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Xerox University Microfilms 300 North ZaabRoad Ann Arbor, Michigan 40100 76-24,586 DEVINE, Donald Grant, 1944- AN EXAMINATION OF THE EFFECTS OF PUBLISHING COMPARATIVE PRICE INFORMATION ON PRICE DISPERSION AND CONSUMER SATISFACTION. The Ohio State University, Ph.D., 1976 Economics, agricultural
Xerox University Microfilms , Ann Arbor, M Ichlgan 48106
© 1976
DONALD GRANT DEVINE
ALL RIGHTS RESERVED AN EXAMINATION OF THE EFFECTS
OF PUBLISHING COMPARATIVE
PRICE INFORMATION ON PRICE
DISPERSION AND CONSUMER SATISFACTION
DISSERTATION
Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University
By
Donald Grant Devine, B.Sc.A., M.Sc., M.B.A.
*****
The Ohio State University 1976
f
Reading Committee: Approved by Bruce W. Marion Thomas T. Stout Dennis R. Henderson Leroy J. Hushak Adviser Department of Agricultural Economics & Rural Sociology ABSTRACT
The sCudy examines Che Implications of publishing comparative price information in a metropolitan retail food market. Changes In the range of prices between stores, the amount of price variation within stores, and weekly average price levels were monitored in both test and control markets. Similarly, measures of consumer satisfac tion with product and store characteristics were monitored over time as test market consumers were subjected to additional price informa tion.
The results of the experiment revealed statistically significant declines in price levels and in price variations subsequent to the introduction and publication of comparative price information. Con sumer satisfaction levels in the test market were significantly dif ferent (higher), after receiving additional information, than their control market counterparts who were not subjected to the experimental stimulus. The study generates several implications for those con cerned about market performance and the role of information in con temporary settings.
ii ACKNOWLEDGEMENTS
In preparation of this dissertation I am indebted to many people for motivation and guidance.
I am particularly grateful to Dr. Bruce W. Marion and to Dr.
Thomas T. Stout for their personal interest in my research, my career, and in my family. Thank you very much, gentlemen.
I am Indebted to Dr. Dennis R. Henderson and Dr. Leroy J. Hushak for their valuable suggestions and explanations regarding numerous theoretical and analytical problems. X vould also like to thank Mrs.
A.F.W. Plumptre and the staff of the Food Prices Review Board for both making the research possible and for collecting, producing, and publishing price and consumer data.
To my typists Mrs. M. Jamieson, Mrs. M. Pearson, and Miss C.
Wheten, my sincere thankB for editing, managing and preparing the manuscript.
To my wife, Chantal, and to Michelle, Monique, and David - thank you for being there every time I needed encouragement.
To my parents, may I summarize my affection and appreciation with the following philosophy:
What you get depends upon what you do.
What you do depends upon who you are.
Who you are depends upon how you are raised.
iii VITA
July 5, 1944 Born - Regina, Sa skatchewan, Canada
1967 .... B. Sc., University of Saskatchewan, Saskatoon, Saskatbhewan.
1968 . . . . Executive Assistant, Canada Agriculture, Ottawa, Ontario.
1969 - 1970 Research Associate, The University of Alberta, Edmonton, Alberta,
1969 . . . . M.Sc., The University of Alberta, Edmonton, Alberta.
1970 . . . . M.B.A., The University of Alberta, Edmonton, Alberta.
1970 - 1972 Marketing Specialist, Agriculture Canada, Ottawa, Ontario.
1972 - 1974 Research Associate, The Ohio State University, Columbus, Ohio.
1975 . . . . Associate Frofessbr, The University of Saskatchewan, Saskatoon, Saskat chewan.
PUBLICATIO]US
"An Empirical Study of Metropolitan Ma rket Conduct in Food Retailing," Canadian Journal of Agricultural Econ amics XVIII, No. 2, 1970, pp. 41-51.
"Implications of Improved Information On Market Performance," The Journal of Consumer Affairs, Vol. 6, :k>. 2, 1972, pp. 184-197.
"Industrial Organization and Policy Deivelopment in a Dynamic World," Canadian Journal of Agricultural EconoimicB XVII. No. 2, 1969, pp. 106-117.
"Project 75...Trying to Make a Complex System Responsive to Real Demands," Agrologist. Vol. 1/3, May/June, 1972.
iv FIELDS OF STUDY
Major Field: Agricultural Economics
Studies in Economic Theory. Professor L.J. Hushak, Pro fessor T. Koizumi, and Professor K.J. Kopecky.
Studies in Econometrics and Research Methodology. Professor J.S. Cunningham, Professor F.E. Walker, Professor S. Relmer, and Professor T.T. Stout.
Stuides in Industrial Organization. Professor D.R. Hender son, Professor B.W. Marion, and Professor D.O. Parsons.
Studies in Marketing. Professor A.W. Cullman, Professor J. Bartels, Professor R.D. Blackwell, Professor J. Ginter, Professor B.J. Lalonde, and Professor W.T. Talarzyk.
v TABLE OF CONTENTS Page ABSTRACT ii
ACKNOWLEDGEMENTS ill
VITA iv
LIST OF TABLES lx
LIST OF FIGURES xii
Chapter
I. INTRODUCTION 1
The Problem Characteristics of Food Retailing Objectives of the Study The Research Setting Scope of the Dissertation
II. THEORETICAL DEVELOPMENT 10
Influence of Product and Market Characteristics Buyer Search Search By Different Types of Consumers The Interrelationships Between Information and Market Structure Effect of Information on Market Conduct Effect of Information on Market Performance Study Hypotheses Welfare Measures
III. RESEARCH DESIGN
Overview Pretest-Post Test Control Group Design The Selection of Markets and Stores The Market Basket The Price Index Formulation of Price Variances Measurements of Consumer Satisfaction Collection and Dissemination of Price Information The Consumer Questionnaire Sampling Procedure Limitations of the Study
vi IV. RETAIL PRICE BEHAVIOR 64
Pretest Price Behavior Post Information Price Behavior Analysis of Major Implications A Review of Firm Strategies Additional Findings An Empirical Measure of Social Benefits
V. CONSUMER BEHAVIOR...... 97
Pre-Information Results In The Test Market Consumers Satisfaction In General Consumer Satisfaction With Specific Food Products and Store Characteristics Analysis of Major Implications Pre-Information Results In The Control Market Consumer Satisfaction In General Consumer Satisfaction With Specific Food Products and Store Characteristics Analysis of Major Implications Post Information Results General Post Test Comparisons: Ottawa-Hull versus Winnipeg Perceived Measures of Social Benefit
VI. SUMMARY, CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS 129
The Setting Summary of Findings Conclusions Implications Selected Recommendations
APPENDIX
A ...... 153
B ...... 157
C...... 159
D ...... 181
E ...... 209
F ...... 212
vii G...... 214
H...... 229
X ...... 231
J ...... 245
BIBLIOGRAPHY ...... 248
vili LIST OF TABLES
TABLE PAGE
1. An Example of the Press Release on Store Price Compari sons, Ottawa-Hull, September, 1974. 55
2 . An Example of the Press Release on Product Price Compari sons, Ottawa-Hull, September, 1974. 57
3. Average Weekly Store Price Index Levels for all Stores, Ottawa-Hull and Winnipeg Plus High-Low Extremes for Ottawa-Hull, 1974. 66
4. Analysis of Variance of Retail Food Price Index Levels for all Stores over Selected Time Periods Ottawa-Hull,
1974. * + 69
5. Analysis of Variance of Retail Food Price Indices for Selected Store Affiliations and Selected Time Periods, Ottawa-Hull, 1974. 70
6. Store Price Rankings over the Entire 26-week Survey Period Including Significant Differences by Neighborhood Markets, Ottawa-Hull, 1974. 74
7. Regression Analysis of Store Price Index Level by In- Store Price Variation, 26 Stores for 26 Weeks, Ottawa- Hull, 1974. 78
8. Student t Tests Examining Pre- and Post-Information Price Levels and Variance Levels, Ottawa-Hull, 1974. 83
9. Price Index Rankings for all Stores for the Period of August 24 to November 30, Ottawa-Hull, 1974. 85
10. Analysis of Variance of Store Price Index Levels by Geographic Areas Including the Percentage Change in Price Levels, Ottawa-Hull, 1974. 90
11. Changes in Weighted Price Index Levels Published versus Nonpublished Items Including t Tests for Significant Differences, Ottawa-Hull, 1974. 93
12. Consumer Satisfaction Levels with Selected Food and Store Characteristics, Ottawa-Hull, July, 1974. 98
13. Consumer Satisfaction with Selected Store and Personal Information Characteristics, July, 1974. 101
ix LIST OF TABLES (Continued)
TABLE PAGE
14. Stepwise Regression Analysis: Levels of Food, Store and Price Satisfaction by Consumer Demographics, Ottnwa- Hull Respondents, July, 1974. 103
15. Stepwise Regression Analysis: Levels of Consumer Satis faction with Available Information by Consumer Demo graphics Ottawa-Hull, July, 1974. 105
16. Regression Analysis: Levels of Consumer Satisfaction with Food, Store, and Price Characteristics by Satis faction Levels with Available Information, Ottawa-Hull, July, 1974. 106
17. Regression Analysis: Levels of Consumer Satisfaction with Food, Store, and Price Characteristics by Consumer's Need for additional Information, Ottawa-Hull, July, 1974. 107
18. • Levels of Consumer Satisfaction with Selected Food and Store Characteristics, Winnipeg, July, 1974. 109
19. Levels of Consumer Satisfaction with Selected Store and Personal Information Characteristics, Winnipeg, July, 1974. 111
20. Stepwise Regression Analysis: LevelB of Consumer Satisfaction with Food Stores and Prices by Consumer Demographics, Winnipeg, July, 1974. 112
21. Levels of Consumer Satisfaction with Selected Product, Store, and Information Characteristics in Ottawa-Hull and Winnipeg, November, 1974. 114
22. Analysis of the Significance of Change in Consumer Satisfaction Levels, for Ottawa-Hull and Winnipeg, November, 1974. 119
23. The Distribution of Values Offered for Information by Ottawa-Hull Respondents, November, 1974. 122
24. Results of Regression Analysis: Values Offered for Information by Consumer Demographics, Ottawa-Hull, November, 1974. 123
25. Analysis of PriceB Offered for Information - Direct Versus Indirect Information Recipients, Ottawa-Hull, November, 1974. 123
x LIST OF TABLES (Continued)
TABLE PAGE
26. Frequency of Consumers Changing Stores Because of Information In Ottawa-Hull and Winnipeg, November, 1974. 124
27. Change Instore Patronage By Consumers In Ottawa-Hull and Winnipeg, November, 1974. 125
28. Frequency of Responses of Ottawa-Hull Respondents on Opinions of Information Program, 1974. 126
29. Frequency of Consumer Response to Different Types of Information Media, Ottawa-Hull and Winnipeg, November, 1974. 127
xi ILLUSTRATIONS
FIGURE PAGE
1. Firm Reactions To Price Information 28
2. Retail Food Store Cost Functions, National Commission on Food Marketing Study 32
3. Evaluation of the Welfare Effects of Price Changes 41
4. Average Weighted Store Price Index Levels for Selected Supermarkets, Ottawa-Hull and Winnipeg, 1974 67
5. Movement at the Consumer Price Index - May - November, 1974 72
6. Average Market Price Level and the Average Within Store Price Variation for all Stores During Each Week of the Study, Ottawa-Hull, 1974 81
7. Weekly Price Index Levels for High and Low Stores and Their Affiliated Group, Ottawa-Hull, 1974 88
8. Aggregate Demand Function for Food and the Welfare Effect of Price Changes 94
9. Cumulative Frequency of Consumers Willing to Purchase Weekly Price Information at Selected PriceLevels 122
xii APPENDIXES
Appendix Page
A. Specific Food Items Monitored During the Price Study and the Corresponding Price Weights for Each Item, Ottawa-Hull, 1974. 154
B. A Summary of Price Changes for Individual Retail Food Stores, Ottawa-Hull, 1974* 157
C. A History of Store Price Rankings During the Publication and Post Publication Periods of the Survey, Ottawa-Hull, 1974. 159
D. The Questionnaire Employed in the Pre- and Post- Test Consumer Surveys, Ottawa-Hull and Winnipeg, July, 1974. 181
E. Demographic and Social Population Data for Electoral Districts of the Ottawa-Hull Area, 1971. 209
F. A Summary of the Consumer Demographic Charac teristics for Ottawa-Hull Survey Participants, 1974. 212
G. Levels of Consumer Satisfaction with Specific Food Products, Ottawa-Hull Respondents, July, 1974. 214
H. A Summary of the Consumer Demographic Charac- ,/~teristics for Winnipeg Survey Respondents, 1974. 229
I. Levels of Consumer Satisfaction with Specific Food Products, Winnipeg, Respondents, July, 1974. 231
J. A Comparison of Price Ranking Positions Using Alternative Index Formulations, Ottawa-Hull Price Survey, 1974. 245
xiii Chapter I
INTRODUCTION
The Problem
Most market transactions are characterized by varying degrees of imperfect information and the retail food market is no exception* With frequent price changes, increased product lines, and new forms of pro duct and store differentiation the task of comparative shopping is com plex and difficult for even the most ardent shopper.
The complexity in retail markets represents more than just a pri vate concern; it results in a public problem as well. Policy makers find retail performance both difficult to understand and difficult to change.
Inflation, particularly evident at the consumer level, has been the center of considerable concern in recent times. Wage and price controls in United States and Great Britain, a Food Prices Review
Board and an Anti-Inflation Review Board in Canada, and the increased public regulation of goods and services through marketing boards and marketing orders are indicative of public efforts to improve market performance. These public prescriptions to market ills have not always been successful, however, and many have turned out to be frustrating experiences as a result of economic distortions in both product and factor markets.
Perhaps part of the reason for governments turning to market
"control" type measures such as those cited above is a lack of under 2 standing of how and why markets perform. Economists may have to bear some of the responsibility for this lack of understanding. Classical economic theory, for example, reveals Imperfections in addressing in flation and in broader sense the whole disequilibrium problem in im perfect markets.
Boulding asserts:
We can think of the development of Imperfect markets as a result of the fact that when commodities become extremely diverse and compli cated, when we have to know not only their price but also their quality, arbitrage in effect breaks down, because the cost of acquiring the rele vant knowledge is more than the market is willing to support. Hence we get imperfect markets facing both buyers and sellers.... the problem of knowing what are the sales or purchase functions becomes not only acute but almost insoluble, simply because in order to know a function we must have experience with a system beyond its present point. It is this failure to understand the epistemological problem involved which has vitiated much of the otherwise laudable attempt to expand the theory of perfect competition to imperfect markets (2, p. 25).
Most economic models assume (implicitly or explicitly) that man agers and consumers have adequate information with which to make ra tional decisions. Few economists have considered the theoretical consequences of inadequate Information and virtually no models have been developed to adequately evaluate the consequences of Improving market information. In many cases economists have limited their dis cussion (and consequently their research) to the difficulties involved:
... traditional economic models are not of much help in understand ing retail food prices because traditional theory deals with the price of a single commodity where modern stores sell a composite product. The price of a basket of food might be explained by traditional theory were it not for the fact that shoppers are never in a position to com pare the prices of food-baskets. As a consequence, food stores do not have to compete on a general price level but on a commodity by commodity basis. The Impression of economy — - which may be conveyed by one of two extraordinarily low prices --- is more important than real economy. Meanwhile the variation of prices, commodity by commodity and week by week, makes interfirm comparisons of the general price level impossible for the consumer. (30, p. 120) In short, there is evidence of a consumer problem, a public problem, and a theoretical problem associated with retail market performance. The question is, do these problems reduce general economic welfare?
If the problem is a deficiency of information then a consequence can be prices that are higher than competitive norms. If buyers are unable to differentiate between offers in various stores, the market can theoretically support a wide range of prices for a single commodity dur ing a single time period. The result is that consumers may pay more for * * food, or similar items, than would be the case under conditions of more complete information. If buyers are unable to differentiate between the relatively high and the low priced sellers then their fundamental role in evaluating and consequently Influencing price levels is significantly impaired. Moreover, economic theory at even the most fundamental levels recognizes that this offers potential advantages to sellers in these circumstances.
In a perfectly competitive world, employers who develop a taste for discrimination will be undersold by less discriminating enterpre- neurs — while perfect competition will not support discrimination, mar kets with imperfect information will, (20, p. 1285)
Thus, when consumers can not accurately differentiate offers and reveal their preferences market inefficiencies and distortions can occur.
Perhaps the unfortunate consequence 1b that we often attempt to control what we don't understand rather than trying to understand what seemB to be beyond our control.
Characteristics of Food Retailing
The focus of competition in retail food markets is generally within a metropolitan area. Although the firms involved often operate in several areas, and hence may be considered regional or national chains, consum
ers rarely travel to another metropolitan center to purchase groceries.
In short, the geographic dimensions of these markets are local in nature.
Local concentration in retail food marketB is generally moderate
to high. In 1967, the four largest firms in each of 218 United States
Standard Metropolitan Statistical Areas represented 51 percent of the
metropolitan grocery Btore sales on the average. In the teBt market
used in this study, the four largest firms operated approximately 45
out of the 60 major stores and accounted for about 90 percent of all
grocery store sales. By Bain's (1, p. 115) classification, the test market was very highly concentrated.^
Entry barriers vr>u!d be considered moderate to high in most metro
politan markets for nul.1-unit organizations. The scarcity of good
1/ Bain makes the following classification of Industries
Theory Concentration Ratios
4 Firm 8 Firm
Very highly concentrated 75 90 Highly concentrated 65 85 Moderately concentrated 50 75 Low grade oligopoly 35 45 Unconcentrated Less than 35 Less than 45
Approximate Distribution of Sales in Test Market
A & P 3.0 percent Dominion 22.0 percent I.G.A. 16.0 percent Loblaws 27.0 percent Steinbergs 28.0 percent Others 4.0 percent
Source: Off-the-record estimates by Canadian retailers store sites, economies of scale, and the enterprise differentiation of established retail firms are the major deterrents to new multi-firm entry.
The degree of enterprise differentiation varies greatly but would likely be> considered moderate on the average. Enterprise differenti ation is synonomous with product differentiation if the "product" of retail firms is interpreted broadly to include store location, design, cleanliness, and customer services that are an integral part of the package of goods and services which retail firms sell.
The typical supermarket stocks approximately 9,000 items.—^ With the possibility of differences in the quality and prices of these many items and differences in the store related services, competing retail firms can potentially offer a myriad of different product-service packages to consumers. The complexity of the retail "product" creates difficulty for consumers in making accurate comparisons between compet itors, and for observers in trying to understand retail firm competitive behavior.
Compounding this complexity is the frequent changing of prices by retail firmB. Many of these price changes are associated with weekend
"specials". Such price changes may be made to reflect changes in whole sale costs, to offset the price reductions on "specials", or to confuse consumers. Regardless of the reasons for frequent price changes, the effect is to make store comparisons more difficult.
1/ The typical supermarket stocked 9,000 items in 1974. An item refers to a particular size and brand of a product, such as #303 French style Del Monte canned beans* (29) For the most part, consumerB must rely on their personal experiences and observations from shopping at alternative stores in making their store selection decisions. Commercial or government reports which pro vide store comparison information are generally not available. There is no such thing as a Consumer Report for food retailing, yet the annual expenditure per family in food stores dwarfb the expenditure for nearly every other consumer product.
Although the total consumer expenditure in food stores is relatively large, the money spent on any one particular item is relatively small.
Thus, the potential benefit derived from store to store comparisons of
Inexpensive items is marginal. On the other hand, to derive more sub stantial savings by comparing several hundred inexpensive items in several stores requires considerable time and expense. On an Individual basis, it is questionable whether the benefits of extensive search in retail food markets would outweigh the costs incurred in collecting the information.
Objectives of the Study
The objective of this research experiment was to determine the im pact of additional comparative price information on buyers and sellers in an urban retail food market. Market performance was considered a dependent variable and was measured from two vantage points; (1) price efficiency and (2) perceived consumer satisfaction. The key independent variable w s b market information, specifically the level of comparative price information over time.
The proposed relationship between price information and price levels stems from Stigler's (26) 1961 thesis that price dispersion, a frequency distribution of quoted prices, is a measure of market ignorance. Prices are considered to be efficient if they accurately reflect both costs and preferences. Consequently both the level and the distribution of prices were monitored as price information was improved.
In its relation to consumer preferences price efficiency is con cerned with the balance or mix of products. If buyers and sellers are perfectly informed, entry is free, resources are mobile, and an adequate selection of products are available from which buyers can choose, then the balance of products produced is assumed to be optimal when the price of each product equals it's average cost.
Similarly, the optimal dispersion of prices at equilibrium is assumed to occur when prices accurately reflect consumer preferences with appropriate allowances for transportation, processing, and storage costs.
Deviating dispersions represent either conditions of monopoly profits or inaccurate reflection of preferences or both. (A more comprehensive de velopment of firm and consumer behavior patterns is presented in Chapter
II).
The Research Setting
To determine the impact of additional information on market conduct and performance a pretest - post test control group design was employed to delineate and isolate the effects of the experimental treatment.
Publication of comparative food price information was the manipulative stimulus applied to the test market. The test and control markets were two Canadian metropolitan areas, Ottawa-Hull and Winnipeg respectively, each with a population of approximately 500 thousand. The information on store prices and consumer satisfaction was ob
tained from primary sources as a result of a research agreement between
the Ohio Agricultural Research and Development Center and the Canadian
Food Prices Review Board. Retail food stores were monitored for seven months in both a test and a control market. Random samples of consumers
in each market were sent pre- and post test questionnaires about their
satisfaction with market performance.
Scope of The Dissertation
In Chapter II, several concepts in received literature on economic
theory, industrial organization, public goods theory, and search and in
formation theory are reviewed in an effort to derive a comprehensive
framework for measuring market performance. Because an examination of consumer perception is often neglected in evaluating market performance,
theories associated with consumer behavior are reviewed to improve ex
isting performance norms. The final paragraphs of the chapter are de voted to some theoretical and empirical problems associated with measur
ing the value of improved market information.
The methodological format employed in the study is presented in
Chapter III. The discussion elaborates on pretest-post test control group procedures, sampling, questionnaire design, index formulation, market, store, and food basket selection, pricing procedure, monitoring
and limitations of the study.
In Chapter IV the results of the research on price behavior and retail performance are summarized. The results are organized around the
implications regarding retail pricing activity presented in Chapter II. In Chapter V the research findings on consumers1 response to addi
tional information are presented. The analysis follows a format as out
lined by the behavioral implications outlined in Chapter II. The docu mentation includes an examination of what consumers are willing to pay
for additional Information.
The research findings in total are summarized and conclusions and
potential policy Implications are drawn in Chapter VI. Chapter II
THEORETICAL DEVELOPMENT
This research was conducted with the premise that consumers have inadequate information with which to rationally choose retail food stores and hence are unable to accurately express their preferences in the market place. The objective of the research was to observe how buyers and sellers would react to increased levels of comparative price « t information. Since nearly all models of economic theory implicitly or explicitly assume that managers and consumers have adequate Information with which to make rational decisions, a search of the literature re vealed no completely appropriate theoretical models. The conceptual framework which is developed in this chapter will thus attempt to draw upon and integrate into a cohesive whole several theoretical concepts and empirical findings. A conceptual framework is needed which will provide insights and hypotheses concerning the effects of different levels of buyer information on the structure, conduct and performance in markets with different buyer and seller characteristics. Hypothesized effects of both inadequate buyer information and the Infusion of improved information into such markets are of interest.
Influence of Product and Market Characteristics
Does the impact of different levels of information depend upon the product involved or the structure of the market? Is information more likely to be inadequate or "needed*1 in certain product or market struc-
10 11 ture situations? Does additional price Information influence market structure as well as market conduct? These questions provide useful starting points in the conceptualizing task. The objective Is (1) to generate a model that approximates the test market and (2) to determine if different models will support Implications appropriate for- measuring market performance.
Perfect competition and monopoly represent the two extreme market models of economic theory. To consider whether information may have different effects on market conduct in structurally different markets, we first examine two models which approach theoretical extremes.
Model I Consider a highly price competitive market that contaius a large number of firms selling a single homogenous product to a large number of buyers. If firms have similar cost curves and buyers and sellers have perfect Information, prices will converge to a single equilibrium price, P*, which approximates firm marginal costs.
Imagine the above conditions with one exception; assume Imperfect price information exists among buyers. In this case, a single price will not likely prevail. If it is assumed that P* 1b essentially the floor price and that firms are not expected to quote prices below mar ginal cost, the average price at equilibrium will be above F*.
Under these imperfect conditions the dissemination of additional comparative price information is expected to reduce the range of prices between firms and lower the equilibrium price level. The more perfect the information program, the smaller the price dispersion, and the closer the equilibrium price level would be to P*. In other words, 12 pricing efficiency, the accuracy In which prices reflect both costs and preferences, would be expected to Improve.
Model 2 Consider a market that has a few firms selling a homogenous product to many buyers. If firms have similar cost curves and buyers and sellers have near perfect price information, prices will converge to a single equilibrium price p**. If seller interdependence is high, theory and empirical evidence suggests that p** would be higher than
P*, assuming all economies of scale are achieved with an atomistic market, but below the monopoly price Pm . (If we assume a collusive oligopoly the single equilibrium price would be PU .)
Consider the market in Model 2 but assume that buyers have imper fect price information. A single price will not likely prevail and the equilibrium condition will likely be characterized by a range of prices, the average of which may be higher or lower than p**. Since in this case p** does not equal marginal costs, it does not represent a cost floor. In addition, firms may be unsure of their marginal revenue curves and thus may price either above or below P** (or above or below
Pm in the event of collusion).
Under the above conditions, the dissemination of additional com parative price Information would be expected to reduce the dispersion in prices but may or may not change the average price level. If prices reflected a normal distribution around p**, the market price level would not likely change at all with additional information. If improved in formation made it easier for firms to collude then the average market price level could be expected to increase toward Pra. Alternatively however, it is also possible that improved information might reveal 13
that the profit maximizing price Pm was indeed lower than collusive
sellers thought it was under Imperfect information conditions.
