. “In fact, it’s appalling.”
In Koster’s opinion, the pricing glitches weren’t a simply a matter of “sloppiness,” but occurred on purpose to get more money out of unsuspecting customers. “This is a business practice that is consciously intending to steal from sick people that go into Walgreens, from old people that go into Walgreens,” he said. According to the Post-Dispatch, the company has settled suits in other states after being accused of similar tactics.
“While we won’t comment on the complaint itself, we were disappointed and disagree with the attorney general’s comments,” reads a statement in response from the Walgreen Co., per the Chicago Tribune. “However, we are prepared to have a constructive dialogue about the issues he raised and address any appropriate concerns.”