If we assume a firm has power over prices it becomes theoretically
impossible to predict if prices will go up or down as a result of addi
tional price information. The probability of a price decline may in
crease as theoretical constructs approach the perfect market (less
probability of collusion) but assumptions about market ignorance, the
importance of price to customers, the extent and causes of entry barriers,
the public power or moral suasion, the general sensitivity of sellers to
a few informed buyers, and changing consumption habits may or may not
result in price declines in different homogenous product markets.— ^
Once we venture out of the "comfortable" world of product homo
geneity, the probability of predicting the effect of different levels of information decreases even further* In markets with differentiated products, price dispersion is often expected due to differences in firm costs and buyer preferences. Inadequate price information would be
expected to result in price dispersions which do not accurately reflect differences in costs and preferences, but may have no predictable effect on average price level. Consequently, the introduction of additional comparative price information into a monopolistically competitive mar ket or a differentiated ollgology may reduce the dispersion of prices
17 The direction of the price change may largely depend on the specific source of monopoly power. For example, if economies of scale were keep ing firms out of the market then increased information would not likely reduce the entry barriers or prices, but if ignorance was a barrier to entry and a source of monopoly power then improved information could very well reduce the price level in the market. Thus, while various structures will in theory react to information differently, Information could also be expected to change market structures. u and reduce the market price level but it could also widen the dispersion of prices and increase the market price level; the more homogenous the product the higher the probability of the former possibility.
In general, predicting short run behavior in Imperfect markets would seem to be extremely difficult. Although improved information is likely to improve the accuracy of consumer assessments of enterprise differentiation, we have no way of knowing for sure which firm will benefit and which one will be penalized. Those that are penalized may not necessarily be the high priced firms and the dispersion of prices may in fact widen. In short, price dispersion and the average market price level may move in similar or in opposite directions in the short run.
To this point, we have largely considered information effects in markets with different seller characteristics. It is worth noting that the structure of buyers in a market likely influences the effect of different levels of information. In a market with very few buyers, their level of knowledge of seller prices would be expected to be greater than in a comparable market Involving many buyers. This point will be explored further as we consider the role of buyer search.
Buyer Search
In one of the early articles on information, Stigler said (26, p.
213):
"Prices change with varying frequency in all markets, and, unless a market is completely centralized, no one will know all the prices which various sellers (or buyers) quote at any given time. A buyer (or seller) who wishes to ascertain the most favorable price must canvass various sellers (or buyers) - a phenonmenon I shall term "search,,.,f 13
Emphasizing the fact that price dispersion is "ubiquitous even fox homogenous goods", Stigler develops the thesis that the degree of price dispersion for homogeneous products depends upon the level of buyer search. In examining the factors that affect the amount of buyer search, he suggests the following:
- Search depends upon the expected savings from search. This in turn depends upon the expected dispersion of prices (potential saving per unit), the quantity of the product to be purchased, and the proportion that expected savings represent of buyer income.
- Search depends upon the expected correlation of prices over time since this affects the potential savings in future time periods from current search.
- Search depends upon the cost and complexity of the search task. If it is assumed that buyers (and sellers) equate the marginal cost of search to the expected marginal benefits, then factors which increase the cost of beneficial search — such as large geographic markets or complex purchase environments — tend to discourage the quantity of search. (In addition, if it is as sumed that buyers will purchase only when the level of uncertainty is acceptable, then the cost and difficulty of search is likely to influence the quantity consumed. The cost of search is a cost of purchase.)
If we accept these basic tenets, then we would expect search to be high in those product markets where the price dispersion times the quan tity purchased per buyer represents a large potential savings, where prices are perceived to be highly correlated over time, and where the cost and complexity of the search process is relatively low. Product markets where search is likely to be low would be characterized by the reverse of the above.
The level of accumulated search in a market is also posited to inr fluence the degree of price dispersion. In addition to the above factors which influence the level of search at any point in time, Stigler suggests 16
that the amount of accumulated search depends upon the proportion of
repetitive (experienced) buyers in the markets and the proportion of
repetitive sellers. With a high proportion of repetitive sellers, prices
would be expected to be highly correlated over time. In this situation,
a high percentage of repetitive buyers would represent a larger amount
of accumulated "effective" search.— ^
In attempting to apply Stigler's propositions to the subject of
this study, several problems are encountered. Most Importantly, Stigler’s 2/ article focuses primarily on markets with homogeneous products.*- In
17 The similarities between the factors identified by Stigler as affect ing search and those defined by Engel, Kollat and Blackwell (11, p. 60-61) are worth note. Engel £ t fll suggest that the following conditions pro vide circumstances in which consumers will most likely search or respond to an Information stimulus: 1. Situation Variables: a. There has been little or no relevant experience because the individual has never purchased the product before. b. There is no past experience because the product is new. c. Fast experience is obsolete because the product is purchased Infrequently. d. Fast experience with the product has been unsatisfactory. e. The purchase is considered to be discretionary rather than necessary. f. The purchase is considered to be particularly Important, for example, a gift. g. The product is socially "visable".
2. Product Characteristics: a. The consumer feels committed to the product for an extended period of time, so that future needs and/or product perform ance are difficult to forecast. b. The consumer perceives available alternatives as having both desirable and undesirable attributes. c. The product is high priced relative to the consumer's income.
2/ Stigler's examples (Ford cars and steel) are of homogeneous products but he acknowledges that heterogeneity in service, location and adver tising could exist. 17 such markets, price dispersion represents an undersirable imperfection.
In markets with differentiated product-service offers, however, the same conclusion may not hold. Some degree of price dispersion is ex pected if buyers perceive alternative products as imperfect substitutes and if the cost of producing different products is not equal. Thus, the point of concern in differentiated product markets is not whether price dispersion exists, but rather whether the dispersion accurately reflects buyer preferences and seller costs.— ^
Buyer search would appear to play an important role in policing the
"accuracy of price dispersion" in all product markets. In differenti ated markets, however, the search and purchase process is compounded by the differences in the quality of the product-service offers which must be weighted against price differences. We would hypothesize that as quality evaluation becomes more difficult, the quantity and cost of the search required for "informed decision making" increases. Where search costs are considered too high by buyers, they may either refuse to pur chase, or elect to purchase on a partially informed basis. In short, consumers will continue to pay higher prices in their selected store until the cost of searching is perceived to be less than the difference in prices. Quality evaluation, however, has likely become a more diffl-
1 7 Stigler implies though, in talking about Ford cars, that Improved price information on homogeneous models may reduce the dispersion of prices notwithstanding service, advertising, and location differences between sellers. As argued by Rothchild (20) however, Stigler's model does not effectively suggest what causes the dispersion of prices in Imperfectly informed homogeneous markets in the first place; a point we will return to in later paragraphs. 18
cult problem for consumers over time as the number and complexity of
products has Increased.
Although consumers may make many purchase decisions with Inadequate
t information (consider the problem of evaluating the quality of different
automobilesl stereos, or television sets, or the price differences be
tween supermarkets or department stores where thousands of items are carried), it is assumed that consumers prefer more Information to less.
Thus, it is assumed that information that is considered impartial (and
therefore credible) would be sought and used by consumers as long as
the marginal costs of obtaining the Information are less than the ex pected marginal benefits.
Given the above qualifications regarding the application of Stigler's paradigm to differentiated product markets, his propositions concerning search behavior have some relevance to the study market. In particular, most of the factors poBlted to Influence the quantity of search would appear to apply to both heterogeneous and homogeneous product markets.
The retail food store - consumer market is characterized by repeti tive buyers and sellers, a positive influence on the amount of accumu lated search. However, search may be discouraged by other characteris tics of this market. While the total expenditures by consumers for food is very large and the potential savings from selecting a low priced store may also be substantial, consumers may perceive relatively small savings since they are achieved in innsll increments. A few pennies here and there may not seem as worthwhile, even though the quantity of items pur chased per year is very large, as the 30 or 40 dollars that might be saved on a television set by search of the various retailers. 19
In addition, the cost and complexity of the comparison task is very likely to discourage search. With eight or nine thousand items in a typical supermarket, price comparisons would be difficult if all were equal. (29) Add to this the differences in the quality of products carried and the services offered and Bearch becomes extremely complex.
This is further compounded by the frequent price changes which charac terize food retailing and probably reduce the correlation of prices at different stores over time.
Thus, the "cost" of the search required for an individual buyer to accurately evaluate the product-service-price offers of different food stores would be expected to be large and may well exceed expected sav ings for any individual buyer. If this is in fact true, then search would be expected to be relatively low, the likelihood of inaccurate price dispersions high, and one-store patronage would prevail over search activities.
The amount of seller search is also posited to influence price dispersion. Stigler suggests that sellers govern their search by equa ting the marginal costs and marginal benefit of search. If this is approximately true and if few benefits are perceived due to the low price awareness and sensitivity of consumers, then search by retailers also may be low. This increases the likelihood of price dispersion across stores which inaccurately reflect differences in consumer pre ferences and seller costs.
Thus, this hypothetical evaluation suggests relatively low levels of search in the retail food market and a high probability of wide price dispersions. The rationale developed to this point provides little 20
definitive indication of whether the price dispersion is likely to be
too wide or too narrow; nor does it suggest whether the average level
of prices will be above, the same or below the perfect Information
level^ ■ *
Search by Different Types of Consumers
The previous discussion has examined the likelihood and role of
search in different product markets. Search may not be a uniform
phenomenon, however. To the extent that some consumers are expected to
do little search and hence to be relatively uninformed, they may be
more vulnerable to discriminatory treatment.
Consumer behavior studies have indicated that search is most likely
among consumers which have a college education, are in the middle income
category,; are under 35* years old,'and hold.a white-collar occupation
(11, p. 60-61). If the consumer behavior findings are reversible, the
consumers who are least likely to search and be informed, and hence most
vulnerable to exploitation, are those who are poorly educated, relatively
old, of low or high income, and relatively unskilled.
Applying this to the study at hand, if significant differences in
store price levels are associated with different neighborhoods, one
would expect the higher priced stores to be located in underpriviledged
areas. Previous research by Devine and Hawkins (10) supports this pro
position.
V To this point we are Implicitly assuming that information will only Influence market conduct (prices), but not market structure i.e. barriers to entry. 21
The Interrelationships Between Information and Market Structure
At the outset of this chapter, the Influence of information In two extreme market models was examined. The rationale developed at that point provided few theoretical insights Into the effects of vary ing levels of information on the behavior of Imperfectly competitive markets. At this point, we reexamine the relationships between infor mation and the structure of markets, but in a dynamic setting. Instead of assuming a given market structure, we will explore the structure changing role of information. Drawing on the framework of industrial organization theory, succeeding sections will examine the impact of in formation, on market conduct and performance.
Past empirical results have demonstrated a rather consistent posi tive relationship between industry profits (usually a surrogate for allocative efficiency) and the structural dimensions of market con centration, barriers to entry and product differentiation. (21, p.400)
Thus, while the level of Information possessed by buyers and sellers is rightfully a structural dimension itself, the Influence of changing levels of price information on seller concentration, entry barriers and product differentiation is of particular interest.
Most industries Include both superior and inferior companies. In ferior firms, for our purposes, will be defined as companies who, rela tive to their competitors, produce output with low utility per dollar of cost. That is, the cost of their products are high relative to the value accorded them by consumers. It seems highly likely that in ferior firms survive, at least in part, because of buyer ignorance.
Increasing the amount of price information would tend to either drive 22
such firms out of business or force them to improve prices, products,
or technology. On balance, the effect would be to reduce firm numbers
and increase industry concentration.
Increased price information would also tend to broaden the geo
graphic scope of retail markets. Consumers operating with inadequate
price information are likely to place relatively more emphasis in choos
ing a retail store on non-price factors such as store location, services,
and product quality or variety. Improved price information from a cred
ible source would tend to increase the emphasis placed on price by buy
ers and hence expand the number of sellers which buyers would consider
patronizing. This would reduce the opportunities for spatial monopolies
and price discrimination. By expanding the size of relevant markets,
increased price information would tend to decrease market concentration.
This would be a counter force to the decline in firm numbers mentioned
above.
The effect of price information on product or enterprise differenti ation is difficult to asBesB. Since enterprise differentiation, as we will use the term, refers to the perceived differences in the nonprice characteristics of competing firms, increased price information would appear to have little influence. Price information would allow buyers to more accurately express their perceived value of enterprise differ entiation, however.' Further, to the extent that a credible source of price information reduced the reliance of consumers on company sponsored advertisements, the result could be a decline in perceived enterprise differentiation. This is far from clear, however. Increased price information could stimulate nonprice advertising and promotional acti vities by companies which might lead to increased enterprise differenti ation.
Increased price information would be expected to affect the condi tions of entry into a market. A credible source of price information should make entry by superior firms easier. The advertising advantages of large established firms would be reduced since the advertising which new entrants would find it necessary to conduct would be less expensive than in the absence of a credible source of price information.
Entry by inferior firms would be more difficult, however, in an environment of adequate price information. Buyers would be able to accurately assess the price differences of such firms, and by our ear lier definition of an inferior firm, would choose to not patronize an inferior new entrant.
Increased price information would also assist potential entrants in evaluating the profit opportunities in a market. This would tend to improve market entry decision by encouraging entry where monopoly pro fits are present and discouraging entry where they are not.
Increased price information would also tend to increase the sensi tivity of established firms to entry forestalling prices. That is, in those markets where oligopolistic interdependence is so high that tacit collusion and joint profit maximization is likely, a credible source of price information would encourage the established firms to avoid new entrants by pricing at the entry forestalling level. If the latter ’ price level is below the joint profit maximizing price level, price in formation would serve as a restraint on price levels. 24
Although Increased price Information would likely Influence the structure of markets In conflicting directions, on balance it appears that market concentration might be changed little. The expanded size of markets may be an offsetting factor to the reduction in flvm numbers.
In addition, increased price information would be expected to reduce the barriers to new firm entry. Lower entry barriers would not neces sarily lead to increased entry and hence to decreased market concentra tion. However, it would reduce the level of monopoly power in a market and hence the extent to which monopoly prices and profits are likely to exist. This would probably be the most important structural effect of increased price information, particularly in the case where market ig norance was a source of market power.
Effect of Information on Market Conduct
At the present time, buyer information and seller conduct in food retailing-conBumer markets appears to be interdependent. Nelson &
Preston found that retail firmB make frequent price changes that are not fully explainable by changes in costs or weekly specials. They indicate:
"The intensity and diversity in both the number and the magnitude of observed price changes cannot be understood either as response to short-run changes in supplier level costs and retail demand or a "price war" foray. The phenonmenon is sufficiently distinct to merit a name — variable price merchandising. The interpretation which best fits these data is not one of cost or item demand responsiveness, but one of programmed price variation....This variation differs from simple price cutting because it involves systematic raising as well as lowering of prices...The logic of variable price merchandising only requires that profit derived from the services of the Btore be greater than it would be otherwise." (17, p. 184)
A strategy of frequent price changes makes price comparisons 25 across firms more difficult and is likely to discourage consumer search.
The leirel of price information held by consumers is likely to suffer as a result. Inaccurate price dispersions would thus be more probable.
Rothschild (20, p. 1228) asserts that expected market conduct under oligopolistic conditions of imperfect knowledge will depend extensively • on thJ intentions of the seller i.e. does he appreciate the relative ignorance in the market and more important does he proceed to exploit it? A strategy of continual price changing may be a profitable offen sive strategy. Alternatively, if the Beller appreciates the market is complex and relatively uninformed he may be forced into a defensive guessing game whereby frequent price changes are a necessary hedge against being wrong in the determination of his demand function. Fre quent price changes are consistent with either strategy.
Firms which employ price changes in an offensive way to confuse customers would be expected to be higher in price than their competi tors. (If they were lower in price, they would want customers to rec ognize: that fact.) If price changes are employed for defensive reasons, however, no logical relationship would be expected between the frequency of price changes and the price level of stores.— ^
Retail firms can cause consumers to rely more heavily on nonprice factors by employing practices which confound price comparisons. How-
T T ~ Nelson (17) found a negative relationship between the frequency of price changes and store price levels. Devine and Hawkins (9) however discovered a positive relationship between instore price variation (a measure of both frequency and magnitude of price change) and store price level. 26 ever, given a high level of consumer ignorance about prices, firms may find that they must largely depend upon nonprice competition to differ entiate themselves. Consumer Ignorance can cut both ways.
In view of the complex product characteristics evident in food retailing the opportunity for price dispersion may be relatively high.
A critical question however is to determine which way the dispersion of quoted prices may be skewed, if at all.
Stigler (25, p. 214) asserts:
the frequency distributions of asking prices have not been studied sufficiently to support any hypothesis as to their nature. Asking prices are probably skewed to the right, as a rule, because the seller of reproduciable goods will have some minimum but no maximum limit on the price he can accept.
Stigler offers some justification for the view that inexperienced buyers (tourists) pay higher prices in a market than do experienced buyers. If the variance of the expected minimum price Increases as search declines, then one would expect a wide dispersion of prices at relatively high levels in a market characterized by low accumulated search. In other words, the only way tourists or the ill Informed can pay more is that some sellers muBt continually offer a skewed disper sion of prices.
Under "normal" environmental conditions who is likely to know more about prices and what are. the consequences in terms of market price levels? Rhodes et el (19, p. 105) report:
Ground beef merchandising was found to be an excellent example of a type of price discrimination in an uninformed market. A high level of consumer knowledge about ground beef content would presumably eliminate the profitability of this retail merchandising practice and would increase pricing efficiency in this market. 27
The above examination of comparative price levels found theoreti
cal support In the writings of Scltovsky (23, p. 447). Scitovsky argued
that It is frequently profitable for merchants In uninformed markets to
engage in a type of price discrimination whereby a set of quality vari ations of a product are merchandised which have differences in prices
"out of proportion to differences In- quality"M
One of the Important results of Increased information in an under
informed market would be the shift In competitive emphasis. If price
information is poor and perceived differences between stores is slight, consumers will rely heavily on nonprice factors (store location, clean liness, product selection, customer service, etc.) in selecting a store
to shop. Increased price information would be expected to reverse this phenomena — at least until prices reach a new equilibrium in which the _ price differences between stores are accurate reflections of the per- i ceived value differences in the product service packages. Consider the following example.
Firms A and B in Figure 1 represent two rather typical firms found in many metropolitan markets. Firm A is a local chain or group of vol untary independents which tend to emphasize customer service, product selection — i.e., nonprice factors. Firm B is a division of a national chain and relies much more heavily on price to attract customers. For
17 “ One consideration that would seem to support the notion that im proved consumer knowledge would reduce market prices is inflation. Firms are currently under considerable pressure to raise prices because of cost increases. In short, they have to raise prices to cover costs or suffer brankruptcy. As a hedge against this latter possibility it is conceivable that prices in a poorly informed environment would tend to be higher than may be allowed under a more perfectly informed con sumer environment. 28
Che purposes of this comparison, the cost curves of the two firms will
be assumed equal.
Figure 1
Firm Behavior
B1 Al
A2
A3 B2
MC A2
Al
S, S.
(a) Under conditions of poor consumer information, Firm A may find its customers are relatively insensitive to price changes; its demand curve, D ^ , is perceived as relatively inelastic. The same 1b true to a lesser extent for Firm B. If both firms operate so as to maximize profltB, they will operate at and Sfll and at price levels and P^. The spread of the prices between the two firms is therefore P ^ - Pfll. With the Introduction of the Increased price Information, Firm A is likely to find that consumers now place more emphasis on price in choosing stores. In order to maintain his sales at S ^ , Firm A will have to drop prices to P^* He perceives that his demand curve has 29 shifted to D ^ * With the new demand curve* Firm A's profit maximizing output shifts to at price P ^ . A similar sequence of events affects Firm B. The result is a lower level and narrower spread of prices (P^j - P ^ ) between the two firms. While the new equilibrium could lead to an Increased spread in prices between flrmB* this seems unlikely if consumers operating with poor price information tend to place less emphasis on price* and if re tailers are sensitive to this fact. Under these conditions* at least some firms in the market would be expected to be similar to Firm A. An Interesting extension of the above proposition 1b that the po tential for a price decline subsequent to improved information may Increase as the individual demand curve becomes more inelastic. How ever there are two opposing forces at play; one* Increased information may improve the firms potential to collude and thus generate an equi librium solution near P111* two, the increasing elasticity of demand pro vides an increased incentive for individual firms to lower priceB and break the cartel. If the market demand curve does become more elastic the profit maximizing price level does decline for all market structures. Since increased price information would expose the firm behavior to greater scrutiny* companies might respond by increasing the diffi culty of making valid comparisons. Coupons, promotional games and premiums* and other tactics which make the offers of competing firms more difficult to compare would likely increase. To some extent, such efforts can be viewed as attempts to Insert static into the information being received by buyers. At the same time* however, blatant attempts to confuse consumers 30 by manipulating prices up and down would be easier to detect and might therefore be decreased. In addition, with increased public knowledge and surveillance of pricing behavior, retailers might be more hesitant to make price increases that are not justified by cost increases. Dur ing an inflationary period, this may tend to slow the speed with which price increases are made. The foregoing indicate some of the more plausible behavioral ef fects of increased price Information. We will now examine the influence * of information on market performance, the third major component of industrial organization theory. Effect of Information on Market Performance Appraising the effects of different levels of information on mar ket performance is extremely difficult, both theoretically and empiri cally. In thiB section, we will examine the effect of price informa tion on several dimensions of market performance; pricing efficiency, operational efficiency, and consumer satisfaction. Pricing efficiency - To be efficient in performing the resource allo cation task, prices must accurately reflect both producer costs and buyer preferences. In markets with inadequate price information, consumers would be unable to accurately judge the differences in costs for the product-Bervice offers of different firmB, and hence to ac curately express their preferences. In such a situation, prices dis persions would be expected which Inaccurately reflect seller costs and buyer preferences. Increasing the level of price Information would be expected to increase pricing efficiency — at leaBt from the 31 standpoint of the dispersion or distribution of prices across firms. The effect of Increased information on average price levels — another dimension of pricing efficiency — is less apparent. Earlier discussions in this chapter Indicated that price information would tend to reduce entry barriers and stimulate price competition, at least in the short run. Both of these factors may tend to depress the level of prices but under oligopolistic conditions we cannot be sure. In a highly concentrated market, increased price information may reduce the level of prices, reduce excess profits, and increase pricing efficiency, at least in the short run. In a market that is effectively competitive and which realizes normal profits, Increased price information might also stimulate lower prices and profits in the short run. However, if prices are driven below marginal costd, pricing efficiency would be Impaired. The long run consequences of Increased price information are uncertain and depend upon the effects of information.on operating costs and the competitiveness of the market. We will now turn our attention to operational efficiency. Operational efficiency - Operational or cost efficiency would not be directly Influenced by increased price information. However, given the characteristics of food retailing, we hypothesize that information will indirectly effect store operating costs. The National Commission on Food Marketing analyzed the operating costs of several thousand retail food stores. The results of one of their analyses are shown in Figure 2. The Commission found that store 32 costs were much more affected by store utilization (measured by sales per square foot of selling area) then by absolute store size. They Figure 2 - Retail Food Store Cost Functions, National Commission on Food Marketing Study Stor* b p tn M j» ■ Ptrctni et S ain - . 7 6 16 ■*11,182 - $2.26 12 Firm A 4.000 »q. f t *,000 m. ft. \ 12,000 iq .lt \ \ I (,000 iq. ft. 8 ,APC PB t I V t v III III 4,000 8,0 0 0 12,000 16,000 Squir* r«tl of Sailing Araa also found that most retail stores operate considerably short of the point of minimum average costs* For example, the sample of stores from which Figure 2 was developed averaged $2.82 In saleB per square foot per week, whereas minimum average costs were computed to occur at $4.50 per square foot.— ^ These findings suggest an "over stored" condition in food retailing. We hypothesize that this condition could V The minimum cost point on Figure 2 may be understated since there were few observations beyond the minimum cost point. Some industry representatives contend that average costs continue to decrease slowly over a substantial range. 33 persist because of the lack of effective price competition which could drive some stores out of business and allow the survivors to operate closer to minimum average costs. If the market is highly concentrated however reducing the number of firms may just result In Increased mono poly profits, that Is lower costs but Increased prices. ■ ■ In estimating the effect of increased price information on store costs, several plausible assumptions are made. First, it is assumed that the retail operators In a market have different cost curves and vary in their ability to appeal to consumers. That is, there are good and poor operators in every market. Consumers recognize this, at least to some extent. As a result, the poor operators have low sales per square foot compared to the better operators. This Is shown on Figure 2. Firm A, the poor operator, realises 2.50 In sales per square foot while Firm B realizes 3.50 per square foot. Biased upon NCFM findings, if Firm A could Increase its sales to 3.50 per square foot (a 40% increase), costs would drop two percentage points. A third firm, Firm C, is also assumed to exist. Firm C has a higher cost curve than Firm B due to increased services, but is equally well accepted by consumers since it also realizes sales of 3.50 per square foot. Figure 3 indicates that the three firms would have to charge prices P , P. and P to cover their costs. In thiB case, we a b c assume that the difference between P. and P approximates the differ- o c ence in the perceived value of the product-service packages of the two stores, and hence would persist even under full information. The dif ference between P and the other two prices, however, is assumed to be due to the higher costs of an inferior firm. Firm A survives because 34 of Ignorance in the market. Increased price information in this hypothetical market would probably put Firm A out of business (unless he responded with lower prices) and shift patronage to Firms B and C. These two firms would then operate farther out on their cost curves, resulting in increased operational efficiency. This example can be further amplified by expanding on the shift in individual firm demand curves that we earlier hypothesized would occur with increased price information. Under conditions of poor information, all firms would perceive demand curves that are relatively insensitive to minor changes in prices. With Increased, price Infor mation, Firm A in Figure 2 would Immediately find that its demand curve has become more elastic (see Firm A in Figure 1 for graphic presentation). At the same price, sales would drop for its inferior product. Firms B and C would realize an increase in sales, and per ceive that their demand curves have shifted to the right. If these firms experiment any with prices, they too would likely find that consumers are now more sensitive to price changes; their demand curves have become more elastic. If, as assumed above, Firm A is driven out of business, the de mand shifts for Firms B and C would presist until the competitive conditions changed. Since the marginal cost curves of these firms are unaffected, the shift in demand would lead to higher output by Firms B and C. The effect on prices is less clear and depends upon the nature of the demand shift and the effectiveness of competition. In those markets where competition is effective, prices would be ex pected to parallel costs, If this were true In the above example, the level and dispersion of prices would decline both in the short run and long run. If competition is not effective, however, the effect of price information on the level of prices is uncertain. If collusion - tacit or otherwise - is more difficult to sustain when firms face an elastic demand curve than when they face an inelastic demand curve, then the demand shift triggered by increased information might also lead to a drop in prices in markets with high interdepend ence. Notwithstanding the uncertainty associated with oligopoly solu tion, the dispersion of prices would decline with increased price in formation in the situation presented in Figure 2 regardless of the competitive conditions. The above example is hypothetical. However, the characteristics of the food retailing-consumer market suggest that it may be a realis tic model of the effects of increased price information. It will be relied upon as the most realistic model of the effects of increased price information on market structure and conduct for the study situ ation. Consumer satisfaction - The level of consumer satisfaction provides one measure of what Henderson has called "allocative accuracy" (13, p. 10). While conceptually similar to pricing efficiency in the sense that it is concerned with the "goodness" with which resources are allocated to produce alternative products, allocative accuracy explicitly recognises that other mechanisms besides prices are often involved in allocation decisions due to a variety of market failures. In addition, the Theory 36 of the Second Best suggests that the norm for pricing efficiency, P-MC, is an unworkable criteria for part of the economy if other parts un avoidably deviate from the P-MC condition. Allocative accuracy is an alternative approach which attempts to avoid this criteria. Allocative accuracy refers to the extent to which demand prefer ences and Bupply offerings match in terms of the quantity, quality and price of products, and the location and timing of production and mar keting. In part, it depends upon the extent to which prices accurately reflect demand preferences and approximate average costs In the long run, and in part on nonprice coordinating mechanisms such as contracts, vertical integration and government programs. While Marion and Handy do not use the term, allocative accuracy, they are clearly dealing with the same dimension of market performance in proposing direct measures of consumer satisfaction. (16, p. 97-99) They contend that the price mechanism may not be effective in allocat ing resources if preferred offerings are not presented in the market place, or if some prices are hidden. Indirect services such as thoBe associated with the act of exchange are seldom priced; their costs are hidden in the price of the goods. Buyers are therefore unaware of the cost of such services and are unable to vote for or against them. In such situations, prices alone may not perform the resource allocative task. The above provides the rationale for direct measures of consumer satisfaction, or of the degree of "match" between actual supply offer ings and the preference schedules of consumers. It is Important to recognize, however, that measures of consumer satsifactlon are consumer 37 perceptions of allocative accuracy. Increased price information will not necessarily affect allocative accuracy and consumers' perception of allocative accuracy in the same way.— ^ Increased price information is likely to affect consumer satisfac tion both directly and indirectly. The direct effect should include a reduction in the search time of individual consumers and a reduction in the uncertaintities surrounding store selection decisions. These changes would be expected to enhance consumer satisfaction. Price information may also have negative direct effects on consumer satisfaction if it reveals that consumers are being exploited by retail ers. Consumer satisfaction with retail performance would likely drop initially and gradually increase if performance Improved. Information may also affect consumer satisfaction indirectly via its impact on market behavior. As has been previously indicated, how ever, this is partially dependent upon the nature of the market prior to Improved information. Prediction is therefore difficult. U Operationalizing this notion poses several problems both in measure ment and interpretation. Stout and Doehler (27, p. 38-39) present the following example: "Case A Range of Preferences 1 2 3456789 Range of Conduct 111111111 Case B Range of Preferences 111111111 Range of Conduct 123456789 The resultant variation In Performance (allocative accuracy) would be the same in either case. But would the deBired corrections be the same; the policy proposals as easily rendered either way? Much, it seems, would depend on the vantage point of the disciplinary definition, on the urgencies of efficiency or on the credibility of either buyer and seller conduct rationale." Since increased price Information will allow consumers to more accurately reveal their preferences through their store selection deci sions , allocative accuracy would tend to be improved. At least in the long run, this should improve consumer satisfaction. The expected im pact of price information on the level of prices is less clear, although the discussion in this chapter lends modest support to a drop in prices. This would also be expected to increase consumer satisfaction unless preferred services or product quality are sacrificed in the process. Thus, while price information may result in a short term drop in con sumer satisfaction, over time, consumer satisfaction would be expected to increase. Care must be exercised in interpreting changes in individual performance dimensions. An increase in consumer satisfaction, for ex ample, in itself is not sufficient to suggest that the market has im proved. We could give away food and consumers may be extremely happy but market performance would be unsatisfactory, in fact a market as such would not exist. Similarly, prices could decline but consumers could be less satisfied because quality may have deteriorated even more. Thus, in evaluating changes in market performance it is important to examine the various factors which contribute to performance. Time would also seem to play a critical role in the evaluation of performance. For example, in the theory of perfect markets adjustments are instantaneous; thus only price movements in the direction of costs are considered efficient. But, in imperfect markets, improved informa tion may legitimately widen the dispersion of prices in the short run and raise the average market price level because consumers can more 39 accurately reveal their preferences for alternative, previously unknown, market offerings. Although monopoly profits may flow to those firms offering the desired product during this adjustment period, in the longer run other firms can Increase the supply of the desired products, decrease the dispersion of quoted prices, and reduce the price level while more effectively meeting the demand of consumers. Thus, in imperfect markets apparent inefficient pricing patterns may just be short run reactions to either changing revealed preferences or changes in technology and costs. Study Hypotheses Food retailing in the test market is highly concentrated with the four largest firms accounting for about 90 percent of all grocery stores sales. Substantial barriers to the entry of new food chains are likely to exist. Given these structural characteristics, the potential for excess profit levels by the established firms would be expected to be high. In view of the nature of the study market and the foregoing theore tical discussion, the following hypotheses are defined. They will be subsequently tested in Chapter IV and V. 1. Individual retail food outlets, whether chain or Independent, will reflect significant differences in weighted price levels before the dissemination of comparative price information. 2. The public dissemination of market Information on comparative price offerings will reduce the dispersion of prices across stores, decrease the price variation within stores, and lower the average price level In the market. 3. Higher priced stores will have more volatile prices as measured by the degree of in-store price variation. 4. The "underpriviledged" areas of the market will have higher priced stores than the more "affluent" areas, 5. Levels of consumer satisfaction with products, stores, and their attributes will reflect significant differences across various demographic backgrounds. 6. Consumers who reveal a relatively high need for additional information will be significantly less satisfied with market conduct and performance than those consumers that Indicate a low need for additional information. 7. Consumers who receive information on comparative price offer ings will reflect significantly higher levels of satisfaction with food products and stores than consumers who do not receive information. 8. The perceived value of comparative price information will be significantly different across various demographic backgrounds. Welfare Measures Scherer summarizes the case of welfare losses due to deficiencies in the market performance in the following manner: One adverse consequence of monopoly, the theory of welfare econo mies instructs, is the mlsallocatlon of resources. By raising the price above marginal cost, monopolists restrict output, divert resources to less pressing demands, and reduce consumer welfare. There is considerable evidence to support the assertion that prices are held above costs when monopoly power exists. Statistical studies by Bain, Weiss, Comonor, Wilson, and others reveal that profit returns 41 on a stockholder Investment In manufacturing industries tend, except during wartime and the boom stages of postwar recovery, to be about half again as high when market concentration and/or expenditures on advertising are higher than when they are not. Higher profits in turn imply higher prices and restricted output. (21, p. 400) If prices change and resources are reallocated as a consequence, then changes in social welfare have occurred. To examine the affects of price changes in the retail food market, assumptions about the nature of cost and supply curves are necessary. Because ours is a short run experiment and because both the long run average and long run marginal cost curves of food retailers may be relatively flat over a wide range of output, the LRA and LRM cost curves in figure 3 are assumed to be horizontal. Figure 3 Welfare Effects $ Pm LRC Pe QcQm Q 42 If Pm 1b the price level before the introduction of additional price information and Pe is the price level afterwards, the net change in economic surplus may be described in the following manner. The gain in consumer surplus is given by the area PM B E Pe, the loss to retailers (producer profits) is the area Pm B A Pe, and thus the net welfare gain, assuming producers and consumers have the same marginal utility of income, is the area ABE^{ Note this evaluation assumes no change in cost curves or operational efficiency on the part of sellers. Alternatively, if firms were assumed to operate inefficiently, because of their limited capacity to accurately define demand functions in a complex-uninformed market or because they were forced to employ extensive (and expensive) nonprice advertising, then improved price Information could reduce the need for price variations and nonprice advertising and thus lower their average and marginal cost curves. Under this assumption Schmitz and Seckler (22) estimate the net welfare gain to society to be the area Pm B E Pe in figure 3. No loss in pro ducer surplus will occur because if supply is completely elastic pro ducer surplus does not exist. At a minimum producers are no worse off because although prices are lower so are costs. T7------Currie et al. (8, p. 749) state that the ordinary demand curve may result in a biased measure of consumer surplus if the income effect of a price change is large. The sign of the Income effect determines the direction of the bias. For example, for a decrease in the price of a "normal" good the income compensated demand curve will be somewhat to the left of the ordinary demand curve and the resulting measure of con sumer surplus associated with the ordinary demand curve will exceed the corresponding measure (compensated variation) based-on the income com pensated demand curve. Consumers in developed economies that consis tently spend less than 20 percent of their total income on retail food are not expected to significantly change expenditures on food as their income changes. The increase in Income is expected to flow to other commodities. 43 A final consideration examines the theoretical possibility of a net welfare loss resulting from a price decline. If Pm B represents the LR cost functions for firms at market equilibrium then a reduction in price to Pe generates a net loss to producers of Pm C E Pe, a net gain to consumers of Pm B E Pe and net Io s b to society of BCE. Prices will have to increase or production will eventually be terminated. Measuring consumers' perceived benefits attributed to the dis semination of price information is similar to the above analysis but more difficult. Public information exhibits many of the characteris tics of a public good (or a nonpriced resource)...its value is not determined by traditional market arrangements..it isn't traded, It is simply provided.— ^ Several estimation models have been advanced in the literature regarding nonpriced resources. (See Brown (5) and Pearse (18) for example.) Briefly, in the absence of usual market Indicators of value, the solution lies in estimating the demand for the resource from in direct evidence and to measure how much consumers would be prepared to pay to maintain the facilities or what they might have to be paid (or bribed) not to use the facilities. An analysis applicable to this research was employed by Brown (5). He took a direct approach by asking consumers through a questionnaire what their reaction would be to variations in quantity (and quality) of the resource. He generated a compensated demand curve as a measure 1/ Although some food price information is traded through advertising media, the public provision of additional price information has near zero marginal cost to the consumer. 44 of economic surplus. Consumers' surplus was measured directly by ask ing the appropriate questions related to these variables, (see Appendix D-2) By asking the consumer how high the price of the added information would have to be before it would be too expensive to purchase, a value is generated that represents what it is worth to the consumer to move from some point to another on the compensated demand curve. In other words, the value represents how much the consumer would pay (reflect ing perceived economic benefit) for the information and still remain on the same indifference curve. A problem exists in aggregating across individuals the single consumer benefits derived from the Hicksian income compensated demand curve. Currie et al (p. 753) indicate that a sufficient but not neces sary condition for the aggregated compensated demand curve to coincide with the market demand curve is for each individual to have a zero income elasticity of demand for the commodity. Alternatively, an aggregate utility function may be approximated if individual utility functions are assumed homogeneous and if each Individual's share of the total income remains constant. In general, a measure of aggregate benefits derived from the con cept of economic surplus may be a crude approximation of welfare change given the necessary assumptions required for the transition. CHAPTER III RESEARCH DESIGN Overview To satisfy the objectives of the project the research design took on several dimensions. Specific consideration was given to: (1) the choice of markets, (2) the composition of food baskets to be priced, (3) the education and employment of price monitors, (4) the choice of food retailing firms to be observed, (5) the adequacy and accuracy of samples drawn among consumers in the control and test markets, (6) the design of an adequate questionnaire to measure con sumer perceptions of market performance, (7) the design of a price index, (8) the preteBt-post test format for examining temporal changes in market behavior, and (9) the timing and specific form of the public information going into the market. Some of these considerations bene fit from elaboration in paragraphs which follow. The Pretest-Post Test Control Group Design Experimental design refers to that portion of research in which variables are manipulated and their effects upon other variables are observed (7,p. 1). To adequately and accurately monitor the effects of publishing market information (retail price comparisons) on consumer perceptions over time, a certain degree of control over the environment is necessary to maintain internal and external validity. (Internal validity asks the question: Did in fact the experimental treatments make a difference? External validity asks: To what extent can the 45 46 effect be generalized?) (7, p. 5). The Pretest-Post Test Control Group Design adequately controls for internal validityThe design takes this form: Pretest Stimulus Post Test Test Market R 0^ 0, Control Market R 0, '3 4 where R represents random samples in both the teBt and control markets, 0^ and Og are pretest and post test observations respectively in the test markets, X is the market stimulus applied to the test market, and 0. and 0, are observations in the control market. 3 4 Relevant to Internal validity are eight different extraneous variables, which, if not controlled in the experimental design, might product effects confounded with the effect of the experimental stimu- V Campbell e£ a^. (9, p. 6) point out that history is controlled insofar as events that may have produced an 0.-0 difference. They note, however, that to completely control for specific intramission historical events would require continual randomization of experimental occasions to achieve balanced representation on all environmental fac tors. Maturation and testing are controlled because in theory they should be manifested equally in experimental and control groups. In strumentation is effectively controlled by using a fixed Instrument such as a questionnaire* Regression Is controlled as far a s mean dif ferences are concerned regardless of how extreme the grouj> Is on the pretest analysis, if both experimental and control groups are randomly assigned from this demographic pool. Selection is discounted as an explanation of the group differences because randomization has assured group equality at time R. Mortality may offer a plausible explanation of the 0.-0 gain versus the 0.-0. gain but, the extent that the mor tality may be caused by either the experimentation or by ^roup specific environment factors, can only be determined through continual experi mentation. Group interaction is largely controlled by the extensive separation of the control and test market areas. *7 lus (7, p. 5). (1) History is events occurring between the first and second measurement, i.e. changing conditions of supply, demand, costs and political policies, (2) Maturation iB the effects of time including growing older, more tired, more frustrated, etc., (3) Testing is the effects of taking a test upon the Bcores of a second test, (4) Instru mentation is the influence of changes in the design of the measuring instrument, (5) Statistical regression exists where groups are selected because of their extreme scores, (6) Selection is biases resulting in selecting different respondents for the comparisons of groups, (7) Experimental mortality is the differential loss of respondents from the comparison groups, and (8) Selection— Maturation interaction is where multi-group interaction may be mistaken for the effect of the experimental variable. Four factors influence external validity (1) The reactive or interaction effects of testing, where a pretest might increase or de crease the respondent's sensitivity to the experiment causing the results obtained for a pretested population to be unrepresentative of the effects of the stimulus on the untested universe, (2) The possible interaction of the effects of selection bias and the experimental vari able, (3) The reactive effects of experimental arrangements may pre clude generalization about the effect of the experiment upon people exposed to it in nonexperimental settings, and (4) Multlple-treatment inference— which may occur because the effects of prior treatments are not usually erasable. While the Pretest-Post Test Control Group Design is used in most cases, it is limited in its capacity to check for external validity. 48 In short, it is not possible to draw conclusions about consumer re sponses beyond those consumers in the sample that were subjected to the influence of the questionnaire. The Selection of Markets and Stores Two major cities were selected for analysis, Winnipeg, Manitoba, and Ottawa, Ontario. The cities were selected for several reasons. (1) Both metropolitan areas contained a relatively large share of both French and English speaking Canadians. Ottawa, the test market, is the national capital and contains both Quebec and Ontario residents within its limits. (2) Both cities have approximately the same popu lation, about 500,000 people. (3) The two cities have a relatively wide range of demographic characteristics within their respective populations. (4) The cities are geographically separated to a suf ficient extent that a market stimulus in the test market is not likely to influence conduct or performance in the control market. Census information from 1971 was obtained for each market. Popu lation densities per census tract were employed to determine the ap propriate size of sample to be drawn in each area of the city. Twenty-six major retail food stores were selected to be monitored in the Ottawa Market. Approximately 50 percent of the stores from each chain were monitored. The selection of stores included six IGA, six Dominions, six Steinbergs, four Loblaws, two A & P's, and two A. L. Raymond. Six stores were monitored in Winnipeg, the control market; one each of the following: A & P, Dominion, IGA, Loblaws, Safeway, and Co-op. The Market Basket A market basket was designed containing 65 food items. These items are shown in Appendix A. Several considerations impinged upon the final selection of the food products. The basket had to adequately represent the major food categories; that is, meat products, fresh fruits and vegetables, dairy products including eggs, canned fruits and vegetables, major beverages, and cooking materials like flour and sugar. To generate a food basket that would provide an adequate diet several nutritional constraints were considered bringing into the survey additional items like liver, raisins, and fish. The Price Index A weighted price index was employed in the study to take into consideration the different expenditures an average Canadian family would make on individual food items. The specific data were obtained from the Statistics Canada publication Average Family Food Expenditures Catalogue No. 62-531, 1969. (24) A value share weighted index was generated using the weekly dollar expenditures per item as the individual weighting factor. Using value share weights, a dollar equivalent 1b readily applicable for any item however the index is not invariant with respect to units. Items should be priced in equivalent units if possible. For example, if the average family spends 75 cents per week on hamburger and the price of hamburger is 89 cents per pound, the cor responding value share weighted index is .89 x .75 or .6675. Simi larly, if the average family spends 26 cents per week on oranges and 50 a dozen oranges Is priced at 99 cents the corresponding value share weighted index is .26 x .99 or 0.2574. Thus a commodity that accounts for higher consumer expenditures generates a higher index. In choosing the particular size of package to be priced it is appropriate to (1) attempt to price that size that is purchased most often by consumers and available in all stores, and (2) reduce poten tial index biases due to size differences by calculating the price per standard unit. Many of the less important items were not converted to one ounce measures because of their small value and because the potential bias in the index was recognized only after the index had been given to the public. The costs associated with adjusting the price index and re-educating the public were assumed to outweigh the potential benefits that may have been derived by adjusting the price comparisons. On comparison the value share and the quantity share indexes generated very similar rankings. See appendix J. (A value share weighted price index was employed rather than a quantity share weighted index because the family expenditure and consumption patterns were five years old. Over time, changing prices have a higher proba bility of altering quantities consumed than they have of changing the relative proportions of consumer expenditures. In other words, although the quantity of hamburger consumed may have declined from 1969 to 1974 because of higher hamburger prices, the percent of the consumers food budget spent on hamburger may have remained relatively constant.) Formulation of Price Variance Statistical price variances were calculated for each store and 51 for each week of the price survey. In each case the price variance was weighted to facilitate consistency In making comparisons with changes in the weighted price levels. Sample variance is defined in a general form as follows: N - 2 Var(P ) = 1 £ (P -P)z (1) x N i»l 1 where Var (P^) is a measure of the spread or dispersion of a distri bution; it Is the mean of the Bquared deviation of P^ from the mean, P. The magnitude, the direction, and over time, the frequency of price changes collectively determine the measure of in store price variation. The individual food prices monitored in the survey were weighted to generate a standardized measure of price variance within stores. The resulting sample variance is given by the following formula: V.r (Py) - S£af where f » items 1 “ stores j ■ weeks a ** the standardized value share weights; where the £ a. “ 1 P^j ■ weighted average Expanding equation (2) gives Var (Py) - l t a t ■ Vf Pij£2 - 2PU E£a£ PiJ£ + fl j S «> since Eaf - 1 and Efaf P ^ f ■ 52 (5) (6) The weighted mean of the in-store price variance divided each 65 item food basket into two distinct categories. Those items above the mean, approximately 22 of the 65, represented relatively high consumer expenditure items like meats, dairy products, and baking supplies. Items below the mean represented relatively low consumer expenditure items like, canned goods, spices, and beverages. By monitoring the change in sample variance (a measure of in-store price variation) and the weekly mean store price level, it was possible to determine how stores changed the price of the total basket i.e. if the high expendi ture items were treated any differently than the low expenditure items. Measurements of Consumer Satisfaction Indices of Consumer Satisfaction (ICS) can be constructed for overall satisfaction with a market basket of products or services, for individual product classes, meat for example, and for individual products like hamburger. (Marion and Handy p. 109). The overall ICS thus represents a set of subindices that can be computed for different groups of respondents, geographic regions, store characteristics and different combinations thereof, like the ICS levels for consumers who shop at one chain versus those who shop at another. Empirically, the data for ICS consist of scores, mean values that measure consumer satisfaction or frustration with a particular commo dity or service. Satisfaction is measured on a five point,scale 53 ranging from "always satisfied" (A) to "never satisfied" (E). The letters A to E are given values one through five respectively. For example, assume individuals are surveyed regarding their sat isfaction with the product hamburger. The Index of Consumer Satis faction for any single product, k, is thus computed by: N ICSk - 1 2 P N i»l where P^ is the satisfaction scale, i»l, 2...N observations, and k designates the product. If the respective indicated degrees of satis faction were given by letters "A", "B", "D", and "E" on a five point scale the resulting ICS score for beef would be: 4 ICS “ h 2 (1 + 2 + 4 + 5) = 2.75 n i-1 The index can be computed for product class, for subsets of samples based on various socio-economic criteria, for satisfaction levels of consumers associated with particular stores, or for the overall market satisfaction ratings. The higher the index value the more dissatisfied are consumers. For this reason the ICS can actually be regarded as an index of dis satisfaction and in fact is labelled Mean Dissatisfaction Score (M.D.S.) in subsequent analysis. Collection and Dissemination Of Price Information Prices in stores were collected each week on either Thursday, Friday, or Saturday. This timing allowed prices to be monitored after 54 advertisements were published in the local newspapers Wednesday even ings. Prices were checked, key-punched, an analysed at the end of each week. From May 15, 1974. food prices were monitored continually each week for seven months. On Thursday, September 19, 1974, the first in a series of weekly price comparisons was published (made available to the media and consumers) in the Ottawa-Hull market. The published price comparisons were for the week ending September 14. A three- week history of store rankings was also provided to put store perform ance in perspective, (Tables 1 and 2). Since the prices in effect for one week were published the follow ing Thursday, retailers could not adjust their prices until the week after publication. Thus, retailer response to the comparison of prices in effect during the week of September 14 were not evident until the week ending September 28. Table 1 and 2 provide an example of the kind of information that was published. The store rankings were delineated into major geo graphic areas of the market to aid consumers in identifying with local market conditions. A complete list of the weekly presB releases and a summary of pre- and post-test store ranking positions 1b given in Appendix C. Similar publications were made for five consecutive weeks, from September 21 to October 19. On October 23 the Food Price Review Board announced the termination of the publication of store price comparisons. Store price movements were monitored for an additional i TABLE 1 An Example of the Press Release on Store Price Comparisons Ottawa-Hull, September, 1974 The following Is a comparison of weighted price levels between retail food stores in the Ottawa-Hull area during the week ending September 14, 1974. A three-week history of positions is also included. Weighted Price Index Rank Rank Rank Rank Ottawa West S e p .14 Sep.14 Sep. 7 Aug.31 A u g .24 Steinbergs 2148 Carling 58.35 1 3 5 7 Dominion Carling & Kirkwood 59.06 2 5 3 2 Steinbergs 1611 Merivale Rd. 59.09 3 6 4 8 Dominion 1653 Merivale Rd. 59.20 4 4 1 5 Steinbergs 100 Bayshore 59.28 5 1 6 4 Dominion 1224 Welington 59.40 6 2 2 1 I.G.A. Richmond & Carleton 61.37 7 9 9 10 Loblaws Carlingwood Mall 62.07 8 8 7 3 Loblaws 1980 Baseline Rd. 63.08 9 7 8 9 A & P 1855 Carling Ave. 64.05 10 10 10 6 Ottawa South Dominion 1582 Bank 58.89 1 1 1 1 Loblaws 1681 Alta Vista 61.37 2 4 4 2 I.G.A. Bank & Walkley Rd. 61.90 3 2 5 3 A & P 1525 Bank St. So. 62.69 4 3 3 5 Independent Bank & Somerset 63.23 5 5 2 4 Ottawa East Steinbergs ' St. Laurent Blvd/Mtl. 56.25- 1 2 2 3 Steinbergs 1944 St. Laurent Blvd. 58.83 2 1 3 4 Dominion St. Laurent Shop Ctr. 59.54 3 4 1 1 Loblaws St. Laurent Blvd/Mtd. 60.88 4 3 5 2 I.G.A. Beachwood Ave. 62.13 5 5 4 5 (Continued.... ) Table 1 (Continued) Weighted Price Index Rank Rank Rank Rank Gatineau-Hull S e p .14 S ep.14 S e p .7 Aug.31 Aug.24 Dominion St. Joseph Blvd.Hull 57.71 1 1 1 Steinbergs St. Joseph Blvd.Hull 59.84 2 2 1 A.I.Raymond 210 Champlain Hull 61.76 4 4 3 A.L.Raymond Maloney Blvd.Gatineau 62.05 3 3 2 I.G.A. Maloney Blvd.Gatineau 62.49 5 5 5 I.G.A. Tache Blvd.Hull 66.30 Q\ Ui -C* CO H Is) 6 6 6 Source: Food Price Review Board Survey, 1974. Ul 9 TABLE 2 57 An Example of the Press Release on Produce Price Comparisons Ottawa-Hull, September, 1974 The following sample of some of the Items being examined pro vides a comparison between retail chains and groups of stores In the Ottawa-Hull area during the week ending September 14. i lowest average price the next lowest Is listed number two, etc. 'ION DURING WEEK ENDING SEP.H A&P DOMIGA LOBRAY STB Round steak, boneless 1 lb. 6 1 5 4 3 2 Prime Rib Roast (Standing), 1 lb. 5 4 3 1 2 6 Ground Beef or Hamburger, 1 lb. 5 1 4 2 3 2 Beef Liver, 1 lb. 3 1 * 2 2 4 2 Pork Sausage, fresh, 1 lb. 5 3 1 6 4 2 Bacon, private label, 1 lb. 3 2 3 5 4 1 Bologna, Maple Leaf or T.P.L.*, 1 lb. 2 2 4 3 3 1 Weiners, 1 lb. Maple Leaf or T.P.L. 2 3 4 5 6 1 Chicken (2-4 lb.) Whole Grade A 3 2 5 4 1 4 Turkey (8-16 lb.) Grade A 2 3 3 1 4 2 Eggs, Grade A medium 5 1 6 2 4 3 Butter, T.P.L. 1 5 3 3 4 2 Milk Cheddar Cheeze - Private Label 1 3 5 3 2 4 Milk, Homogenized 25, (2 qts.) 4 3 2 4 1 3 Margarine, 3 lbs. Blue Bonnett or T.P.L. 5 2 1 6 3 4 Ice Cream gal. Borden (Vanilla) or T.P.L. 2 1 6 5 4 3 Tomato Juice, 48 oz. Heinz, or T.P.L. 4 2 2 3 1 2 Potatoes, fresh, 10 lbs. Canada No.l 3 4 3 6 5 1 Tomatoes, fresh 4 tom. Canada No.l 2 2 1 2 2 2 Tea, 60 bag pkg., T.P.L. 2 4 6 3 5 1 Coffee, 1 lb. Nabob or T.P.L. 2 4 5 3 1 4 Instant Chocolate 2 lb. Nestle's Quick 2 1 2 1 2 1 Peanut Butter 2 lb. jar Kraft or T.P.L.- 3 2 2 2 2 1 Corn Oil 32 oz. Mazola or T.P.L. 4 1 4 2 2 3 Sugar 10 lb. T.P.L. 6 2 5 4 3 1 Catchup 15 oz. Heinz or T.P.L. 2 1 1 2 2 1 Flour 10 lb. Robin Hood 1 1 4 2 3 2 Corn Flakes 12 oz. Kellogg's 2 2 4 1 5 2 Skim Milk Power 3 lbs. Carnation 1 1 2 3 2 2 Pork & Beans 14 oz. Llbbys or T.P.L. 2 1 3 3 2 1 Tomatoes, canned 19 oz. Aylmer or T.P.L. 2 2 1 3 3 2 Vegetable Soup 10 oz. Campbells or 2 1 3 1 2 2 * T.P.L. means Top Price Line Source: Food Price Review Board Survey, 1974. . 58 six weeks. (For a complete history of store rankings, see Appendix C.) The store price comparisons were published by three area news papers . . . two English and one French* A summary of the Information was also carried on radio and television* One half of the consumer sample In the test market also received the Information by direct mall during the five week publication period. The Consumer Questionnaire Two questionnaires were designed, one to pretest both markets and one to post test them after the dissemination of Information (stimulus) in the Ottawa-Hull test market. The post test questionnaire was an abbreviated form of the pretest questionnaire. For example it did not carry questions on demographics or as many detailed questions on product attributes as the Initial survey. The post test survey In the test market did have additional questions about the value of the price comparison information to consumers. (The questionnaires are present In Appendix D.) The initial questionnaire was designed with several specific objectives in mind: 1. to determine how satisfied or dissatisfied the consumer was with foods in general, specific food items, and with several specific food characteristics like taste, price, packaging, quality, etc. 2. to determine how satisfied or dissatisfied the consumer was with retail store prices and practices such as quality of advertisements, shelf and store arrangement, clarity of price markings, etc. 59 3. to determine the consumer's need for and ability to use market Information. The questionnaire also asked the consumer what types of information disseminating media would be helpful in aiding food purchase decision; i.e., radio, TV, direct mail, etc. 4. to determine both the demographic and shopping characteristics of the consumers answering the questionnaire. Prior to designing the final questionnaire, a telephone survey was undertaken in.the cities of Columbus and Ottawa. Approximately 150 consumers were telephoned in each city and asked to respond to several of the questions under considerstjion for use ia the question- i/ ! naire.— Besides identifying the general; level of dissatisfaction among and between consumers in the U.S. and Canada, the telephone response suggested several ways that questions could be re-worded to generate a clear, natural, unambiguous response by consumers* Sampling Procedure To Improve the response rate normally associated with a mail 1/ The basic format used in the questionnaire design was that employed by the U.S. Department of Agriculture in their national Survey of Con sumer Satisfaction. With helpful suggestions from Dr, Charles Handy of the U.S.D.A., the questionnaire waB reshaped and altered to best serve the research objectives. The questionnaire was originally de signed by the Economic Research Service, U.S. Department of Agriculture, together with Martin Pfaff, Professor of Economics, Wayne State Univer sity. For a more detailed discussion of this research, see series of papers on consumer satisfaction published in M. VenkateBan, ed., Pro ceedings of Association for Consumer Research - 1972, Iowa City: Association for Consumer Research Conference, University of Iowa, 1973; and U.S. Department of Agriculture, Economic Research Service, The Index of Consumer Satisfaction (ICS). Interim Report of Contract No. 12-17-05-1-610, unpublished report. 60 questionnaire and to simultaneously avoid the cost of personal deli- very and pick-up, a pre-mailing telephon t survey was employed to iden- tify consumers willing to participate in the study. A telephone direc- tory was obtained for each of the two ci ies including a telephone map indicating the specific areas associated with each telephone exchange (3 digit prefix). Corresponding populat .on densities were calculated for each of the telephone areas and a sample of consumers were drawn accordingly^ Questionnaires were sent to the 1,800 Ottawa consumers beginning the latter part of June and after a follow-up letter in mid-July the final response rate was higher than 60 percent; 1137 questionnaires had been completed and returned. Questionnaires were sent to 1,500 Winnipeg consumers in mid-July and 743 were returned by the first week in August. Both cities received the post test examination in November, 1974; 1,137 questionnaires wetre sent to Ottawa consumers and 753 to Winnipeg consumers, the response were 507 and 363 respec tively. Limitations of Th a Study Experimenting with the role of information resulted in several conceptual problems related to theory and to research design. Con- trolling external influences so that the effects of additional infor mation can be isolated is extremely difficult, particularly in the case of large population centers. While a control market was employed, I f Population densities were obtained from census tract data (24). 61 this did not preclude undetected external Influences from affecting consumer or seller behavior in either market. For example, to com pletely control for interim external events requires continual ran domization of experimental tests to achieve an unbiased representation under all possible environmental conditions. Although retail food prices were monitored weekly, the consumer surveys were limited to two testing occasions pre- and post-information situations. Similarly, the inferences that can be drawn about consumer be havior are limited on at least two accounts. Because a two group pre- test-post test design was employed rather than a four group pretest- post test design, the same people were examined in both the surveys. This sampling procedure generates additional inference limitations due to the reactive or interactive effects of testing. Because the extent to which the sampled consumers have been educated by the pre test survey is unknown, we are limited in our ability to generalize about the likely reactions of nonsampled consumers. An additional limiting factor is that strictly identical question naires were not used in the pretest and post test nor in both markets during the post test. The post test questionnaire was similar in for mat to the pretest survey. However, it was an abbreviated version and the test market consumers were asked some additional questions about the value of information while the control market consumers were not. Although one of the objectives of the research was to determine what consumers would pay for a specified information publication, the very question itself may have influenced the consumer response pattern. The market basket employed in price monitoring also presented 62 certain limitations. When each seller offers several thousand items at one time, a sample of less than 100 products provides a limited representation of complete pricing practices of stores. However, the test basket did represent 60 percent of family food expenditures away from home as calculated by Statistics Canada. Control for differences in quality across retail food outlets was limited in the research. Although similar brands and government grades were monitored in each store the quality of perishable products, Buch as meats and fresh produce, was not controlled. If firm A ’s government graded sirloin steak was of superior quality but equal in price to firm B's sirloin the consumer was left to make the quality distinction independently. However, emphasis on quality may have declined with increased price information. The Food Prices Review Board publically defended the price information program on the grounds that if prices did not reflect quality differences then either the grading system was inadequate or retailers themselves should be differentiating their productb on a quality basis if in fact comparative price differences were an unfair Indication of value. All nonprice characteristics, such as service, location, store layout, etc., were not publically compared but left to the consumer to individually evaluate. To the extent that these nonprice variables are significant in determining the quality of retail performance, the published information was inadequate. Consumers were cautioned, however, that the survey was limited to price comparisons and that consumer surveys were being conducted to better appreciate the value of nonprice characteristics. Because a selected sataple of retail stores was monitored, some stores were not included in the price comparison. Whether the published information penalized or benefitted nonparticipating retailers was not determined. If, for example, a relatively low priced nonmonitored store was categorized by consumers as high priced because of its affili ation with a high priced chain, it may have suffered an undue loss in sales volume simply by implication. This potential effect of a compara tive price information program needs to be examined. The impact of Increased Information in different market structures was not empirically examined in the study. Conclusions about the conduct and performance of retailers and consumers are thus limited to the existing conditions in the test market. A major limitation associated with the research is the length of the experiments. Conclusions about the market reaction to additional information are limited to the short run. The long run reactions of buyers and sellers to increased price information is open to conjecture. CHAPTER IV RETAIL PRICE BEHAVIOR This chapter is partitioned into six major sections: (1) Pretest Price Behavior - contains a description of pre-information prices move ments in the test market Including statistical price analysis, (2) Post Test Price Behavior - contains a description of prices in both the test and control markets subsequent to the provision of informa tion, (3) Examination of Major Implcations - pertains to statistical tests regarding post test price changes, (4) Review of Firms Strategies - deals with selected firm pricing patters, (5) Additional Findings - contains statistical tests regarding price changes in various market areas and in selected market food baskets and (6) Welfare Measures - outlines the operationalization of the concept of economic surplus and quantifies the corresponding value of a price decline. Pretest Price Behavior The first phase of the price analysis, from May to September, provided a representative indication of pricing strategies in the test market. The price index rose quickly prior to July 5, 1974, the date of the national election.— ^ The price index dropped after the J 1 7 Campaign platforms promising wage and price controls seemingly corresponded to a period of rapidly rising retail prices. 64 65 election results were released but then resumed Its upward movement reaching a "pre-information1' peak of 61.15 during the week of September 7 (Table 3 and Figure 4). Similarly, the price spread between individual stores and between groups of stores reached a peak just prior to the publication period. For the week ending on September 21, for example, there was over a 15 percent difference between the lowest and highest priced stores and about an 8 percent difference between low and high priced chains of affiliated outlets.— ^ The validity of the hypothesis that individual retail food outlets would reflect significant differences in weighted price levels was tested for the pre-information period using one way analysis of vari- 2/ ance.— The test statistic is given by: SSR/ (k-1) . SSE/ (n-k) " rk-l, n-k where represents the F distribution with (k-1) and (n-k) degrees of freedom. If the value of the above expression is not significantly different from zero, the sample offers no evidence that there is a difference between the group means. The examination was partitioned into two separate periods: pre- V The inflationary period may have contributed to the relatively wide dispersion between store offerings but may not justify its existence. l ! The analysis tested for significant differences between store price levels during the specified period but did not remove the effects of time. TABLE 3 Average Weekly Store Price Index Levels All Stores Ottava-Hull and Winnipeg Plus High-Low Extremes for Ottava-Hull, 1974. Ottawa-Hull By Firm Ottawa -Hull By Store Date Average Average Low High Price Price Chain Chain Index Index or or Percent Low High Percent Winn. Ottawa Group Group Difference Store Store Differem May 19 57.41 55.62 59.60 6.67 53.23 61.46 7.87 May 26 56.81 55.36 58.43 5.25 54.81 59.44 7.78 June 2 56.93 54.98 59.46 7.53 53.61 61.37 12.64 June 7 56.81 55.56 58.98 5.47 54.35 59.57 7.63 June 14 56.75 54.99 58.49 5.98 54.32 59.59 8.84 June 21 57.99 56.91 59.05 3.94 56.36 59.95 6.04 June 28 58.09 56.70 59.60 4.86 55.91 60.13 7.01 July 5 58.99 57.99 60.74 4.52 57.65 62.91 8.36 July 12 58.65 56.73 60.69 6.52 56.49 62.90 10.19 July 19 59.30 58.31 60.94 4.31 57.27 62.22 7.95 July 26 59.94 59.11 61.18 3.38 57.34 62.93 8.88 Aug 2 60.30 59.09 61.34 3.81 58.32 63.19 7.70 Aug 9 60.58 59.18 61.75 4.32 58.76 62.84 5.82 Aug 16 60.80 59.70 62.14 3.92 58.56 62.88 6.87 Aug 23 60.60 58.81 62.58 6.02 58.09 63.71 8.82 Aug 30 60.55 58.41 61.92 5.66 57.98 63.91 9.27 Sept 7 61.15 59.37 63.07 5.86 58.38 65.59 10.99 Sept 14* 59.67 60.74 58.61 62.90 6.96 57.71 66.30 12.95 Sept 21* 59.70 60.89 58.70 63.70 7.84 57.59 67.78 15.03 Sept 28* 59.17 59.96 58.57 61.69 5.05 58.24 63.42 8.16 Oct 5 * 59.73 58.12 56.61 59.83 5.38 55.98 60.73 7.82 Oct 12 * 59.73 58.37 56.42 59.01 4.38 56.37 59.58 5.38 Oct 19 59.29 58.29 57.18 59.37 3.68 55.60 60.93 8.74 Oct 26 59.31 58.22 57.13 59.66 4.24 55.24 60.33 8.43 Nov 2 59.35 56.85 55.17 58.72 6.04 54.17 59.87 9- 32 Nov 9 60.54 58.35 56.19 61.27 8.29 55.07 6.. 29 11. 53 Nov 23 61.78 61.85 60.86 62.79 3.07 59.97 63.77 5.95 Nov 30 62.57 61.77 59.50 63.39 6.36 58.79 63.89 7.98 Source: Food Prices Review Board Survey, 1974. * - Weeks for which Ottawa prices were published during the following week Figure 0 1 tawa Average Weighted Store Price Index Levels Chain 63.00 For Selected Supermarkets Ottawa-Hull and Winnipeg, 1974. • Winnipeg Weighted * Average Price Index Ottawa Average 61.00 60.00 Ot tawa Low Chain 58.00 Information Infor* 56.00 matlon Election Post Information "K afVpr 'ft n g a ra ju f >4 ju i g(P a/ Source; Food Prices Review Board Survey 1974, Table 5. 68 election, May 19 to June 28 and post election pre-information, July 5 to September 21. Statistically, the null and alternative hypotheses were stated as follows: HO: u. » u„ ■ ■ u ■L « n HA: HO is not true, where u. to u are the mean price levels l n for each store. For each selected interval of the pre-information period the null hypothesis was rejected. There were statistically significant dif ferences between store prices levels (See Table 4). A similar test was employed to determine if significant differ ences occurred between store groups during the pre-information period, May 19 to September 21. The results, presented in Table 5. revealed significant differences in price levels between groups of stores. Post Information Price Behavior The first opportunity retail food stores had to react to the in formation program was during the week of September 28,— ^ The aggregate price index dropped from 60.89 to 59.96, approximately 1.5 percent. This particular price reduction was larger in magnitude than any pre vious price decline during the pre-information period; however, it was not as large as some declines which followed. 17 Each publication advised consumers of retail price index conditions during the previous week. The September 19 publication, for example, referred to conditions during the week ending September 14. TABLE 4 Analysis of Variance of Retail Food Price Index Levels for All Stores & Selected Time Periods Ottawa-Hull, 1974 Time Period/ Mean Price Index Value F Hean Least Normalized Degrees Selected Stat. Price Range Percent Value Square Significant Variance^ of Index Low High Difference Difference* Freedom .05 .01 Level Level Pre Election Period Hay 19 26 to June 28 57.25 55.01 59.97 8.66 12.42* 14.86 1.15 1.52 2.12 162 Post Election Pre Information July 5 to 26 September 21 60.20 57.70 63.55 9.71 12.73* 22.07 1.05 1.39 1.83 297 Immediate Infor mation Period September 28 26 to October 26 58.59 57.40 61.98 7.83 2.18* 6.23 N.A. N.A. 1.24 108 Post Information Period October 26 26 to November 9 57.90 56.03 60.04 6.92 3.82* 6.63 1.85 2.45 1.65 81 Entire Survey Period Hay 19 26 to November 9 58.89 56.70 61.06 7.40 11.18* 38.64 1.01 1.33 1.48 675 ^ The values in each column represent the minimum difference between store price levels necessary for statistical significance at the .95 and .99 level of confidence respectively. 2 The normalized variance is generated by dividing the mean square by the appropriate number of weeks employed in that particular ANOVA calculation. ^ vO * significant at the .99 level of confidence* TABLE 5 Analysis of Variance of Retail Food Price Indices For Selected Store Affiliations and Selected Tine Periods. Ottava-Hull, 1974 Selected Mean Price Index Values F Mean Norma- Degrees Number Number Tine Price Range Difference Value Square lized of or of Periods Index Low High- Absolute Per- Variance Freedom Groups Weeks ■ Cent Pre Information May 19 to 5 September 21 59.37 58.23 60.81 2.58 4.34 9.51* 28.04 1.47 6 19 108 Post Information September 28 to 5 November 9 58.33 57.16 59.41 2.25 3.85 3.85* 4.93 0.82 6 6 30 Corresponding Price Changes By Firm Pre-Information Post Information Change FIRM Price Indices Price Indices Absolute Percent May 19 to September 21 September 28 to November 9 IGA 60.81 59.41 1.40 2.30 Dominion 57.64 57.16 0.48 0.80 Loblavs - 59.70 59.18 0.52 0.87 A & P 60.31 58.73 1.58 2.61 Steinbergs 58.23 57.67 0.56 0.96 A.L. Raymond 59.50 57.82 1.68 2.82 ^Statistically significant at the .99 percent level. Source: Food Prices Review Board Survey, 1974. O 71 The following week of October 5, the price Index dropped an additional 3 percent from 59.96 to 58.12. The price Index stabilized near the level of 58.00 during the period of October 12 to October 26. However, the November 2 results revealed that the price Index had de clined an additional 2.5 percent, from 58.22 to 56.85. In total, the retail price Index declined approximately 7.0 per cent during and Immediately after the Information program. However, 'during the last four weeks of the post Information period, the price Index rebounded, rising 8.8 percent above the November 2 low of 56.85. The initial difference in price index levels between high and low priced stores dropped from a maximum of 15 percent on September 21 to 5.4 percent on October 12. Stores with the highest price Index levels generally responded with the largest reduction In price levels. In a similar fashion the range of prices between high and low priced chains or groups of stores declined from 8 percent on September 21 to below 4 percent by October 19, a reduction in the difference between store groups of over 50 percent. Thus, not only did price levels decline but the difference in levelB between stores declined as the more expensive stores reduced prices to meet the lower priced outlets. Price index levels in Winnipeg, the test market, revealed a some what different pattern. The Winnipeg price index declined 0.88 per cent during the week of September 28, the first week of store reaction in the Ottawa-Hull market, but it increased 0.90 percent in the fol lowing week. The price index remained relatively constant for the following two weeks, then declined 0.73 percent during the week of 72 October 21, and then Increased steadily for six consecutive weeks. Two major observations were apparent: (1) the magnitude of price declines in the Ottawa-Hull market were larger than those in the Winnipeg market, and (2) during the information period, the Ottawa-Hull Market showed a marked decline in price index levels in three specific weeks that the Winnipeg market registered an increase; namely, October 5, October 19, and October 26. The results were substantiated by move ments in the Canadian Consumer Price Index, as shown in Figure 5. Figure 5 Consumer Price Index for Food Consumed at Home May 1974 to May 1975 ut in no 10« 1M 107 1M 104 101 101 101 100 Itay Jwm July 4h| , t f f t , Oct* Iknr, Due, J ia, rub. M r , Aar. Hh /I* m • u v k c i lUtlutUu Cauil, 73 A summary of Che average weighted price index levels for all stores over the entire 26-week study is presented in Table 6, The table indicates the ranking position of each store in its local mar ket area and highlights significant price difference between stores. As in the examination of price levels in other time periods, analysis of variance was used to test for significant differences be tween store price levels over the duration of the survey. The null and alternative hypotheses were stated as follows: HO: U, ■ U - U 1 2 n HA: HO is not true, where U, to U are the mean price levels l n for each store over the 26-week period. The analysis of variance calculations and least significant difference levels are found in Table 6. The F value generated by the analysis (11.18) was larger than the corresponding table value (1.79). The null hypothesis was rejected; there were statistically significant differences between store price index levels. Significant price differences between stores were evident in each of the local market areas, between market areas, and between stores of the same affiliation from one market area to another. For example, while certain Dominion stores were significantly lower than one or more competitors in each submarket the Dominion store in Ottawa East was significantly higher than the Dominion store in Gatineau-Hull. TABLE 6 Store Price Rankings Over The Entire 26-Week Survey Period Including Significant Differences By Neighborhood Market, Ottawa-Hull, 1974 Weighted Least Significant Difference Price Overall Level .01 .05 Index for Rank for 26 weeks 26 weeks Value 1.33 1.01 Ottawa West Dominion 1244 Wellington 57.44* 1 Price index levels characterized Dominion 1653 Merivale 57.66* 2 by a single asterisk (*) are Dominion Carling & Kirkwood 57.81* 3 significantly different than Steinbergs 100 Bayshore 57.92* 4 price index levels accompanied Steinbergs 2148 Carling 58.45 5 by a double asterisk (*), at the Steinbergs 1611 Merivale 58.50 6 .99 level of confidence. Loblaws 1980 Boreline 59.67** 7 Loblaws Carllngwood Mall 59.69** 8 A- & P 1855 Carling 59.84** 9 I.G.A. Richmond & Carleton 60.34** 10 Ottawa South Dominion 1582 Bank 57.47* 1 Selected stores are significantly Loblaws 1681 Alta Vista 59.52 2 different at .99 level of con A & P 1525 Bank St. 59.99** 3 fidence (* vs. **) I.G.A. Bank & Walkley Rd. 60.28** 4 I.G.A. Bank & Somerset 60.84** 5 Ottawa East Steinbergs St. Laurent Blvd. Selected stores are significantly & Mtl. Road 57.53* 1 different at .99 level of con Dominion St. Laurent Shp. Ctr. 57.77* 2 fidence (* vs. **) TABLE 6 (continued) Average Least Significant Difference Weighted Price Overall Level .01 .05 Index for Rank for 26 weeks 26 weeks Value 1.33 1.01 Ottawa East (continued) Steinberg 1944 St. Laurent Shopping Centre 59.04 3 Loblaws St. Laurent Study Mtl. Road 59.25** 4 I.G.A. Beichwood Ave. 59.73** Gatineau-Hull Dominion St. Joseph Blvd. Hull 56.70* 1 Selected stores are significantly Steinbergs St. Joseph Blvd. different at .99 level of con Hull 57.81* 2 fidence (* vs. **). A.L. Raymond 210 Champlain Hull 59*16 3 A.L. Raymond Maloney Blvd. Oatineau 59.19 4 I.G.A. Maloney Blvd. Gatineau 60.50** 5 I.G.A. Tache Blvd. Hull 61.06** 6 Source: Food Prices Review Board Survey, 1974. 76 Analysis of Major Implications The hypothesis that significant price differences existed between retail stores was tested for the information and post information periods, September 28 to October 26» and October 26 to November 9 respectively.— ^ The results of the analysis are given in Table 4 (rows c and d). The null hypothesis, that store prices were equal, was rejected in both the information and post information periods. Statistically significant price differences were still evident between stores and between groups of stores (Table 5, row b) even though the difference had declined. The hypothesis that a public policy of disseminating information on comparative price offerings would reduce the range of prices be tween stores, decrease the variation in prices within stores, and lower the average price level was tested in stages. Regarding the hypothesis that the range of prices between stores would decline, the null and alternative hypotheses were stated as follows: HO: l2 “ C 22 HA: $ l2 > 22 2 2 where ^ 1 and 2 are normalized variances (standardized mean squares) associated with store price levels before and after the information 1/ 2 dissemination program respectively.— \ 1 represented the price vari- V ------The normalized variances are presented in Table 4 with the analysis of variance data. The variances were generated by dividing the mean square by the appropriate number of weeks employed in each period of the analysis of variance calculations. 77 ation between stores during the period July 5 to September 21 and ^ 2^ represented the period September 28 to October 26. The ratio of normalized variance for the respective time periods generated an F statistic of 1.71, statistically significant at the .10 level with 26 and 26 degrees of freedom. The null hypothesis was re jected; the ranRe in prices between stores had declined significantly subsequent to the initiation of the information program.—^ The dif ference in prices dropped from an 8.66 percent spread during the pre- information period to a 6.92 percent spread during the post information period a decline of 20 percent. The percentage price differences in each test period are given in Table 4. In-store price movements were examined to determine the nature of the relationship between price changing strategies and correspond ing store price levels. The problem was to determine if a relation ship existed between the measure of the weekly store price dispersion (the sample variance as calculated in Chapter III) and the correspond ing store price level. Price variances and price levels could in theory be correlated over time or across stores. Regression analysis was employed to test the hypothesis that in store price variations were positively correlated with store price levels. The weighted price levels across all storeB for each week of the study were employed as the dependent variable and the corresponding 17 After the termination of the information program the difference in prices between stores increased to pre-information levels— see Table 4. Similar findings were evident with respect to in-store price vari ation as well. weighted price variances were used as the single independent variable. The functional relationship was expressed as follows: *1 * B1 + B2X2 where X^ ■ weighted price index levels, and X2 “ weighted price vari ations. The null and alternative hypotheses were stated as follows: HO: B2 * 0 HA: 1*2 > 0 where B2 ia the regression coefficient associ ated with price variation. The results of the analysis are presented in Table 7. The re gression equation contained positive coefficients, that is positive slope and positive intercept term. The null hypothesis was rejected at the .99 level of confidence. The greater the in-store price vari ance the higher store price level.—^ Table 7 Regression Analysis - Store Price Index Level by In-Store Price Variation, 26 Stores for 26 Weeks Ottawa-Hull, 1974 Store Price Level = 54.02 + 9.60 Price Variance N2 = 675 STANDARD DEVIATION =8.80 R = 0,17 t value = 12.03* Correlation Coefficient = 0.42 * Significant at the ,01 level Source: Food Prices Review Board, Survey Data, 1974. The average store changed its prices on approximately 43 percent y i A combined time series and cross sectional analysis was computed. 79 of its items each week and in 20 out of the 26 stores surveyed the number of price increases was larger than the number of price decreases. The frequency of price changes varied by store affiliation; the higher priced firms tended to change prices slightly more often. Dominion stores, for example, which had the lowest average price index of all companies during the study period, changed prices on average AO.6 per cent of the time. The corresponding figures for the other firms were as follows: A. L. Rayond - A1.0 percent Steinberg - 42.0 percent A & P - 42.5 percent IGA - 42.5 percent Loblaws - 46.5 percent Meat prices tended to be changed more frequently than other fresh products or canned goods. All stores reflected a similar policy with respect to general price variations by product. (A summary of price changes by store is given in Appendix B.) In-store price variance was positively correlated with the aver age price ievel over time because as the average price increased the group of Important consumer expenditure items (those above the sample mean) Increased in price, while the groups of less important items declined. (The increase in the heavily weighted items was larger than the decline in the less important items). It is interesting to note that the frequency of price changes was higher (at 52 percent of the time) among the Important items than it was among the less 80 important items (at 37 percent of the time). Figure 6 presents the average weighted price level for each week of the survey. The positive relationship between in-store price vari- tion and store price level is apparent over time; the variation of within store prices increased steadily as price levels Increased and then declined during the period of information dissemination. The reduction inprice levels was more dramatic, however, than the reduction in price variation. To test the hypothesis that the average price Index level fell, subsequent to the information program, null and alternative hypotheses were stated as follows: HO: Ux £ U2 HA: > U2 where represented the mean price level immediately prior to the information program and represented the mean price level first for the week of October 5, midway through the information period and, then for the week of November 2, one week after the termination of the publication program. Specification of the test statistic took the form of a onetall t test: “ f - ^ < t.OS(n-l) x-y where X and Y are the mean price values for the selected time periods. The standard deviation S- - was calculated as follows: x-y VarX - Sac- Exi^ where x. ■ (X.-X) 1 n-1 1 1 0.70 Figure 6 81 Average Market Price Level and The Average Within Store Price Variation for All Stores During Each Week of the Study „ ,, Ottawa-Hull, 1974 Weekly 7 Mean ^ Price Variation feekly 0*60 f 60.00 Mean Price Price Index Level 0.55 59 00 .0.50 58.00 Price Variation 57.00- 0.40 56.00 Pre Information Post Information Infor mation 0.35 55.00 May June July August Sept. Oct.. Nov. Source: Food Prices Review Board Survey, 1974 62 VarY - Sy±2 - EyJ where y± - - 2 Sx-y - | Vx-y ■ jsx^2 + S y ^ " n ’ n The results of the analysis are found In Table 8. The null hypothesis was rejected in both tests; the calculated t values were higher than the table values* There was a significant decline In the average store price level from September 21 to October 5. and from September 21 to November 2. An F test was employed to substantiate the hypothesis that in-store price variance would decline subsequent to the introduction of informa tion. Average in-store price variances were calculated for the 26 stores for each week of the survey. The null and alternative hypotheses were stated as follows: HO: \ - U2 HA: > Ug where represented the mean price variance for all stores during the week of September 21, prior to the informa tion period, and U 2 represented the mean price variance for all stores during the week of October 5, during the information publication period. A similar test was also carried out between price variances during the week of September 21 and November 2, a post-information period. The ratio of sample variances for the respective time periodB generated an F statistic with 26 and 26 degrees of freedom. In both tests the null hypothesis could not be rejected: the calculated F values were less than the table values. The weekly price variance 83 TABLE 8 Student t Tests Examining Pre- and Post- Information Price Levels and Pre- and Post- Information Price Variance Levels Ottawa-Hull, 1974 I. Price Level Analysis A. September 21 Price Level October 5 Price Level x = 60.89 y « 58.12 Variance ** 5.31 Variance « 1.73 Standard Error xy = 0.51 t value = 5.41* B. September 21 Price Level November 2 Price Level x = 60.89 y b 56.84 Variance = 5.31 Variance = 3.17 Standard Error xy = 0.56 t value = 7.20* II. Price Variance Analysis A. September 21 - October 5 - Within Store Price Within Store Price Variation Variation Mean Sample Variance » 0.5526 Mean Sample Variance = 0.5297 F a 0.5526 = 1.04 0.5297 B. September 21 - November 2 - Within Store Price Within Store Price Variation Variation Mean Sample Variance = 0.5526 Mean Sample Variance a 0,5803 F » 0.5803 *= 1.12 0.5526 * significant at the .99 level of confidence. * Source: Food Prices Review Board Survey Data, 1974 I 84 did not significantly decline from September 21 to October 5, or from September 21 to November 2. A Review of Firm Strategies A history of the seven month store rankings, including pre- and post-information positions is given In Table 9. It is evident that the most dramatic changes in relative store ranking positions occurred (1) after the initiation of the public information program, and (2) among the relatively high ranking (higher priced) retail stores. For example, A & F at 1855 Carling Avenue dropped from the posi tion of ninth highest to number one, the lowest, during the period of October 5 to October 12; a decline of approximately 4 percent in the price index. Similarly, the I.G.A. at Bank and Somerset dropped in ranking from the highest to the lowest priced in the price index. The I.G.A. on Tache Boulevard reacted in a like fashion reducing the price index 7.6 percent during the period of October 21 to October 18. In contrast the lower priced stores changed much less in either ranking positions or in actual price index levels. The variation in pricing strategies between the more expensive affiliated stores (IGA) and the lowest priced stores (Dominion) was further examined to better appreciate the timing and magnitude of price adjustments. Figure 7 presents the weekly price movements of the highest priced store, the highest priced group, the lowest priced store, and the lowest priced group.— ^ The most expensive store, an IGA affiliated outlet, reduced its 1/ The weekly price indices by store affiliation over the entire survey period are presented in Appendix C. TABLE 9 Price Index Rankings For All Stores for the Period August 24 to November 30 Ottawa-Hull, 1974 > > V3 in in m o o o o as =5 55 as Price c C to to a to n o o n o OO o Order by Region DC . 00 13 TJ •o •o it it It rf < < < -< Index it It it it to u m h-» M to to vo to u> Rank •S' H* M to to to v£> Oi u> o May to M 00 Nov. 1 2 3 Ottawa West A & P 1855 Carling Ave. 9 6 10 10 10 10 7 9 1 1 8 7 9 3 9 IGA Richmond & Carleton 10 10 9 9 7 7 10 10 10 10 10 8 10 8 10 Loblaws 1980 Baseline 7 9 8 7 9 9 9 7 9 6 9 10 7 9 4 Loblaws Carlingwood Mall 8 3 7 8 8 8 8 5 8 9 7 9 8 10 5 Dominion Carling & Kirkwood 3 2 3 5 2 3 5 4 3 3 6 5 5 2 2 Dominion 1653 Merivale Rd .2 5 1 4 4 5 2 2 2 4 2 2 2 5 3 Dominion 1224 Wellington 1 1 2 2 6 1 4 1 4 2 I 3 4 1 1 Steinbergs 100 Bayshore 4 4 6 1 5 2 1 3 5 5 6 2 1 6 6 Steinbergs 2148 Carling 5 1 5 3 1 6 6 8 7 8 4 7 3 7 7 Steinbergs 1611 Merivale Rd. 6 8 4 6 3 4 3 6 6 7 3 6 6 4 8 Ottawa South A & P 1525 Bank St. 3 5 3 3 4 4 3 3 4 2 4 3 3 4 5 IGA Bank & Walkley Rd. 4 3 5 2 3 5 5 4 3 4 2 1 4 2 3 IGA Bank & Somerset 5 4 2 5 5 3 2 5 1 3 5 5 5 3 4 Dominion 1582 Bank 1 1 1 1 1 1 1 1 2 1 1 2 1 1 1 Loblaws 1681 Alta Vist 2 2 4 4 2 2 4 2 5 5 3 4 2 5 2 (Continued ) TABLE 9 (continued) Stores in Alphabetical Average > > co CO CO CO o OO o z z z z Price c e P p P p n o O o o o o o m OQ *o •o T3 rt rr rr rr < < < < Order by Region Index ft ft rr rr Rank to. CO to M l~* to to VO to W |-» H* to to to vo Ov u o May to ■C- t-* 03 Nov. 1 2 3 Ottawa East IGA Beachwood Ave. 4 5 4 5 5 5 5 5 5 4 5 5 5 5 5 Dominion St. Laurent Shp. Ctr. 2 1 1 4 3 3 3 1 1 1 1 2 1 2 1 Loblaws St. Laurent Blvd/ Mtrl Rd. 5 2 5 3 4 4 4 2 4 5 4 4 4 4 2 Steinbergs St. Laurent Blvd/Mtrl Rd. 1 3 2 2 1 1 1 4 3 3 2 1 2 1 3 Steinbergs 1944 St. Laurent Blvd. 3 4 3 1 2 2 2 3 2 3 3 2 3 3 4 Gatineau-Hull IGA Moloney Blvd.,Gatineau5 5 5 5 5 5 6 5 6 6 6 5 4 3 5 IGA Tache Blvd., Hull 6 6 6 6 6 6 5 6 5 1 1 NA NANA NA Dominion St. Joseph Blvd. Hull 1 4 1 1 1 1 1 1 3 3 2 2 1 1 1 Steinbergs St. Joseph Blvd. Hull 2 1 2 2 2 2 3 3 4 5 3 1 2 2 3 A.L.Raymond 210 Champlain Hull 3 3 4 4 3 4 4 2 2 2 5 4 5 5 2 A.L.Raymond Moloney Blvd Gatineau 4 2 3 3 4 5 2 4 1 4 4 3 3 4 4 1 - First week of publication 2 - First week that retail stores had an opportunity to change strategies or react to new information 3 - Last week of publication. Source: Food Prices Review Board Survey Data, 1974 87 price Index level from 67.68 on September 21 to 55.24 on October 26, a reduction of 18.5 percent. (This particular store was relatively small, 5-10,000 square feet, and traditionally did a low volume of business at relatively high price levels. It went out of business on October 26 apparently due to continued financial problems and increased price competition in the market). IGA stores as a group declined from an aggregate price index level of 63.55 on September 21 to 58.28 on November 2, a reduction of 8.3 percent. Alternatively the lowest priced store, affiliated with Dominion Stores, declined 7.0 percent during the period September 21 to November 2, and the Dominion chain dropped 6.0 percent during the same period. Additional Findings Price levels between the individual market areas in the Ottawa- Hull market were examined to test the hypothesis that the "underprivi leged" areas of the city would reflect higher price levels than the more "affluent" areas. Statistically, the null and alternative hypo theses were stated as follows: HO: U » U_ U 1 2 n HA: HO not true, where to represent the average price levels in each of the four market areaB. Analysis of variance was used to test the validity of the null hypothesis. The results of the analysis are presented in Table 10. The analysis was divided into two time periods, pre-information and information-post-information. For the pre-information analysis, the null hypothesis was rejected. There was a statistically significant FIGURE 7 88 High IGA Store Weekly Price IncfexA Levels, For High and Low Stores and Their Affiliated Group Ottawa-Hull, 1974 66.00 Average Weighted Price Index 64.00 IGA Group 63.00 62.00 Low Dominion S tore 58.00 57.00 Dominion Chain h IGA Store went out of business Pre-informat ion Information and period post-information period ~> May June July Sept. Oct. Nov. Source: Food Prices Review Board Survey Data, 1974 89 difference between store prices in the Ottawa East Market and other market areas at the .95 level of confidence. Ottawa South and Gatineau -Hull were the highest priced areas of the market but were not signi ficantly different from Ottawa West. Demographic data associated with defined electoral districts is given in Appendix E. The Ottawa-Carleton district, associated with the Ottawa East market tends to be characterized by consumers with higher education, higher income, and higher skills than the Gatineau- Hull area or the Ottawa-Centre (Ottawa South) area of the market. However, during the period following the information program the null hypothesis could not be rejected; the difference between geo graphical areas was no longer statistically significant. In fact, the most "underprivileged1* area. Gatineau-Hull. experienced the largest decline in price levels; see Table 10. While the distribution of demographics makes conclusions difficult, the Ottawa-Hull market was similar in some respects to that of the Edmonton retail food market in 1969-70 (10). There were significant price differences between stores and between local areas in the market. The higher prices tended to be found in the less affluent areas, in Gatineau-Hull and in Ottawa South which included center town. Another Interesting similarity between the two cities was some evidence of price leadership. Dominion stores, for example, were consistently the most price competitive in all areas of the market regardless of whether the local area price level was relatively high (i.e. in Gatineau-Hull) or relatively low (i.e. in Ottawa East). However, TABLE 10 Analysis of Variance of Store Price Index Levels by Geographic Areas Including the Percentage Change in Price Levels, Ottawa-Hull, 1974 Time Period/ Mean Price Index Value F Mean Least Normalized Degrees Selected Stat. Price Range Percentaee Value Square Significant Variance of Low High Difference Difference .05 .01 Level Level June 28 to 3 September 21 60.07 59.29 60.60 2.16 4 .17* 4.11 0.78 1.04 0.31 48 September 28 3 to November 9 58. 35 57.93 59.27 2.34 2 .22 2.29 1.22 1.66 0.37 20 Percentage Price Chang es by Area Information and Area Pre-Information Average Post-Information Average Percent Price Levels Index Price Levels Index Change Ottawa West 60.08 58.07 3.34 Ottawa South 60.60 59.27 2.19 Ottawa East 59.29 58.27 1.95 Gatineau~Hull 60.32 57.93 3.96 * Significant at the .95 level of confidence. to Source: Food Prices Review Board Survey Data, 1974. 91 subsequent to the introduction of public information, lower priced stores began to appear; note for example, the reaction of both IGA and A.L. Raymond stores in the Gatineau-Hull area. One additional test was employed to help determine what kinds of information programs might have the most favorable influence on market performance. While 65 food items were continually monitored during the price study, only 32 items were identified in the published weekly price rankings. The primary reason for not publishing the en tire food list was to prevent retailers from responding to only a small selected group of products. By monitoring several items, un known to retailers, it was possible to test the thesis that only the published items would reflect a decline in price levels. Two tests were performed, the first was to determine if there was a difference in the rate of increase subsequent to the termination of the publica tion program. Thus, it was hypothesized that the price levels associ ated with published products would decrease more than the price levels of products not published. The null and alternative hypotheses were stated as follows: HO: Ux < U2 HA: > U^, where was the mean percentage change in the published basket of food prices from the period September 21 to Nov ember 2, and U2 was the mean percentage change in the nonpublished basket of food prices over the same period. The test statistic took the form: t - x - y < t .05(n-l) Sx-y the percentage changes in the prices of individual baskets of items were calculated from week to week and are found in Table 11. The null hypothesis could not be rejected: the calculated value was less than the corresponding table value. There was not a signi ficant difference in the decline in prices between the published and nonpublished items. In the second teBtf it was hypothesized that the price levels associated with the published products would Increase more than the price levels of products not published. The null and alternative hypotheses were stated as follows: HO: Ux < U2 HA: > Ug where was the mean percentage change in the published basket of food prices from the period November 2 to November 30, was the mean percentage change In the nonpublished basket of food prices for the same period. The null hypothesis could not be rejected: the calculated t value was smaller than the corresponding table value. The percentage in crease in the published items was not larger than the percentage in crease in the unpublished items. An Empirical Measure of Social Benefits In Figure 8, a weighted food price index is shown on the vertical axis and an index of food consumption is specified on the horizontal axis. DD represent the aggregate demand for food with an approximate elasticity of -0,20,— ^ It is assumed that increase consumption is “ Kulshreshtha (15, p. 16) has estimated the aggregate demand for food in Canada to be approximately -0.09. Brandow (3) and others have generated estimates ranging from -0.15 to -0.34. 93 TABLE 11 Changes in Weighted Price Index Levels For All Stores Published vs. Non-Published Items Including t Tests for Significant Differences Ottawa-Hullf 1974 Week Total % Change Total Price % Change of Price Index Index Published Items Non-Published Items Sept. 21 34.09 26.80 Oct. 28 33.25 -2.46 26.60 -0.74 Oct. 5 32.67 -1.74 25.43 -4.39 Oct. 12 32.70 0.09 25.70 1.06 Oct. 19 32.66 -0.10 25.58 -0.46 Oct. 26 32.63 -0.09 25.61 -0.12 Nov. 2 32.11 -1.59 24.71. -3.51 Nov. 9 33.50 4.32 24.72 0.01 Nov. 23 35.26 5.25 26.01 5.21 Nov. 30 34.88 -1.02 26.09 0.31 Total Decreases - 7.00% Total Decreases - 9.22% Total Increases + 9.66% Total Increases + 6.59% Analysis of Price Changes Diffe.rences Sept. 21 to Nov. • Nov.2 to Nov. 30 X ■ -4.89 Y - -8.16 SX = 6.96 Y - 2.02 3L» -1.1A1.14 Y =,-1.36c * * 1.74 Y - Q.50 xi-•2 =5.19 y * = 22.23 x = 38.69 y / = 38.54 't Sx-JT = 0.91 SX-p = 2.54 t = 0.59 t = 0.48 Source; Food Price Review Board Survey Data, 1974 94 generated out of existing stocks in the short run. Figure 8 Aggregate Demand Function For Food And The Welfare Effects of Price Changes Retail Food Weighted Price Index P 1 P 2 ( $ 2 Index of Food Consumption The average Canadian family spends approximately $150.00 per month on food.^ Thus, in a metropolitan area of 450,000 people with an average family size of 3,8 people, approximately 118,000 families spend $17,700,000.00 per month on food consumed at home. l7 In 1969 the average family spent $108.00 per month on food consumed at home (33). The Food Prices Review Board estimates that food prices increased 38 percent during the period 1970-1974. Thus, an estimate of family food expenditures in mid-1974 1b approximately $150.00 per month. 95 If P^ represents the price level in the Ottawa-Hull market during the week of September 21, 1974, then given our price index for that week, 60.89, and an estimate of monthly expenditures on food of $17, 700,000.00 we can compute a food consumption index for the designated period by dividing the total expenditure by the price index level. If the price level drops 5 percent from P^ to P^ (Figure 7) the gain in consumer's surplus (P^ACP^) Is $892,525.00 and the loss to retailers (P^ABP^) is $883,691.00. The resulting net benefit to society is the area ABC, equal to $8,834.00 per month.— ^ In other words, there is a redistribution of wealth, of $883,691, from retailers to consumers and a net benefit to society of $8,834, 2 / not including the cost of publishing information.— This, as previously mentioned, is a short run phenonmena. On the other hand, a long run estimate might be a five percent decline in prices over a period of 6 monthB as depicted in figure 5 for example. The resulting net social benefit would be $53,004 accompanied by a redistribution of wealth V P. - $60.89 Q. - 290,688 p£ - $57.85 Q* - 290,688 + 2,906 - 293,594 P1 " P 2 " $3*04 Q1 " Q2 “ 2,906 P1ABP2 - $3.04 x 290,688 - $883,691 ABC - $3.04 x 2.906 « $8,834 2 2/ For policy makers it may be of interest to note that the net gain to society is $892,525 per month if improved price information reduced costs from P E to P C . That is to say, the net benefits to society increase dramatically in the event retail costs can be reduced (i.e. less price changing and less nonprice advertising and passed on to the public. (See figures 1 and 2). 96 from retailers to consumers of $4.4 million. The net of $53,004 is well above the cost to the public sector to carry out the research project including $12,000 for the consumer surveys. Several qualifications regarding the estimated social benefits are in order. It is impossible to estimate the real benefits of the information program to consumers unless we know if retailers regained these benefits through higher prices in the future. A longer run price monitoring program is required for that information. Similarly, because we can only speculate about the nature and movements of Biipply and demand functions in the market only a rough approximation of the welfare can be determined. Finally, propositions about price declines over a longer run (12 month) period are speculation. Only a longer run experiment could test these propositions. CHAPTER V CONSUMER BEHAVIOR Pre-Information Results In The Teat Market A total of 1,800 questionnaires were mailed to a sample of Ottawa- Hull consumers in the pretest survey; 1,137 completed questionnaires were returned. The demographic characteristics of the Ottawa-Hull respondents are presented in Appendix F. Consumers were asked to express their satisfaction with; selected food product categories, 26 individual food products, various forms of product Information, and several product and store characteristics like price, taste, packaging, and service. Consumer Satisfaction In General Table 12 summarizes the results of the Ottawa-Hull respondents regarding their satisfaction with 16 different categories. Respond ents were quite satisfied with both food products and with food stores in general. At least 55 percent of the respondents indicated they were always or almost always satisfied with food products and food stores; the Mean Dissatisfaction Scores (MDS)— ^ were 2.42 and 2.53 respectively. Examining the results in more detail however, revealed several areas of consumer dissatisfaction. For example, 75 percent of the 17 The lower the MDS score the higher the level of satisfaction. 97 TABLE 12 Consumer Satisfaction Levels With Selected 'Food and Store- Characteristics Ottawa-Hull, July, 1974. Always Almost Sometimes Rarely Never No .of Mean Variable Sat. Always Sat. S a t . S a t . Observ. Dissatis- Sat. tion Score All Food Products 2.08 59.56 33.36 4.53 0.45 1103 2.42 Ingredient Labelling 8.83 46.17 32.24 11.11 1.63 1098 2.50 Manufacturer's Advertising 1.85 14.73 44.30 32.53 6.58 1079 3.27 Nutritional Labelling 4.91 17.20 30.52 34.87 12.47 1085 3.32 Food Stores 6.26 49.27 31.94 10.35 2.17 1102 2.52 Instore Price Information 6.40 35.22 36.96 16.83 4.57 1093 2.77 Store Advertisements 4.98 33.14 40.72 17.35 3.78 1083 2.81 Information About Freshness 3.48 19.32 36.35 29.21 11.60 1092 3.26 Meat and Poultry Products 7.06 50.81 33.87 7.06 1.17 1104 2.44 Dairy Products & Eggs 24.95 59.42 13.46 10.85 0.26 1114 1.93 Bakery and Cereal Products 19.00 52.09 21.18 5.90 1.81 1100 2.19 Fresh Fruits 6.71 40.10 40.28 11.28 1.61 1117 2.60 Fresh Vegetables 4.29 35.06 44.57 13.81 2.15 1115 2.74 Froce sed Fruits & Vegetables 21.71 59.09 15.74 2.80 0.63 1105 2.01 Prepared Foods 16.37 46.61 23.74 11.82 4.47 1052 2.44 Food Prices 0.54 10.87 41.30 35.32 11.95 1104 3.47 Source: Food Price Review Board Survey Data, 1974. so CD 99 respondents indicated they were sometimes or only rarely satisfied with the reliability and truthfulness of advertisements sponsored by manufacturers, the MDS was 3.27. Similar results were evident regard ing nutritional information on food labels (MDS of 3.32). With respect to information provided by food stores themselves, consumers were the least satisfied with information about the fresh ness of perishable food products (MDS of 3*26). They did indicate, however, that they were somewhat more satisfied with the information in stores about prices (MDS of 2.77) and the reliability and truthful ness of advertisements sponsored by stores. Over 75 percent of the respondents Indicated they were sometimes or only rarely satisfied with store price levels (MDS of 3.47). Ap proximately 12 percent of the consumers indicated they were never sat isfied with prices. Consumer Satisfaction with Specific Food Products and Store Characteristics A complete list of tables presenting consumer feelings about 26 specific food products and their attributes is given in Appendix G. Several general observations were apparent: (1) Consumers were most dissatisfied with fresh, perishable products like fruits, vege tables, meat and poultry products. (2) Prepared foods (T.V. Dinners) were also a major source of consumer frustration. Regarding product characteristics, respondent dissatisfaction concentrated on (3) food prices followed by (4) nutritional aspects of the product and taste. A closer look at consumer reaction to food price levels revealed they 100 were most dissatisfied with (5) the prices of fresh and perishable products like beef, potatoes, tomatoes, apples, lettuce and butter. A summary of consumers' attitudes about store service character istics is given in Table 13. Price levels were again the most predom inant source of consumer dissatisfaction, followed by the speed of check out lines. The kind of information available for making store comparisons was also considered relatively unsatisfactory. Analysis of Major Implications Several statistical tests were performed to better understand the nature and the source of consumer frustrations. The validity of the hypothesis that levels of consumer satisfaction with products, stores, and their attributes, would reflect significant differences across various demographic backgrounds was tested using stepwise re gression analysis. Statistically, the null and alternative hypotheses were stated as follows: HO! bx - b2 ------bn - 0 HA: HO not true, where to b^ are the regression coeffici ents associated with the independent variables; namely, selected demo graphic characteristics. In each case the dependent variable was the consumer's Mean Dissatisfaction Score associated with the selected product or store characteristic. The regression equation took the linear form, X. * B x B X + B X + B X B X * 1 2 2 3 3 4 4 n x Consumers characterized in Chapter III as search types; I.e., the young, better educated, more highly skilled, and middle Income, were expected TABLE 13 * ^ Consumer Satisfaction With Selected Store And Personal Information Characteristics Ottawa-Hull, July, 1974 Always Almost Sometimes Rarely Never N o . of Mean Variable Sat. Always Sat. S a t . Sat. Observ. Dissatis 1. 2. 3. 4. 5. faction Score Store Food Prices 0.54 10.87 41.30 35.32 11.95 1104 3.47 Store Services & Facilities 10.67 41.90 33.93 10.86 2.62 1105 2.52 Clerks 18.49 45.24 25.67 9.15 1.43 1114 2.29 Store Cleanliness 19.76 47.04 24.32 7.51 1.34 1118 2.33 Selection of Foods 17.12 49.50 27.47 4.63 1.24 1121 2.23 Speed of Checkout Lines 6.87 21.76 32.38 26.22 12.84 1121 3.16 Store Layout 19.44 50.00 22.31 6.74 4.45 1098 2.20 Parking 38.99 43.66 11.91 4.09 1.33 1049 1.85 Prices on Weekly Specials 7.26 28.38 47.83 13.75 2.75 1018 2.76 Availability of Advertised Items 13.00 37.63 33.36 13.80 2.18 1007 2.54 Accuracy of Checkout Girls 24.36 58.24 13.94 2.62 0.81 1104 1.97 Clarity of Prices on Items 7.46 31.20 35.88 19.33 6.11 1112 2.85 Ability to Choose Stores 34.38 38.80 15.81 6.38 4.61 1018 2.08 Availability of Information for Making Store Comparisons 9.43 30.12 29.11 21.78 9.53 996 2.91 Heed for Additional Information 20.97 32.09 36.43 7.59 2.89 1106 2.39 Source: Food Price Review Board Survey Data, 1974. 3 102 to be those most dissatisfied with the food retailing Industry. The signs of the regression coefficients were expected to be: (1) negative for ages; as the consumer's age increased his MDS score was expected to decrease. (The old would be more satisfied.) (2) positive for education; as the consumer's education increased his MDS score was expected to increase. (The less educated would be more satisfied.) (4) negative for occupation; as the consumer's skills increased his MDS score was expected to increase. (The poor would be more satis fied.) (4) negative for occupation; as the consumer’s skills increased his MDS score was expected to increase. (The lower skilled would be more satisfied.)— ^ The results of the analysis are presented in Table 14. In each test the null hypothesis was rejected; levels of consumer satisfaction were significantly correlated with one or more of the explanatory 2/ 2 demographic variablesThe explained variation (R ) in the consumer satisfaction was small suggesting that while demographic character istics were important they explained only a small part of consumer behavior. The younger consumers were characteristically more dissatisfied with foods, stores, and store prices. The higher income consumers were more dissatisfied with food products and the higher skilled T7 The negative relationship existB because the professional score decreased; i.e., from 5 to 4, as skills increased from technician to manager, for example. 2/ All variables were significant at the .05 level corresponding to the table value 1.645; this employed a priori expectations and encor- porates the strength of a one-tail test. TABLE 14 Stepwise Regression Analysis: Levels of Food, Store, and Price Satisfaction By Consumer Demographics Ottawa-Hull Respondents, July, 1974. 1. General Satisfaction With Food GSWF * 2.64 - 0.02 Educ. + 0.04 Income - 0.01 Age + 0.02 Occupation R2 - 0.06 (0.004) (0.016) (0.002) (0.012) STANDARD ERRORS F - 14.14 -6.56 2.91 -2.37 1.77 t Values 2. General Satisfaction With Stores GSWS = 3.11 - 0.01 Age - 0.03 Occupation R2 * 0.04 (0.002) (0.015) STANDARD ERRORS F * 9.07 N ” 938 -4.64 -1.71 t Values 3. General Satisfaction With Store Prices GSWSP - 3.82 - 0.02 Education - 0.01 Age R2 - 0.03 (0.006) (0.002) F - 7.37 N - 941 -4.66 -2.70 t Value Source: Food Price Review Board Survey Data, 1974 o u» 104 individuals were more dissatisfied with stores. However, it was the less educated consumers that were the most dissatisfied with both food products and prices. Consumers' occupation levels generated inconsis tent signs; The higher skilled were, as expected, more dissatisfied with food stores but the less skilled were more dissatisfied with food.— ^ The hypothesis that consumers satisfaction with the availability of information for making product and store comparisons would vary significantly across demographic backgrounds was tested by stepwise regression analysis. MDS levels were the dependent variables and consumer demographics were the Independent variables. The null and alternative hypotheses were stated as: HO: b. - b “ b - 0 i 2 n HA: HO is not true, where b^ to b^ were the regression co efficients associated with the demographic variables. The results are presented in Table 15. The null hypothesis was rejectedt there was a significant relationship between MDS levels associated with the availability of market information for making accurate store comparisons and age and education. The young and bet ter educated tended to be the more dissatisfied with existing infor mation levels. Regression analysis was also used to test the hypothesis that consumers who indicated they either were dissatisfied with the avalla- 17 Food may be more important to the laborer than stores and thus a source of dissatisfaction. 105 TABLE 15 Stepwise Regression Analysis: Levels of Consumer Satisfaction With Available Information by Consumer Demographics Ottawa-Hull, July, 1974 Consumer Satisfaction With Available information For Making Accurate Store Comparisons CSW INFO « 3.00 - 0.02 Age + 0.03 Education R2 *= 0.04 (0.003) (0,010) Standard Errors F = 13.91 N * 904 -4.80 3.34 t Value Source: Food Prices Review Board Survey Data, 1974 billty of Information for making accurate store comparisons, or needed more information, would be significantly less satisfied with market performance. In the former case, the null and alternative hypotheses were stated statistically as follows: HO: bA < 0 HA: b^ > 0 where b^ is the regression coefficient associated with the level of consumer satisfaction with availability Information. In the latter case, the null and alternative hypothesis were stated in a reverse fashion. HO: bx a 0 HA: b^ < 0, where b^ is regression coefficient associated with the consumer’s need for information; measured on a five-point scale but where low values were associated with high need. Both equations took the linear form, A A A A + B2X2 106 The results of the tests are given in Tables 16 and 17. The null hypothesis in both cases was rejected: those respondents who either were dissatisfied with the availability of information or wanted more information tended to be the more dissatisfied with food products. food stores, and food prices. TABLE 16 Regression Analysis: Levels of Consumer Satisfaction with Food, Store and Price Characteristics by Satisfaction Levels with Available Information Ottawa-Hull, July, 1974 1. General Satisfaction with Foods - 2.099 + 0.107 Satisfaction with Information R2 = 0.39 F e 35,839 Standard Error (0.018) N =881 2. General Satisfaction with Stores = 1.86 + 0.230 Satisfaction with Information R2 = 0.098 F = 95,553 Standard Error (0,024) N a 880 3. Satisfaction with Store Prices = 2.758 + 0.240 Satisfaction with Information R2 = 0.011 F = 12,423 Standard Error (0.026) N = 1087 Source: Food Prices Review Board Survey Data, 1974. Pre-Information Results In The Control Market A total of 1,500 questionnaires were mailed to a sample of V Consumer Satisfaction with information increased as the index score increased; alternatively, the need for information decreased as the index score increased. 107 Winnipeg Consumers in the pre-test survey; 743 completed questionnaires were returned. The demographic characteristics of the Winnipeg re spondents are presented in Appendix H. Winnipeg consumers tended to be a little less educated and had somewhat smaller incomes than Ottawa- Hull respondents. TABLE 17 Regression Analysis: Levels of Consumer Satisfaction with Food, Store and Price Characteristics by Consumer's Need for Additional Information Ottawa-Hull, July, 1974 1. General Satisfaction with Food = 2.594 - 0.075 Information Need R2 = 0.014 F = 15,310 Standard Error (0,019) N = 1087 2. General Satisfaction with Stores - 2.84 - 0,133 Information Need R2 = 0,024 F *= 26,980 Standard Error (0.025) N = 1087 3. Satisfaction with Store Prices - 3.69 - 0.09 Information Need R2 = 0.011 F = 12,423 Standard Error (0.026) N = 1087 Source: Food Prices Review Board Survey Data, 1974. Consumer Satisfaction in General Consumers in Winnipeg were generally more satisfied with all characteristics of retail market performance thatn their Ottawa-Hull 108 counterparts. Table 18 sumnarlzes the results of their overall satis faction with food products, food stores and food and store character istics. Over 75 percent of the Winnipeg respondents Indicated they were always or almost always satisfied with food products (MDS of 2.18), and over 70 percent Indicated they felt the same way about food stores (MDS of 2.23). Corresponding to Ottawa-Hull response, Winnipeg consumers Indi cated they were most dissatisfied with manufacter's advertisements and nutritional information on food labels. Similarly, with respect to food stores, consumers were most dissatisfied with in-store informa tion about the quality of perishable products. Consumer Satisfaction With Specific Food Products and Store Characteristics A complete liBt of tables presenting consumer satisfaction levels with specific food products and their attributes is presented in Appendix I. Although Winnipeg consumers were more satisfied with specific products and their characteristics than their Ottawa-Hull counterparts, they had common sources of dissatisfaction. For example, regarding food products, Winnipeg consumers were most dissatisfied with fresh and perishable products like fruits, vegetables, meat and poultry products. In terms of food character istics they were relatively dissatisfied with price levels, the nutritional value of processed foods, taste, and product appearance. Beef, butter, and fresh vegetables were among the products that gener ated the highest dissatisfaction levels with respect to price levels. TABLE 18 Levels of Consumer Satisfaction with Selected Food & Store Characteristics Winnipeg, July, 1974 IN PERCENTAGES Always Almost Sometimes Rarely Never N o . of Mean Dis- Variable S a t . Always Sat. Sat. Sat. Observ. satisfacl S a t . Score All Food Products 8.46 66.85 22.46 2.08 0.13 721 2.18 Ingredient Labeling 11.06 43.55 34.03 10.50 0.84 714 2.46 Manufacturing Advertisement 3.23 19.12 45.14 27.98 4.50 711 3.11 Nutritional Labels 5.42 24.10 34.52 26.53 9.41 701 3.10 Food Stores 13.34 57.35 23.38 4.53 1.37 727 2.23 In-Store Price Information 11.25 43.05 31.52 11.80 2.36 720 2.23 Store Advertisements 8.95 44.89 33.14 11.18 1.81 715 2.52 Information about Freshness 11.12 35.04 31.15 16.27 6.39 719 2.71 Meats & Poultry 12.36 57.55 25.54 3.57 0.96 728 2.23 Dairy Products & Eggs 30.09 54.58 12.58 2.18 0.54 731 1.88 Baking & Cereal Products 22.55 48.83 21.59 6.19 0.82 727 2.13 Fresh Fruit 15.18 50.61 29.41 3.96 0.82 731 2.24 Fresh Vegetables 12.29 47.26 33.33 6.55 0.54 732 2.35 Processed Fruit & Vegetables 26.83 50.62 17.56 3.59 1.38 723 2.02 Prepared Foods 17.94 40.83 26.63 10.96 3.56 702 2.41 Store Food Prices 2.82 16.78 39.91 29.61 10.86 709 3.28 Source: Food Prices Review Board Survey Data, 1974 o VO 110 Table 19 summarizes the results of Winnipeg responses regarding store characteristics. Respondents were the least satisfied with store price levels, the information available for making accurate store comparisons, and the price levels of weekly specials. Analysis of Major Implications As in the Ottawa-Hull market, several statistical testB were performed to better understand the nature and the source of consumer frustration in the Winnipeg market. The results are summarized in the following paragraphs. Stepwise regression analysis was used to test the proposition that levels of consumer satisfaction with products, stores, and their attributes would reflect significant differences across demographic backgrounds. The null and alternative hypotheses were stated as follows: HO: b - b » b “ 0 l i n HA: HO not true, where b_ to b are the beta coefficients 1 n associated with the independent demographic variables. The results of the analysis are presented in Table 20. In each case the null hypotheses was rejected. It was typically the younger consumer who was most dissatisfied with food products, food stores, and food prices. The younger and lower income respondents were the most dissatisfied with food price levels and the young and better educated respondents were dissatis fied with the kind of information available for making accurate store comparisons. TABLE 19 Levels of Consumer Satisfaction with Selected Store and Personal Information Characteristics Winnipeg, July, 1974 IN PERCENTAGES Always Almost Sometimes Rarely Never No. of Mean Dis- Variable Sat. Always Sat. Sat. Sat. Observ. satisfaction S a t . Store Food Prices 2.82 16.78 39.91 29.61 10.86 709 3.28 Service & Facilities 18.53 54.21 23.23 3.18 0.83 723 2.13 Clerks 31.68 46.63 18.38 2.74 0.54 729 1.93 Cleanliness & Neatness 32.87 49.10 14.44 3.02 0.55 727 1.89 Selection of Food 30.62 50.89 15.31 2.89 0.27 725 1.91 Speed of Checkout 19.20 33.88 31.55 12.75 2.60 729 2.45 Store Layout 30.30 51.53 15.64 1.53 0.97 716 1.91 Parking Space 47.63 36.87 12.05 2.58 0.86 697 1.72 Prices on Weekly Specials 15.02 34.19 40.91 7.86 2.00 699 2.47 Availability of Advertised Items 21.66 48.78 23.81 4.73 1.00 697 2.14 Ability to Choose Between Stores 43.08 37.94 13.52 3.97 1.47 680 1.82 Accuracy of Checkout Girls 28.84 56.03 13.03 1.38 0.69 721 1.89 Information Available 16.69 35.91 29.21 12.37 5.81 671 2.54 Clarity of Prices on Items 19.06 43.64 25.69 7.87 3.72 724 2.33 Need for Additional Information 16.52 30.41 39.58 10.97 2.50 720 2.52 Source: Food Prices Review Board Survey Data, 1974 112 TABLE 20 Stepwise Regression Analysis: Levels of Consumer Satisfaction with Food Stores and Prices by Consumer Demographics Winnipeg, July, 1974 General Satisfaction with Food GSWF - 2.27 - 3.53 Age R 2 - 0.02 (0.002) Standard Errors F - 3.59 11. 69 F Values N - 634 B. General Satisfaction with Store GSWS - 2.39 - 0.01 Age R2 - 0.03 (0.002) Standard Errors F - 5.39 20.20 F Values N - 637 • General Satisfaction with Store Prices GSWSP - 4.02 - 0.01 Age - 0.04 - Income R 2 - 0.09 (0.028) (0.033) Standard F - 14.46 22.40 2.37 F Values N -600 D. General Satisfaction with the Information Available for Making Store Decision GSWA INFO - 2.55 - 0.02 Age + 0.05 Education R2 - 0.09 (0.003) (0.019) Standard Errors F - 14.46 46.73 9.10 F Values N - 6,00 Source: Food Prices Review Board Survey Data, 1974 Post-Information Results A total of 1,880 questionnaires were mailed to consumers in the post test survey; 1,137 in the Ottawa-Hull market and 743 in the Winnipeg market. The questionnaires were sent to those consumers that had responded to the pre-test questionnaires, and in Winnipeg 363 completed questionnaires were returned. 113 The questionnaires were designed to determine if consumer satis faction with retail food market performance had changed significantly since the time of the first survey. While the Ottawa-Hull respondents had been subjected to comparative price information between surveys, the Winnipeg respondents had not. Consequently, although both markets had experienced a general trend of rising retail food prlceB, the Ottawa-Hull respondents had experienced both a short run decline in food price levels and additional information on comparative price offerings. In addition to the standard questions asked respondents in both markets, the Ottawa-Hull consumers were asked to evaluate the experi mental information program. For example, they were asked specific questions like: "What would you pay to receive the weekly information on a weekly basis in the future?" "What waB the most valuable char acteristic of the program?" and "Did you change stores subsequent to the information program?" General Post Test Comparisons; Ottawa-Hull verBUB Winnipeg A summary of the perceived levels of consumer satisfaction for both markets in both time periods is presented in Table 21. The Mean Dissatisfaction Scores for 37 specific questions common to both post teBt questionnaires are presented for both markets with the percentage change calculated for each market. The percentage change in MDS values is delineated into two columns: More Satisfied and Less Satisfied where a decrease in the MDS level represents an in crease in satisfaction. TABLE 21 Levels of Consumer Satisfaction with Selected Product, Store, and Information Characteristics In Ottawa-Hull and Winnipeg, November, 1974. Ottawa Ottawa Percent Percent Hull Hull Change Winnipeg Winnipeg Change Pre- Post- More Less Pre- Post- More Less Test Test Sat. Sat. Test Test Sat. Sat. 1. Food in General 2.42 2.36 2.48 2.18 2.26 3.66 2. Stores in General 2.52 2.49 1.19 2,23 2.24 0.45 3. Food Stores Prices 3.47 3.40 2.02 3.28 3.36 2.44 4. Store Services 2.52 2.50 0.79 2.13 2.25 5.63 5. Clerk Friendliness 2.29 2.20 3.93 1,93 1.96 1.55 6. Store Cleanliness 2.23 2.21 0.90 1.89 1.96 3.70 7. Selection of Foods 2.23 2.37 4.48 1.91 2.13 10.99 8. Speed of Check Out 3.16 3.12 1.28 2.45 2.60 6.12 9. Store Layout 2.20 2.21 0.45 1.91 1.99 4.19 10. Parking Space 1.85 1.75 5.40 1.72 1.70 1.16 11. Prices on Weekly Specials 2.76 2.66 3.62 2.47 2.67 8.10 12. Availability of Adver tised Items 2.54 2.50 1.57 2.14 2.27 6.75 13. Accuracy of Check Out Girls 1.97 1.98 0.50 1.89 1.88 0.50 14. Clarity of Prices Marked 2.85 2.86 0.54 2.33 2.55 9.44 15. Your Ability to Choose Stores 2.08 2.13 2.40 1.82 1.97 8.24 16. The Kind of Information Available 2.91 2.82 3.09 2.54 2.78 9.44 17. Could You Use More Information 2.39 2.43 1.67 2.52 2.91 15.47 18. Meat and Poultry 2.44 2.48 1.64 2.23 2.34 4.04 19. Dairy and Eggs 1.93 1.97 2.07 1.88 2.01 6.91 20. Bakery Products 2.19 2.30 5.40 2.13 2.27 6.57 «T 21. Fresh Fruit 2.60 2.56 1.54 2.24 2.27 1.34 (Continued....) Table 21 (continued) Ottawa Ottawa Percent Percent Hull Hull Change Winnipeg Winnipeg Change Pre- Post- More Less Pre- Post- More Less Test Test Sat. Sat. T e s t Test Sat. Sat. 22, Fresh Vegetables 2.74 2.63 3.28 2.35 2.43 3.40 23. Processed Fruit & Vegetables2.01 2.06 2,49 2.02 2.06 1.98 24. Prepared Foods 2.44 2.45 0.41 2.41 2.49 3.31 25. Bread 2.12 2.30 8.49 2.10 2.26 7.61 26. Price of Bread 3.12 3.39 8. 65 2.87 3.26 13.58 27. Taste of Bread 2.18 2.59 18.80 2.15 2.56 19.10 28. Ready to Eat Cereals 2.08 2.41 15.86 2.22 2.52 13.51 29. The Price of Cereals 3.37 3.59 6.52 3.33 3.67 10.21 30. Fresh Apples 2.47 2.36 4.45 2.16 2.13 1.39 31. Price of Apples 3.46 3.21 7.22 3.02 2.99 0.99 32. Fresh Oranges 2.47 2.40 2.83 2.23 2.30 3.14 33. The Price of Oranges 2.35 3.13 9.36 2.93 2.97 1.37 34. Fresh Bananas 2.07 2.18 5.31 1.88 1.99 5.85 35. The Price of Bananas 2.51 2.53 0.79 1.79 2.48 38.54 36. Selection of Bananas 2.24 2.48 10.71 1.90 2.17 14.21 37. Fresh Tomatoes 2.77 3.05 10.10 2.58 2.74 6.20 38. Price of Tomatoes 3.64 3.68 1.09 3.31 3.58 8.16 39. Appearance of Tomatoes 2.65 3.05 15.09 2.44 2.83 15.98 40. Head Lettuce 2.55 2.77 8.63 2.42 2.60 7.43 41. The Price of Lettuce 3.38 3.47 2.66 3.08 3.38 9.74 42. Fresh Potatoes 2.66 2.44 8.27 2.18 2.24 2.75 43. The Price of Potatoes 3.67 2.96 19.34 3.24 2.95 8.95 44. Canned Peaches 1.95 2.01 3.06 1.97 2.03 3.05 45. The Price of Canned Peaches 2.97 3.03 2.02 2.91 3.04 4.47 46. Frozen Orange Juice 1.76 1.93 9.66 1.77 1.90 7.34 47. Price of Orange Juice 2.48 2.66 7.26 2.56 2.81 9.77 48. Fruit Juice 2.07 2.19 5.80 2.00 2.18 9.00 49. Nutritional Value of Juice 2.20 2.65 20.45 ' 2.14 2.67 24.77 (Continued....) TABLE 21 (continued) Ottawa Ottawa Percent Percent Hull Hull Change Winnipeg Winnipeg Change Pre- Post- More Less Pre- Post- More Less Test Test Sat. Sat. Test Test Sat. Sat. 50. The Price of Fruit Juice 3.13 3.15 6.39 3.02 3.18 5.30 51. Canned Corn 1.90 2.19 15.26 1.98 2.08 5.05 52. Price of Corn 2.68 2.56 6.72 2.67 2.80 4.87 53. Canned Tomatoes 1.88 2.17 15.43 1.93 2 . 1 0 8.80 54. The Price of Canned c 7Q o 7 0 <1 ao ------Tomatoes------2 .-7-7--- 2.93- t o £ ■ / & & » W JA • UH n a 55. Frozen Vegetables 2.11 2.33 10.43 2.07 2.23 7.73 56. The Price of Vegetables 2.81 2.99 6.05 2.75 2.97 8 . 0 0 57. Margarine 1.86 2.14 15.05 1.82 2 . 0 0 9.89 58. Package of Margarine 1.64 2.09 27.44 1.60 1.96 22.50 59. Price of Margarine 3.00 3.37 12.33 2.97 3.32 11.78 60. Butter 1.66 2.00 26.50 1.85 2.04 10.27 61. Price of Butter 3.32 3.34 14.44 3.55 3.68 3.66 62. Cheese 1.80 2.06 14.44 1.80 1.97 9.44 63. Price of Cheese 3.18 3.31 4.09 3.07 3.33 8.47 64. Ice Cream 1.98 2.14 8.08 1.87 2 . 1 0 12.30 65. The Price of Ice Cream 2.90 3.01 3.79 2.75 2.99 8.73 66. Fresh Milk 1.68 1.81 7.74 1.69 1 . 8 8 11.24 67. The Price of Milk 3.30 3.48 5.45 3.17 3.67 15.77 68. Eggs 1.87 2.10 12.30 1.93 2 . 1 2 9.84 69. The Price of Eggs 3.13 3.28 4.53 3.13 3.41 8.94 70. Beef 2.36 2.35 2.23 2.31 3.53 71. Taste of Beef 2.27 2.45 7.93 2.13 2.36 10.78 72. Packaging of Beef 2.36 2.64 1 1 . 8 6 2.17 2.48 14.28 73. Selection of Beef 2.35 2.57 9.36 1.95 2.26 15.89 74. Freshness of Beef 2.23 2.41 8.07 1.99 2.24 12.56 75. Fat in Beef 2.80 2.96 5.71 2.55 2 . 6 6 4.31 116 76. Price of Beef 3.79 3.59 3.64 3.74 3.79 77. Tenderness of Beef 2.64 2.67 1.14 2.44 2.49 2.05 (Continued....) TABLE 21 (Continued) Ottawa Ottawa Percent Percent Hull Hull Change Winnipeg Winnipeg Change Pre- Pos t- More Less Pre- Post- More Less Test Test Sat. Sat. Test Test Sat. Sat. 78. Chicken 2.17 2.23 2.30 2.12 2.20 3.77 79. Price of Chicken 3.07 2.88 6.19 3.01 3.04 1.00 80. Luncheon Meats & Weiners 2.42 2.77 14.46 2.32 2.82 21.55 81. Price of Meats & Weiners 3.33 3.42 2.70 3.30 3.59 8.79 82. Pork 2.22 2.37 6.76 2.18 2.35 7.80 83. Price of Pork 3.28 3.19 2.74 3.18 3.23 1.57 84. Frozen T. V. Dinners 2.75 3.31 20.28 2.63 3.20 . 21.67 85. Price of T.V. Dinners 3.33 3.74 12.31 3.17 3.77 18.93 86. Baby Food 2.37 2.59 9.28 2.26 2.65 17.26 87. Price of Baby Food 3.28 3.52 7.32 2.61 3.54 35.63 Source: Food Prices Review Board Survey Data, 1974. 118 The validity of the hypothesis that the percentage increase in levels of consumer satisfaction in the test market would be signifi cantly greater than the percentage increase in the level of consumer satisfaction in the control market was tested with the use of the Students t statistic.— ^ The null and alternative hypotheses were stated statistically as follows: HO: Ux £ U2 * HA: > Ugi where is the percentage change in the MDS level in the test market and U_ is the percentage change in MDS level • t in the control market. Selected groups of variables were examined to better understand the nature of the change in consumer attitudes. The specific tests involved: (1) the first 17 variables in Table 21, (2) all major food categories, (3) all prices, and (4) all the product character istics associated with beef. The results of the analysis are pre sented in Table 22. Regarding (1) foods in general (2) stores in general, and (3) store characteristics (the first 17 variables in Table 21) the null hypotheses was rejected. The change in attitude among Ottawa- V Parametric analysis may be employed to test the data given the assumption that consumers perceive the intervals between consecutive choice alternatives to be equal, i.e., the difference between Always Satisfied and Almost Always Satisfied is equivalent to the difference between Almost Always Satisfied and Sometimes Satisfied. While there is little a priori basis for assuming that consumer perceptions will generate abnormal distribution, to the extent that the responses are generated from interval level assumptions parametric tests may be appropriate and are statistically the more powerful than the non- parametric alternatives; Chi Square for example. 119 TABLE 22 Analysis of the Significance of Change in Consumer Satisfaction Levels, for Ottawa-Hull and Winnipeg, November, 1974. A. Foods and Stores in General, Store Characteristics and Use of Information (the first 17 variables in Table 24) Ottawa-Hull Winnipeg Percentage Change in MDS Percentage Change in MDS x»-0.97 £ “ 5 * 5 6 Sit » 6.33 Sy - 19.74 Sxy « 1.24 t value = -5.26* B. Major Food Categories (variables 18 to 24 in Table 24) Ottawa-Hull Winnipeg Percentage Change in MDS Percentage Change in MDS x ■ 1.01 y - 3.13 Sx « 8.02 __ Sy ■ 4.55 Sxy ■ 1.34 t value ■ 2.17* C. All Food Prices (selected variables in Table 24) Ottawa-Hull Winnipeg Percentage Change in MDS Percentage Change in MDS x ■ 3.24 jr ® 8.80 Sx - 49.97 Sy » 96.44 Sx-y - 2.37 t value » 2.34* D. All Beef Characteristics (see Table 24) Ottawa-Hull Winnipeg Percentage Change in MDS Percentage Change in MDS x ■ 4.79 jj ■ 8. 38 Sx - 31.99 Sy - 30.80 Sx-y - 2.80 t value ■ 1.28 * Significant at the .95 percent level Source: Food Prices Review Board Survey Data, 1974. 120 Hull reBpondenta concerning food products, stores, and store charac teristics was aignlficantly different than the change In attitude among Winnipeg consumers. The Ottawa-Hull respondents in sotne cases became more aatlsfied, whereas the Winnipeg respondents generally became more dissatisfied. Similar results were found In examining major food categories and specific food prices; In each caae the null hypothesis waa re jected. Not only was there a significant difference In the chanKe of attitude about food priceB between the two markets, but also changes in attitude were even evident about food categories like meat, poultry, dairy products, etc. One specific commodity, beef, was examined in more detail to determine if changes in attitude carried over into specific food characteristics like taste, packaging, selection, freshness, tender ness, and fat content, as well as price. Although change in attitude among Ottawa-Hull consumers was more positive than that among the Winnipeg respondents, the null hypothesis could not be rejected. There was not a significant difference in the change in non-price product characteristics. In general, Ottawa-Hull respondents showed either higher increase or a small decrease in satisfaction with (1 ) food products, (2 ) food stores, (3) food prices, (4) store services, and (5) the information available to them for making accurate store comparisons than their Winnipeg counterparts. Also Winnipeg consumers were less satisfied with the information available to them for making decisions and indi cated a higher degree of relative dissatisfaction with their personal 121 ability to choose between stores. Consumers In the test market were asked to evaluate the compara tive price information program. They indicated a range of maximum values they would be willing to pay to receive the information on a weekly basis. The mean value was 34.14 cents per week. The distri bution of value is given in Table 23. Figure 10 presents the cumula tive frequency of consumers willing to purchase weekly price informa tion publications at selected price levels. The validity of the hypothesis that levels of perceived value attributed to additional information would be significantly different across various demographic backgrounds was tested using regression analysis. The null and alternative hypotheses were stated as follows: HO: b - b. ■ b, — b - 0 X Z v TV HA: HO not ture, where b^ to b^ are regression coefficients associated with Independent demogrphic variables. The perceived value of the information was the dependent variable. The results of the analysis are given in Table 24. The null hypothesis could not be rejected; there was not a significant dif ference in values offered for the information across consumer demo graphic backgrounds. The hypothesis that consumers who received comparative price information by direct mail would attributed a higher value to the information than consumers who only received information via public media was examined using the Student's t statistic. The null and alternative hypotheses were stated statistically as follows: TABLE 23 122. The Distribution of Values Offered for Information by Ottawa-Hull Respondents, November, 1974 Range in ^ Cumulative Cents Frequency Percent Percent 0 32 10.44 1 0 0 . 0 0 1 - 9 54 17.58 89.56 10 - 19 34 11.07 71.98 20 - 29 60 19.54 60.91 30 - 39 28 9.12 41.37 40 - 49 2 0 6.51 32.25 50 - 59 36 11.73 25.74 60 - 69 1 2 3.90 14,01 70 - 79 1 1 3.58 1 0 . 1 1 80 - 89 2 0.65 6.53 90 - 99 14 4.56 5.88 1 0 0 4 1.32 1.32 Source: Food Prices Review Board Survey Data, 1974 Figure 9 Cents Cumulative Frequency of Consumers per Willing to Purchase Weekly Price Week Information at Selected Price Levels. 100 90-99 80-89 70-79 60-69 50-59 40-49 30-39 20-29 10-19 1- 9 50 100 150 " 2 W T 5 7 5 3 T 0 Number of Consumers Source: Food Prices Review Board Survey Data, 1974 123 TABLE 24 Results of Regression Analysis: Values Offered for Information by Consumer Demographics Ottawa-Hull, November, 1974 Values ■ 31.48 + 1.69 Occupation - 0.22 Age F - 1.14 (1.686) (0.240) Standard Errors D.F. - 84 R 2 - 0.03 0.01 -0.92 t Values Source: Food Prices Review Board Survey Data, 1974 HO: Ux < U2 HA: > U2 where was the mean value associated with direct mail receivers, and U 2 was the mean value attributed to public media receivers. The results of the analysis are presented in Table 25. The null hypothesis could not be rejected; there was not a significant difference between the values offered for information by direct mail recipients versus nondirect mall recipients. TABLE 25 I Analysis of Prices Offered for Information - Direct Versus Indirect Information Recipients, Ottawa-Hull, November, 1974 Direct Mall Receivers Public Media Receivers x - 33.69 y - 41.18 N - 63 N - 33 Variance =. 514.38 Variance - 836.36 Sxv - 1350.74 (63 + 33) &xy 63 x 83 Sxy ■ 4.7 t value ■ 1.59 Source: Food Prices Review Board Survey Data, 1974. 124 Consumers in both the test and control markets were asked if they had recently changed stores. Approximately 43 percent of the Ottawa-Hull respondents indicated they had changed or temporarily changed stores i 57 percent; indicated they had not c h a n g e d A l t e r natively, 18 percent of the Winnipeg respondents indicated they had recently changed stores while 82 percent said they did not. The results are presented in Table 26. TABLE 26 Frequency of Consumers Changing Stores Because of Information in Ottawa-Hull and Winnipeg, November, 1974. Did you change YES TEMPORARILY NO Stores because Number Percent Number Percent Number Percent of information provided by the Board? Ottawa-Hull 78 23.00 70 2 0 . 0 0 193 57.00 Winnipeg 13 1 0 . 0 0 1 0 8 . 0 0 105 82.00 Source; Food Prices Review Board Survey Data, 1974. This change in shopping habits among Ottawa-Hull respondents was also evident in the percentage distribution of consumers by store types. There was a shift in patronage in the Ottawa-Hull market to retail stores affiliated with lower price index levels. There was also an increase in market concentration with the top four firms moving from 89 to 95 percent of market shares. Alternatively, in the Winnipeg market, the major store types maintained a relatively constant percentage with affiliated co-opB gaining consumers from V Several respondents qualified their answer if it was NO. They Indicated that information had substantiated their original choice. 125 Che ocher category. The responses are found In Table 27. TABLE 2 7 Change in Store Patronage by Consumers in Ottawa-Hull and Winnipeg, November, 1974. OTTAWA-Hull OTTAWA-HULL Pre-Tes t Pre-Test Post-Test Post-Test Distribut ion Distribution Percent Absolute Percent Absolute Percent Change A & P 1 2 1 . 0 0 5 1 . 0 0 0 Co-op 3 ' 1 . 0 0 2 0.50 -0.5 Dominion 2 2 1 2 0 . 0 0 8 6 25. 00 +5.0 I 6 A 188 17.00 50 15.00 - 2 . 0 Loblaws 275 25.00 80 23.00 - 2 . 0 Steinbergs 302 27.00 109 32. 00 +5.0 A.L. Raymond 14 2 . 0 0 2 0.50 -1.5 Others 76 7.00 9 3.00 -4.0 Total 1091 1 0 0 . 0 0 343 1 0 0 . 0 0 0 OTTAWA-HULL OTTAWA-Hull Pre-Test Pre-Test Post-Test Post-Test Distribution Dis tribution Percent Absolute Percent Absolute Percent Change Co-op 18 3.00 9 6 . 0 0 +3.0 Dominion 1 0 0 14.00 2 0 14.00 0 Loblaws 63 9.00 1 1 8 . 0 0 - 1 . 0 Safeway 514 71.00 104 72.00 + 1 . 0 Others 24 3.00 0 0 . 0 0 -3.0 Total 719 1 0 0 . 0 0 144 1 0 0 . 0 0 0 Source: Food Prices Review Board Survey Data, 1974 Consumers In Che test market were asked several specific ques tions about the experimental information program. For example, when they were asked if the information program saved them time, 87 per cent of the respondents replied "yes" or "sometimes" while 13 percent said "no". Similarly, 94 percent of the respondents indicated that the information program made them more aware of price differences between stores and between products. (See Table 28) TABLE 28 Frequency of Responses of Ottawa-Hull Respondents on Opinions of Information Program, November, 1974. TEMPORARILY NO or or YES SOMETIMES NEVER Number Percent Number Percent Number Percent Did the Infor mation save you time? 182 54.00 112 33.00 45 13.00 Did the Infor mation make you more aware? 283 84.00 33 1 0 . 0 0 22 6.00 What did you like about the Information? Frequency Percent (1) More Aware 1 2 0 36.00 (2) Reduced Prices 64 19.00 (3) Increased Competition 59 18.00 (4) Saved Money 9 3.00 (5) Saved Time 8 2 . 0 0 (6 ) A Combination of Above 70 2 1 . 0 0 (7) Did Not Like __ 5 1 . 0 0 335 1 0 0 . 0 0 Source: Food Prices Review Board Survey Data, 1974. 127 When consumers were asked to describe what they thought of the Information program, 98 percent of the respondents replied In a posi tive manner. The majority of consumers Indicated that the Information either made them (1) more aware, (2) reduced price levels, (3) in creased competition, or (4) some combination thereof, (See Table 29). TABLE 29 Frequency of Consumer Response to Different Types of Information Media Ottawa-Hull and Winnipeg, November, 1974, What type of Informat ion Media would you prefer for Ottawa -Hull Winnipeg food & store information? Pretest Post-Test Pretest Post-Test % % X % 1. Newspaper* 52.00 67.00 51.00 60.00 2. Direct Mail 29.00 25.00 25.00 28.00 3. Radio 2 . 0 0 3.00 5.00 3.00 4, T.V. 4.00 3.00 5.00 6 . 0 0 5. A Community Food Information Center 8.00 1.00 8.00 1.00 6 . In Retail Food Stores 4.00 0.50 4.00 2 . 0 0 7, In Magazines 1 . 0 0 0.30 2 . 0 0 8 . Other 0 0 . 2 0 0 1 . 0 0 Among Ottawa-Hull consumers the newspaper improved by 15 percentage points while the idea of a local information center lost 7 percent of the respondents. Source: Food Prices Review Board Survey Data, 1974. 128 Consumers in both markets were asked what type of media would best provide them with information. Respondents in both markets indicated an increased appreciation or demand for newspapers over the other media. The pre- and post-test response frequencies are given in Table 29. Perceived Measures of Social Benefit The information on food price comparisons provided by the study exhibited characteristics of a public good. Its value was not deter mined by the traditional market forces of supply and demand. Conse quently, the perceived value, as expressed by the consumer for the information, served as a proxy, in the absence of a normal market estimate. Consumers indicated they would, on average, be willing to pay a maximum of 34.14 cents per week to increase their level of informa tion (and still remain on the same indifference curve). Thus, the average household would in theory be willing to pay in the neighor- hood of $1.36 per month to receive the information; or 118,000 families would pay approximately $174,541 a month and $2,094,500 annually to receive the information service,— ^ Note, however, that the above calculations extract all perceived consumer surplus: to some the information was worth one dollar a week, to others it was worth nothing. V This extending observation is made notwithstanding the potential for nonresponse bias and in full appreciation of the pretest question naire's "educational" influence limiting extensions to the entire popu lation. A discussion of the aggregation problem is presented in Chapter II. CHAPTER VI SUMMARY, CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS The Setting Most market transactions are characterized by a degree of imper fect information. This research was conducted with the premise that consumers may not have adequate information to rationally choose between retail food stores and hence are unable to accurately express their preferences in the market place. The consequence of imperfectly informed buyers may be a market equilibrium characterized by a dispersion of prices even for a homo geneous product. (26, p. 214) As products become more complex, through increased product lines and differentiation, the amount of search required to make optimal decisions increases rapidly. However, the increase in search behavior may not be sufficient to compensate for the deficiency in market information which has emerged. The con sequence may be a dispersion of prices that do not accurately reflect either costs or consumer preferences and thus are not likely to be efficient or effective guidelines for resource allocation. Given thlB background the research endevoured to monitor both prices and consumer attitudes in a complex multiproduct industry food retailing -- and examine the consequences of publishing additional comparative price information. It was hypothesized that improved price information would reduce the market price level, reduce 129 130 the dispersion of price offerings between sellers» reduce the amount of in-store price variation, and Increase the level of consumer satis faction with food retailing performance. Two Canadian metropolitan areast Ottawa-Hull and Winnipeg, were selected and employed as test and control markets respectively. A pre-test post test control group research design was developed around three separate phases of analysis. Phase one Involved monitoring retail food prices and simultaneously measuring consumer satisfaction with various aspects of food marketing performance. In phase two comparative price information was introduced into the test market for five consecutive weeks. Retail prices in both markets continued to be monitored during the price publication period. Phase three involved monitoring retail price behavior in the two markets subse quent to the termination of the information program. During this final period consumers in both test and control markets were resur veyed to determine if their perceived satisfaction with retail market performance had changed over time. The entire experiment lasted seven months including five consecutive weeks of comparative price publication. i Summary of Findings There were several significant adjustments in price and consumer behavior during the three phases of the research experiment: 1. During the pre-information period retail food prices rose steadily notwithstanding a few relatively minor short run declines. Statistically significant price differences were 130 the dispersion of price offerings between sellers, reduce the amount of ln-store price variation, and Increase the level of consumer satis faction with food retailing performance. Two Canadian metropolitan areas, Ottawa-Hull and Winnipeg, were selected and employed as test and control markets respectively. A pre-test post test control group research design was developed around three separate phases of analysis. Phase one involved monitoring retail food prices and simultaneously measuring consumer satisfaction with various aspects of food marketing performance. In phase two comparative price information was introduced into the test market for five consecutive weeks. Retail prices in both markets continued to be monitored during the price publication period. Phase three involved monitoring retail price behavior in' the two markets subse quent to the termination of the information program. During this final period consumers in both test and control markets were resur veyed to determine if their perceived satisfaction with retail market performance had changed over time. The entire experiment lasted seven months including five consecutive weeks of comparative price publication. i Summary of Findings There were several significant adjustments in price and consumer behavior during the three phases of the research experiment: 1. During the pre-information period retail food prices rose steadily notwithstanding a few relatively minor short run declines. Statistically significant price differences were 131 recorded between Individual retail stores and between in dividual submarkets within the metropolitan area of Ottawa- Hull. There was a positive relationship between in-store price variation and price level; the wider the variation the higher the average price level. 2. Subsequent to the introduction and publication of additional comparative price information retail food prices declined. The price reduction was statistically significant dropping 1.5 percent the first week, 3.0 percent the following week, and an additional 2.5 percent the sixth week of the program; the total decline was 7.0 percent. The higher priced stores reduced prices more than the relatively low priced stores. Similarly the higher priced areas recorded the largest de cline in average price levels. Although there still remained a significant difference between the price levels of selected retail outlets, there was a statistically significant decline (1) in the overall price level and (2) in the price dispersion between stores. In-store price variations declined in advance of the price level decline and then increased prior to general rise in prices. The difference in price levels between vari ous submarkets was no longer statistically significant subse quent to the publication of price information. Price levels in the control market continued to reflect "normal" market conditions, gradually Increasing over time with periodic but minor short run declines, Within two weeks after the termination of the public infor mation program retail food prices began to rise and increased 8.8 percent by the end of the research period. In-store price variation also increased subsequent to the termination of the publication. In any one particular week, the higher priced stores were those reflecting relatively wide variation of priceB, and for any one store, the corresponding price level was positively correlated with in-store price variation over time. Stores on average tended to change prices approxi mately A3 percent of the time. The higher priced stores changed prices more frequently than the lower priced stores, and in the majority of cases the number of price Increases was larger than the number of price decreases. The frequency and particularly the magnitude of price increases among the most Important consumer expenditure items was larger than the frequency and magnitude of price decreases among the less important items resulting in a general rise in the mean price level and an increase in the in-store price variation over time. Assuming an aggregate elasticity of demand for food of -0.2 a five percent decline in retail food prices in a market of 450,000 people generates a redistribution of $883,691 per month from retailers to consumers. The corresponding net benefit to society was calculated to be approximately $8,834 per month. The pre-information survey results indicated that consumers in both markets generally were satisfied with food products and food stores; the control market respondents were some what more satisfied with general retail food market perfor mance than their test market counterparts. All consumers indicated they were less satisfied with particular product and store characteristics than they were with foods and stores in general. Food price levels were a major source of dissatisfaction along with food quality, nutrition and the information available for making accurate store and product purchase decisions. It was generally the younger individual that was most frus trated with retail performance, and it was typically the younger respondents who indicated a need for additional mar ket information. For example, it was the young and low income consumers who were most dissatisfied with food price levels, and it was the young and better educated consumers who were most dissatisfied with the availability of market information. The post-information survey of consumers revealed that the change in attitude among the test market respondents waB significantly different than the change in attitude of the control market consumers. Consumers subjected to additional information showed a larger increase in satisfaction than those consumers without additional information. The results were statistically significant with respect to (1) food pro ducts and stores in general, (2) store service character istics , (3) major food categories and (4) food price levels. 8 . Approximately 43 percent of the test market respondents indicated they had changed stores as a result of the infor mation program; alternatively 18 percent of the control market respondents Indicated a change of patronage. 9. Consumers receiving additional market information indicated they would be willing to pay an average of 34 cents per week to receive similar comparative price information in the future. Thus the total perceived economic benefit derived from the information was approximately $160,000 per month. The cost of the program Including price analysis and consumer questionnaires was approximately $3,500 per month. To moni tor all stores in the market would cost approximately $5,000 per month including consumer questionnaires. 10. There was not a significant difference in values offered for the price information across consumer demographic back grounds or in values offered for price information between direct mail versus nondirect mail recepients. 11. When asked what they liked most about the information pro gram most respondents indicated that it (1) made them more aware, (2) it decreased price levels, and (3) it increased market competition, in that order of importance. Consumers in both markets indicated that the newspapers were the most effective media for disseminating comparative price Informa- 135 tion. Over 94 percent of the test market respondents indi cated that the Information program made them more aware of price differences between stores and between products. Conclusions To measure changes in price efficiency actual prices are normally contrasted with prices that would be generated by an "efficiency" model, which in most cases is the perfectly competitive model. The perfect market concept gives us a "diagnostic tool" by which we can test the hypothesis that prices do not accurately reflect market demands. As suggested by Bressler and King, (4, p. 413) the results either Indicate reasonable performance or a need to explore the order of local institutions. The fact that additional price information could significantly alter the conduct of both food retailers and consumers (prices fell and consumers changed stores) in itself suggests there is a need to "explore the order" of metropolitan retail food markets, at least from a consumer search and information stand point. Both the magni tude of the price comparison problem at the retail level and the magnitude of potential consumer savings resulting from Improved consumer knowledge‘indicate that the benefits and costs associated with the public provision of price information may warrant continuous examination. A problem exists however in drawing conclusions about market per formance in imperfect markets because there is a general deficiency in understanding (1) how Imperfect markets perform and (2) how to improve 136 them. We have yet to adequately bridge the gap between the per fectly competitive model and the Imperfect markets that surround us. We need, for example, a comprehensive workable model to accur ately explain behavior in a differentiated poorly informed oligopoly; but such a model does not exist. Notwithstanding it's limitations we use the competitive model to begin to develop a foundation for conclusions about market per formance. In an atomistic market selling a homogeneous product we conclude that less price dispersion, lower price levels, and increased consumer satisfaction are indications of improvements in market performance. In the case of the test market we observed a concentrated dif ferentiated oligopoly and there is little in theory, barring struc tural changes, to suggest that price levels should decline under those conditions. In fact, the probability that improved information will decrease market prices grows as the market construct approaches the perfectly competitive state. On the other hand, the potential capa city for prices to decline increases as the structure approaches that of the monopolist facing relatively inelastic demand. Thus, under test market conditions we suggest that while information had an adverse impact on market concentration, it increased from 89 to 95 percent for the top four firms, it may have had a larger and compen sating impact on the price elasticity of demand which resulted in a general price decline. As the price elasticity of demand increases the profit maximizing price declines. 137 Stlgler's arguments support the notion that poorly informed consumers logically have a higher tolerance for inflated prices; they will endure more price increases before deciding to search for alternative offers. This higher threshold for price exploitation suggests relatively low cross elasticities of demand (a proxy for market power), and relatively inelastic demand curves for individual sellers. With 43 percent of the test market consumers changing stores after becoming better informed it suggests a change in market struc ture that would logically support lower price levels. The cost of search required for an individual buyer to accurately evaluate the price offers on a relatively homogeneous food basket had declined and perhaps for the first time did not exceed expected savings for any individual buyer. The likelihood of inaccurate price disper sions was reduced. Test results suggest that the strategy of "variable price merchandising" is particularly logical for sellers in a retail food environment. With the frequency and magnitude of price changes be ing positively correlated with store price levels, total profits derived are greater than they would be otherwise. Thus frequent price changes seemingly make store comparisons across firms more difficult, discourage consumer search, reduce the level of price information held by consumers, correspond to inaccurate price dis persions, and consequently increase the potential for monopoly pro fits. In short, Stlgler's thesis finds support in thiB research... ignorance is a source of price dispersion in a whole range of market 138 structures. It Is categorically more difficult for any market to support a wide range of prices given an atmosphere of adequate or near optimal information. Since increased price information allows consumers to more accurately reveal their preferences through their store selection decisions, the increase in consumer satisfaction on a broad range of categories including price levels, suggests that allocative accuracy was improved in the test market. Similarly, because higher priced stores reduced their price levels in a highly concentrated market during an interval when consumers revealed an increased capacity to accurately reflect their preferences (and changed stores) supports the notion that price efficiency was improved as a result of the information experiment. Thus, there is a relatively high proba bility that an improvement in operational efficiency occurred in the test market. Increased price information shifted patronage to the low priced firms which in theory allowed them to operate farther out on their cost curves. With respect to progressiveness in the market it is of interest to note that subsequent to the information experiment the IGA group introduced a "new" grading system for meats that offered several different qualities of cuts within the existing Federal grading system, and a corresponding range of prices. The "new" system was apparently designed to meet customer complaints about the price- quality relationship in meats in all stores, not only in the I.G.A. affiliates. 139 Some Implications The market for consumer goods is increasingly characterized by complexity, both in numbers and by differentiation. It is not un common to find, nor is it theoretically unfounded to expect a wide range of price offerings for identical products in a single (but poorly informed) market. Thus, it is not difficult to understand why "normal" competitive pressures against price increases and in flationary tendencies may be limited and often ineffective under suboptimal information conditions. Not only is there the fundamental problem of being able to com pare price and quality differences across hundred and thousands of offerings but there may exist a "free rider" problem as well. Even if for a moment one assumed there was adequate search in the market to generate a competitive well-informed equilibrium, an individual would soon realize that so long as the "other" consumers were search ing he could enjoy the competitive results without participating him self. Consequently, as more and more consumers appreciate this "free rider" capacity, fewer and fewer actually participate in extensive search behavior. The market may ultimately support an equilibrium condition characterized by a wide range of prices and a higher than competitive equilibrium (20, p. 1289). Such may be the case in the retail food industry. In the pre- stimulus price analysis there was as much as a IS percent difference between stores in weighted prices for identical, largely nondiffer entiated baskets, and as much as a 60 percent difference in the price 140 of the same commodity, a condition in theory that is impossible to sustain and difficult to explain unless some imperfect knowledge is assumed.— ^ The market cannot, nor can we expect it to, perform in an opti mal fashion without some minimum level of awareness. Although the minimum is as yet undefined, particularly in consideration of a whole range of market and product characteristics, perhaps the exist ing levels of information in many markets fall short of acceptable performance levels. In the light of the above results, social ex pectations in terms of price efficiency and resource allocation may have to be tempered to the degree that fundamental competitive pre requisites are nonexistent. Increased price competition could force nonprice competitive participants out of the market and thus tend to increase concentration levels. However there is little evidence to suggest that by increas ing the number of sellers in the retail food industry, without chang ing the level of market information or nonprice competition, the price inefficiency or Inflationary pressures will be significantly reduced. On the contrary, the larger firms are invariably the most price competitive and usually provide price floors above which the smaller retailers operate. Perhaps only under conditions of improved 17 If wide price differences for identical products can be sustained between neighborhood stores, only three or four city blocks apart, by store differentiation, it seems unfortunate that consumers cannot be made aware of the costs associated with that differentiation. 141 Information do smaller retailers have the opportunity to be price competitive, and to offset the advertising economies and extensive nonprice competition employed by the larger firms. This implication is supported by the reactions of higher priced retailers in the test market; only during the information period did smaller retailers be gin to lead the market in terms of low price offerings. Similar results were evident in the Edmonton Study (10). Thus the public provision of comparative price information may provide an avenue for the smaller firm to compete on a price basis and thus offset the very expensive nonprice competitive alternative.— ^ The proposition that price information warrants public dissem ination, that it in fact falls in the realm of a public good, rests on two factors; the nature of the product (Information itself) and the inherent free rider consideration. Consumers in the market derived benefit from the public dissemination of information whether they used the information or not. The fact that they could have used, or potentially might have used, the information was enough of an impetus to generate a general presumably competitive price decline. In short, all consumers benefitted from the general reduction in prices. Additional benefits were realized by consumers who further used the information to locate the lowest priced store In the lower priced market. The fact that 43 percent of the test market respondents 17 If it becomes obviouB that market ignorance tends to reduce mar ket concentration levels then the benefits and costs of trading less power for more ignorance need public examination. 142 indicated that they changed stores as a result of the Information suggests that a significant proportion of consumers captured both the primary and secondary benefits of the additional Information. Private search and the private provision of information may result in some individual benefits in terms of finding lower priced commodities but it is not as likely to cause major changes in retail pricing strategies as a recognized public dissemination program. The net results depend extensively on the reputation of the provider of information. Further it is questionable, given the complex nature of the food product offering, if the individual benefits derived from extensive private search would outweigh the transportation and time costs. To the extent that improved information can influence both market structure and conduct, that is: (1) reduce search costs, (2) increase the correlation between successive price offers, (3) reduce the opportunity for price discrimination, (4) increase the competitive pressure on the inefficient firms, (5) widen the geo graphic size of the market, (6) encourage entry forestalling pricing policies, (7) reduce the probability of confounding pricing tactics, and (8) generally increase the sensitivity of market participants to price-quantity relationships, the research may provide some implications for examining inflation. As we allocate more and more of our resources on nonprice factors it becomes increasingly diffi cult to measure price efficiency because price is less accurate, less meaningful, and consequently less useful as a performance norm. Similarly, with increased product and service differentiation it is increasingly difficult to relate productivity and quality changes to price changes. Thus, we find it more difficult to measure in flation, and correspondingly more difficult to control it. The implication of the research is that we should and can readdress the problem of evaluating price efficiency; step one is the provi sion of sufficient price information to allow participants to at least make intelligent decisions about given products and step two, is to improve, develop, and disseminate quality standards (informa tion) on both goods and services. It has been done in meat grading; it may have to be done for toys and for store services. Quality information is available from mass-medla advertising, but the pro blem is to differentiate between the Informative and the persuasive message. Public-private joint ventures in the area of standardizing the quality of the message could well make their mark given the high potential for positive externalities. The whole argument suggests that inflation may only be a symptom while ignorance and rapid dif ferentiation are the problems. The results of the research bear heavily on public policy and particularly competition policy. The fact that society is unhappy with market performance has been demonstrated throughout the developed world by such actions as wage and price controls and increased gov ernment involvement, not only in the regulation of the market but * in the actual public provision of goods and services. The question is, has society adequately addressed the problem particularly at the consumer level of market transaction? To do so we may have to con- 144 aider market Information as a public good. The conclusion Is that public policy directed towards market performance may need some redirection. Perhaps theories of industrial organization and public goods theory both need to better appreciate the functional relationships between market information and market conduct and performance. Clearly, market imperfections cover a wide spectrum and consequently the prescribed cures for these ills must incorporate an adequate appreciation of the source of the anomalies. In theory and in practice information is critical and of paramount importance in determining how well markets adjust and per form. Under conditions where it is increasingly apparent that infor mation is a limiting factor, sustained price dispersion may be an example, it is increasingly difficult to defend policies that con tinue to ignore it in favor of controls. Selected Recommendations Based on Research Findings Market performance, measuring it, changing it, and evaluating it, will continue to become a dominant consideration among economists, politicians, and regulatory agencies in the future because problems like inflation, power concentration, and general education affect the welfare of every member of society. The findings of the research suggests criteria for both measuring and modifying retail market performance and thus implicate a number of private and public partici pants. In fact, no one is really left untouched by the buying, sell ing, searching, advertising, and endless exchange that occurs in the 145 retail food Industry. Pricing efficiency, technical efficiency, allocative efficiency, progressiveness, and equity are common variables used to evaluate market performance. Three related but distinct factors that were examined in the study are recommended for particular consideration: (1) levels of price dispersion, (2) measures of consumer satisfaction, and (3) the level of public information. The impact of the above three factors have different implications for different people. The following proposals are related to the responsibilities of economists, public officials, and regulatory agencies. To the extent that the research findings found evidence of undue price dispersion, extensive variable price merchandising, allocative in accuracy, and unsatisfactory levels of comparative price information, the following recommendations are proposed: 1. That public price monitoring programs be employed to measure the degree of price dispersion associated with existing price equilibrium in retail food markets. This is not to be confused with fluctuations in the general price level over time. Price dispersion refers specifically to the difference in price levels between given commodities at a given point in time. In other words we have to come to grips with the problem of determining how much price dispersion is acceptable on the basis of costs and really how much of it we can continue to legitimately sweep under the protective rug of nonprice differentiation. 2* That public price monitoring programs be employed to better 146 appreciate the kinds of pricing strategies employed by retailers and their consequences. The private citizen cannot and does not have the capacity to adequately check on price changes. In this study alone over 18 thousand price changes were recorded out of a total of 42 thousand prices monitored. Only a computer could examine this magnitude of price change and be able to conclude that the frequency and magnitude of price increases were larger than the corresponding price decreases. With practically as many price decreases as price increases what private citizen can accurately add it up, let alone defend himself against such potentially inflationary•strategies? Stores can lower some prices (specials), raise several others more, and the "ratchet" effect results in a higher and higher average price level. 3. That a public price monitoring program be employed to appreciate the extent of price discrimination in metropolitan retail food i markets. Those market segments that tend to be characterized by relatively more inelastic demand curves or at a minimum are less well informed may often be the least capable of paying higher prices. 4. That a public program of monitoring consumer satisfaction levels be employed to empirically measure allocative accuracy. At least two separate sets of consumer perceptions generate measures of how well the market provides general satisfaction: (1) how well the market satisfies different types of consumers over time, and (2) what the specific sources of consumer dissatisfaction are; 147 i.e., quality, service, quantity, value, ignorance, etc. In fact the concept of allocative accuracy may become one of the more useful tools in judging market performance as markets con tinue to become more complex and interdependent. 5. That a policy of disseminating comparative price information be employed in retail food markets. Since prices on average declined in the test market, differences in price levels between stores declined, the degree of price variation within stores declined, and the level of consumer satisfaction with prices and stores increased subsequent to the publication of price comparisons, the continued use and examination of publicized information is recommended. Retail prices are not confidential; they are not private information; they are publlcally displayed on counters, shelves, and in media advertisements every day of the week. It can be argued that public comparison of privately publicized prices is a legitimate function of the public sector. Although privately produced, the nature of the product is public. In fact, only if price information is adequately shared among participants can we expect a market to perform efficiently. Ignorance can be a source of price dispersion, price discrimina tion, allocative inaccuracy, and ultimately an inequitable distri bution of wealth. The question really is not if there should be more perfect in formation but rather what is the most equitable and efficient means of providing it. In this regard the public provision of information 148 over various periods needs to be examined under alternative conditions where, for example, (1) all stores In a market are Involved, (2) only a sample of stores are Included, (3) several market areas are considered simultaneously, (4) various sizes and specified market baskets are employed, (5) sales volumes are recorded over time, (6) alternative publication strategies and news media are considered, (7) various product and market structures are considered, (8) where combinations of control market conditions are examined, and (9) under a range of different publication intervals both continuous and sporadic. The reactions of different kinds of markets to selec tive levels of information may provide a valuable contribution to existing knowledge on how markets perform. While retail food markets may be an appropriate place'to examine the consequence of increased information (high consumer expenditures) the range of market and product types that may be examined is infin ite. Retail drug markets, for example, show some evidence of being deficient in comparative price information. Some price discrimina tion and considerable price dispersion has been identified (See Cady (6) and Engman (12), for example). The lack of adequate information is not necessarily limited to consumer markets. While the factor markets for feed, fuel, ferti lizer, repairs, replacements, and capital are more easily compared because of their homogeneous nature, the probability of. finding con siderable price dispersion may be surprisingly high. A source of price dispersion, for example, is the distance between markets; it 149 costs more to search as the area between market participants increases. Livestock markets in both the United States and Canada are often characterized by considerable price dispersion (14). The following proposals are directed at food retailers, manu facturers, and sellers In general: 1. That food manufacturers and retailers continue to re-examine and improve the quality and quantity of information they provide to the public with respect to the prlce-quality relationships associ ated with perishable products. What the seller can provide and the consumer seems to need is confidence; an awareness and a degree of trust generated in the knowledge that the offer repre sents fair value. In short, the long run profit potential associ ated with higher levels of allocative accuracy may warrant re newed appreciation. 2. That food retailers provide consumers with more price comparative norms for product and store evaluation. For example, advertise a complete food basket that would essentially feed a young family with two children. Not only would such a policy be directed at the majority of the store's future customers, but at those (youn ger) consumers that are likely to react to Improved information, change stores, and to talk about it. An increase in the degree of price stability and better informed loyalty could provide a strong impetus for improved sales in the long run. In addition, the policy would seem to be consistent with a general Improvement in public welfare. (Even a basic basket of 100 products, leaving 150 eight or nine thousand other items for "strategic adjustments", could provide the less affluent or Immobile consumer with con siderable help in stretching their food dollar.) Information collection, analysis, and dissemination has potential implications for several kinds of people Including consumers, private publishers, extension specialists, and the press. To the extent that individuals can cooperate in a com munity effort it Is recommended that consumer groups take the initiative to organize and operate price monitoring programs. One Individual may be assigned one store per week and at the end of the monitoring Interval the prices may be pooled for examina tion. While the time and travel costs per person would be small, the combined benefit may be substantial. Although a change in community shopping habits may or may not change store price levels, a phenomenon largely dependent on the extent of publicity and the quality of the information, individual consumers may benefit through improved store selection decisions. Community Information centers may be established for print ing, distributing, and perhaps publishing information. Private publishing companies do offer advantages in the areas of (1) limited liability, (2) management coordination, and (3) profit sharing among participating shareholders. The press can and does play an important role in educating the public. Certainly the success of this research experiment was heavily dependent upon the excellent cooperation of the news 151* media. To that extent, the media is encouraged to participate in public in£ormatlon programs related to economic conditions in metropolitan communities. Public disclosure of market acti vities can have considerably more impact on the conduct and per formance of neighborhood sellers than individual efforts by pri vate consumers. The critical factor is to publish accurate and honest Information. For educators and extension specialists a challenge exists to inform students, producers, consumers, and market participants in general about the costs of apathy and about the potential power Inherent in information and education to influence indivi dual and collective welfare. APPENDIXES APPENDIX A Specific Food Items Monitored During The Price Study and the Corresponding Price Weights for Each Item, Ottawa-Hull, 1974. A market basket containing 65 food items was designed to adequately represent the major food categories like meat products, fresh fruits and vegetables, major beverages, dairy products in cluding eggs, canned fruits and vegetables, and cooking ingredients like flour and sugar. The corresponding value price weights per product are presented. The price index for hamburger for example, is generated by multiplying the price of hamburger times the price weight .75. APPENDIX A Specific Food Items Monitored During Price Study and the Corresponding Price Weights for Each Item, Ottawa-Hull, 1974. NAME OF STORE: ADDRESS: CITY: DATE: PRODUCT WEIGHT BRAND PRICE WEIGHTS*** 1. Sirloin Steak, bone in 1 lb. Beef 2.88 2. Round Steak, Boneless, (Full Round) 1 lb. Beef 2.12 3. Prime Rib Roast (standing) (1st 4 ribs) 1 lb. Beef 1.32 4. Blade Roast (bone in) 1 lb. Beef 1.04 5. Ground Beef, Hamburger 2 1 % fat 1 lb. Beef 3.00 6. Stewing Beef, fresh boneless 1 lb. T.P.L.* 0.44 7. Beef Liver (fresh) carton 1 lb. T.P.L. 0.32 8. Pork Sausage, fresh 1 lb. ' T.P.L. 0.76 9. Pork Shoulder Roast, bone.in 1 lb. Pork 0.58 10. Pork Chop, centre cut 1 lb. Pork 1.88 11. Bacon 1 lb. Schneider’s or T.P.L. 0.76 12. Bacon 1.1b. P. L. ** 0.76 13. Weiners 1 lb. Maple Leaf or T.P.L. 0.76 14. Bologna 1 lb. P.L. 0.72 IS. Ham, semi-boneless, ready to eat 1 lb. Fresh Whole T.P.L. 1.80 16. Chicken (2-4 lb) whole Grade A fresh 1 lb. T.P.L. 3.00 17. Turkey (12-16 lb) frozen 1 lb. Grade A 1.00 18. Eggs, Grade A medium 1 doz. T.P.L. 1.64 19. Butter 1 lb. Carnation or T.P.L. 2.72 20. Processed Cheese 2 lb. jar Kraft 0.52 21. Mild Cheddar 1 lb. P. L.. 0.80 22. Shortening 1 lb. Crisco or T.P.L. 0.20 *T.P. L. means Top Price Line **P.L. means Private Label or Lowest Price ***The actual weights have been multiplied by a factor of four to overcome rounding errors. A-l (Continued) PRODUCT WEIGHT BRAND PRICE WEIGHTS*** 23. Milk. Homogenized 2% 2 qt. T.P.L. 2.16 24. Margarine 3 lb. Blue Bonnet or T.P.L. 0.40 25. Margarine (vegetable oil) 100% 1 lb. P.L. 0.36 26. Frozen Orange Juice 6 k oz. can P.L. 0.36 27. Ice Cream jfgal. Bearden (Vanilla) or T.P.L. 0.60 28. Ice Cream i gal. P.L. 0.64 29. Apple Juice 48 oz. Allan's or T.P.L. 0.24 30. Tomato Juice 48 oz. Heinz or T.P.L. 0.28 31. Lettuce, fresh each T.P.L. 0.56 32. Potatoes, fresh 10 lb. Canada No. 1 P.L. 0.72 33. Carrots, fresh per 1 lb. 2 lb. 0.40 34. Tomatoes, fresh 4 torn. Canada No. 1 (Cello pak) 0.88 35. Apples, fresh 3 lb. bag P.L. 1.28 36. Oranges, fresh 1 doz. Valencia or Navel(138's) 1.04 37. Tea (orange pekoe) 60 bag pkg. Red Rose or T.P.L. 0.56 38. Regular Grind Coffee 1 lb. Maxwell House or T.P.L. 0.68 39. Instant Coffee 10 oz. Maxwell House or T.P.L. 0.92 40. Instant Chocolate 2 lb. Nestle*s Quick 0.08 41. Peanut Butter (Smooth) 2 lb. jar Kraft or T.P.L. 0.16 42. Peanut Butter (Smooth) 2 lb. jar P.L. 0.16 43. Honey (Creamed) 2 lb. T.P.L. 0.40 44. Jam, Pure Strawberry 24 oz. glass jar Kraft or T.P.L. 0.48 45. Cooking oil (pure vegetable) 32 Oz. Mazola or T.P.L. 0.28 46. Sugar, white granulated 10 lb. T.P.L. 0.96 47. Tomato Catsup 15 oz. Heinz or T.P.L. 0.24 48. Tomato Catsup 15 oz. P.L. 0.24 49. Raisins 15 oz. pkg. Sun Maid or T.P.L. 0.12 50. Flour, pre-sifted, all purpose 10 lb. Robin Hood 0.72 51. Soda Crackers (salted) 16 oz. pkg. Premium 0.32 52. Macroni, dry 16 oz. pkg. Catelli 0.28 SSI TABLE A-l (Continued) PRODUCT WEIGHT BRAND PRICE WEIGHTS*** 53- Kellogg’s Corn Flakes 12 oz. Kellogg’s 0.84 54. Bread (white) 24 oz. P.L. 4.92 55. Skim Milk Powder 3 lb. box Carnation 0.36 56. Pork and Beans 14 oz. can Libby's or T.P.L. 0.32 57. Peaches sliced (fancy) 14 oz. can Del Monte or T.P.L. 0.28 58. Fruit Cocktail (choice) 14 oz. can Del Monte or T.P.L. 0.20 59. Peas, canned (fancy) 14 oz. can Green Giant or T.P.L. 0.40 60. Corn Niblets (fancy) 12 oz. can Green Giant or T.P.L. 0.40 61. Tomatoes, canned 19 oz. can Aylmer or T.P.L. 0.32 62. Vegetable soup 10 oz. can Campbells or T.P.L. • 1.16 63. Solid White Tuna 7 oz. Clover Leaf or T.P.L. 0.16 64. Sockeye Salmon 7 3/4 oz. Clover Leaf or T.P.L. 0.48 65. Soft Drinks, cola flavour 10 oz. can P.L. 2.36 157 A P P E N D I X B A Summary of Price Changes For Individual Retail Food Stores, Ottawa-Hull, 1974. A total of 65 food items were monitored in each store over a period of 26 weeks. If a store changed every price each week of the survey it would have generated 1625 different prices in all. On average, stores changed prices about 43 percent of the time. Meat prices were changed most frequently while the prices of canned goods were relatively more Btable. In Table B-l, the total number of price increases, 1 price decreases, and percentage of price changes is given for each store in the survey. For each firm, the total number of price increases was larger than the number of price decreases. Six individual stores had more price decreases than increases; two IGA store, two Dominion stores, and two Steinberg stores. TABLE B-l A Summary of Price Changes By Store Ottawa -Hull, 1974 ' Total Changes Number Number as a of of Percent Price Price of 1625 Store Area Decreases Increases Prices 1 IGA 0 . East 342 339 42 2 IGA 0.West 416 431 52 Firm 3 IGA 0 . South 325 349 46 Average 4 IGA G.Hull 319 *310 39 43.3 5 IGA Gatineau 291 325 38 6 IGA 0 . South 344 354 43 7 Dominion. O.East 305 315 38 8 Dominion 0.West 304 345 40 Firm 9 Dominion 0 . South 292 322 38 Average 10 Dominion O.West 390 367 47 40.6 11 Dominion G.Hull 303 331 39 12 Dominion O.West 342 344 42 13 Loblaws 0 . East 299 334 39 Firm 14 Loblaws O.West 372 393 47 Average 15 Loblaws 0.West 400 425 51 46.5 16 Loblaws 0 . South 343 368 44 17 A & P 0 .West 355 397 46 Firm Avg 18 A & P 0 . South 305 334 39 42.5 19 S teinbergs O.West 347 338 42 20 Steinbergs 0 . East 300 309 38 Firm 21 SteinbergB O.West 362 367 45 Average 22 S teinbergs O.West 418 399 56 42.1 23 Steinbergs G.Hull 272 308 36 24 Steinbergs 0 . East 290 297 36 25 A.L. RaymondG.Hull 307 358 41 Firm Avg 26 A.L. RaymondGatineau 311 356 41 41.0 Source: Food Prices Review Board Survey Data, 1974. APPENDIX C A History of Store Price Rankings During the Publication and Post Publication Periods of the Survey, Ottava-Hull, 1974. The enclosed tables present the actual store and product comparisons that were published in Ottawa-Hull during September and October, 1974. Additional tables are presented which show how the store ranking positions changed after the publication program was ended. The post informa- tion rankings were not published. TABLE C - 1 Price Information Published During the Week of September 21, Ottawa-Hull, 1974. Weighted Price Index Rank Rank Rank Rani Ottawa West Sept.14 Sept.14 Sept.7 Aug.31 Au&.; Steinbergs 2148 Carling 58.35 1 3 5 7 Dominion Carling & Kirkwood 59.06 2 5 3 2 Steinbergs 1611 Merivale Road 59.09 3 6 4 8 Dominion 1653 Merivale Road 59.20 4 4 1 5 Steinbergs 100 Bayshore 59.28 5 1 6 4 Dominion 1224 Wellington 59.40 6 2 2 1 IGA Richmond & Carleton 61.37 7 9 9 10 Loblaws Carlingwood Mall 62.07 8 8 7 3 Loblaws 1980 Baseline Road 63.08 9 7 8 9 A & P 1855 Carling Ave. 64.05 10 10 10 6 Ottawa South Dominion 1582 Bank 58.89 1 1 1 1 Loblaws 1681 Alta Vista 61.37 2 4 4 2 IGA Bank & Walkley Road 61.90 3 2 5 3 A & P 1525 Bank St. South 62.69 4 3 3 5 Independent Bank & Somerset 63.23 5 5 2 4 Ottawa East Steinbergs St.Laurent Blvd & Mtl Rd 56.25 1 2 2 3 Steinbergs 1944 St.Laurent Blvd. 58.83 2 1 3 4 Dominion St.Laurent Shop. Ctr. 59.54 3 4 1 1 Loblaws St.Laurent Blvd & Mtl Rd 60.88 4 3 5 2 IGA Beachwood Ave 62.13 5 5 4 5 (Continued....) £ TABLE C - 1 (Continued) Weighted Price Index Rank Rank Rank Rank Gatineau-Hull Sept.14 Sept.14 Sept.7 Au r .31 Au r .24 Dominion St.Joseph Blvd Hull 57.71 1 1 1 4 Steinbergs St.Joseph Blvd Hull 59.84 2 2 2 1 A.L.Raymond 210 Champlain Hull 61.76 3 4 4 3 A.L.Raymond Haloney Blvd Gatineau 62.05 4 3 3 2 IGA Maloney Blvd Gatineau 62.49 5 5 5 5 IGA Tache Blvd Hull 66.30 6 6 6 6 Source: Food Prices Review Board Survey Data, 1974. (Continued. 162 TABLE C-l (Continued) The following sample of some of the items being examined provides a comparison between retail chains and groups of stores in the Ottawa-Hull area during the week ending September 14. The chain or group of stores with the lowest average price index per item is listed number one, the next lowest is listed number two, etc. POSITION DURING WEEK ENDING Sept. 14 A&P DOM IGA LOB RAY STB Round steak, boneless 1 lb. 6 1 5 4 3 2 Prime Rib Roast (Standing), 1 lb 5 4 3 1 2 6 Ground beef or hamburger, 1 lb 5 1 4 2 3 2 Beef liver, 1 lb 3 1 2 2 4 2 Pork sausage, fresh, 1 lb 5 3 1 6 4 2 Bacon, private label, 1 lb 3 2 3 5 4 1 Bologna, Maple Leaf or T.P.L.*, 1 lb 2 2 4 3 3 1 Weiners, 1 lb, Maple Leafe or T.P.L. 2 3 4 5 6 1 Chicken (2-4 lb) Whole Grade A 3 2 5 4 1 4 Turkey (8-16 lb) Grade A 2 3 3 1 4 2 Eggs, Grade A medium 5 1 6 2 4 3 Butter, T.P.L. 1 5 3 3 4 2 Milk Cheddar Cheese - Private Label 1 3 5 3 2 4 Milk, Homogenized 25, (2 qts) 4 3 2 4 1 3 Margarine, 3 lbs, Blue Bonnet or T.P.L. 5 2 1 6 3 4 Ice Cream, h gal. Borden (Vanilla) or T.P.L. 2 1 6 5 4 3 Tomato Juice, 48 oz. Heinz or T.P.L. 4 2 2 3 1 2 Potatoes, fresh 10 lbs Canada No. 1 3 4 2 6 5 1 Tomatoes, Fresh 4 tom. Canada No. 1 2 2 1 2 2 2 Tea, 60 bag pkg. T.P.L. 2 4 6 3 5 1 Coffee, 1 lb. Nabob or T.P.L. 2 4 5 3 1 4 Instant Chocolate, 2 lb. Nestle's Quick 2 1 2 1 2 1 Peanut Butter, 2 lb.jar Kraft or T.P.L. 3 2 2 2 2 1 Corn Oil, 32 oz. Mazola, or T.P.L. 4 1 4 2 2 3 Sugar, 10 lb. T.P.L. 6 2 5 4 3 1 Catchup, 15 oz. Heinz or T.P.L. 2 1 1 2 2 1 Flour, 10 lb. Robin Hood 1 1 4 2 3 2 Corn Flakes, 12 oz., Kellogg's 2 2 4 1 5 2 Skim Milk Powder, 3 lbs Carnation 1 1 2 3 2 2 Pork & Beans, 14 oz. Llbbys or T.P.L. 2 1 3 3 2 1 Tomatoes, Canned 19 oz. Aylmer or T.P.L. 2 2 1 3 3 2 Vegetable Soup, 10 oz. Campbells or T.P.L. 2 1 3 1 2 2 *T.P.L. means Top Price Line Source: Food Prices Survey Board Survey Data, 1974. TABLE C - 2 Price Information Published During Week of September 28, Ottawa-Hull, 1974 Weighted Price Index* Rank Rank Rank Rank Ottawa West Sep t .21 Sept. 21 Sept.14 Sept.7 Aug.31 Dominion 1224 Wellington 58.33 1 6 2 2 Steinbergs 100 Bayshore 58.78 2 5 1 6 Dominion Carling & Kirkwood 58.94 3 2 5 3 Steinbergs 1611 Merivale Road 59.00 4 3 6 4 Dominion 1653 Merivale Road 59.39 5 4 4 1 Steinbergs 2148 Carling 60.06 6 1 3 5 IGA Richmond & Carleton 61.10 7 7 9 9 Loblaws Carlingwood Mall 61.16 8 8 8 7 Loblaws 1980 Baseline 62.13 9 9 7 8 A & P 1855 Carling 64.47 10 10 10 10 Ottawa South Dominion 1582 Bank 58.76 1 1 1 1 Loblaws 1681 Alta Vista 61.08 2 2 4 4 IGA Bank & Somerset 62.77 3 5 5 2 A & P 1525 Bank 62.92 4 4 3 3 IGA Bank & Walkley Road 63.28 5 3 2 5 Ottawa East Steinbergs St.Laurent Blvd & Mtl.Rd.58.27 1 1 2 2 Steinbergs 1944 St.Laurent Blvd 59.18 2 2 1 3 Dominion St. Laurent Shopping Ctr.59.21 3 3 4 1 Loblaws St.Laurent Blvd & Mtl Rd 60.43 4 4 3 5 IGA Beachwood Avenue 62.91 5 5 5 4 (Continued*. TABLE C-2 (Continued) Weighted Price Index* Rank Rank Rank Rank Gatineau-Hull S e p t .21 Sep t .21 Sept.14 Sept.7 Aug.31 Dominion St.Joseph Blvd Hull 57.58 1 1 1 1 Steinbergs St.Joseph Blvd Hull 59.60 2 2 2 2 A. L.Raymond Maloney Blvd Gatineau 60.90 3 4 3 3 A. L.Raymond 210 Champlain Hull 61.47 4 3 4 4 IGA Maloney Blvd Gatineau 63.50 5 5 5 5 IGA Tache Blvd Hull 67.80 6 6 6 6 *Thls index is not in dollars. Differences between numbers indicate relative variations in the cost of the weighted food basket in stores. Source: Food Prices Review Board Survey Data, 1974. 165 TABLE C-2 (Continued) The following sample of some of the Items being exa mined provides a comparison between retail chains and groups of stores in the Ottawa-Hull area during the week ending September 21. The chain or group of store with the lowest average price index per item is listed number one, the next lowest is listed number two, etc. POSITION DURING WEEK ENDING Sept. 21 A&P DOM IGA EOB RAY STB Round steak, boneless 1 lb. 6 1 5 4 3 2 Prime Rib Roast (standing), 1 lb. 5 4 1 3 2 6 Ground beef or hamburger, 1 lb. 5 1 4 3 5 2 Beef liver, 1 lb. 5 1 2 3 4 2 Pork sausage, fresh, 1 lb. 3 1 5 6 4 2 Bacon, private label, 1 lb 4 2 3 5 4 1 Bologna, private label, 1 lb. 1 2 4 3 5 2 Weiners, 1 lb. Maple Leaf or T.P.L.* 4 3 6 5 1 2 Chicken (2-4 lb) Whole Grade A 5 2 3 4 1 4 Turkey (8-16 lb) Grade A 4 1 6 5 3 2 Eggs, Grade A medium 5 1 6 2 4 3 Butter, T.P.L* 1 5 6 4 3 2 Mild Cheddar Cheese, private label 1 4 2 3 4 3 Milk, Homogenized 25, (2 qts.) 4 2 2 4 1 3 Margarine, 3 lbs. Blue Bonnet or T.P. L . 6 4 2 3 1 5 Ice Cream gal. Borden (Vanilla) or T.P.L. 1 1 5 4 3 2 Tomato Juice, 48 oz. Heinz or T.P.L. 4 2 3 3 1 3 Potatoes, fresh 10 lbs. Canada No. 1 4 1 2 5 ’ 3 2 Tea, 60 bag pkg. T.P.L. 1 2 5 3 4 2 Coffee, 1 lb. Nabob, or T.P.L. 4 2 2 3 1 2 Instant Chocolate, 2 lb. Nestle's Qulck2 1 3 1 2 1 Peanut Butter, 2 lb. jar Karft or T.P .L3 2 1 2 1 2 Corn Oil 32 oz Mazola or T.P.L. 2 1 3 1 4 1 Sugar 10 lb. T.P.L. 5 3 6 1 4 2 Catsup 15 oz. Heinz or T.P.L. 1 1 1 1 1 1 Flour, 10 lb. Robin Hood 4 1 5 3 4 2 Corn Flakes 12 oz. Kellogg's 1 1 2 1 1 1 Skim Milk Power, 3 lbs. Carnation 4 3 5 1 2 4 Pork 6*Beans 14 oz. Libby's or T.P.L. 3 2 4 4 3 1 Tomatoes, canned 19 oz. Aylmer or T.P.L. 3 2 2 2 2 1 Vegetable Soup 10 oz. CampbellB or T.P.L. 2 1 3 2 2 2 *T.P.L. means Top Price Line Source: Food Prices Review Board Survey Data, 1974. TABLE C - 3 Price Information Published during the Week of October 5, Ottawa-Hull, 1974. Weighted Price Index* Rank Rank Rank Rank Ottawa West Sept.28 Sept.28 Sept.21 Sept.14 Sept.7 Steinbergs 100 Bayshore 58.24 1 2 5 1 Dominion 1653 Merivale Road 58.42 2 5 4 4 Steinbergs 1611 Merivale Road 58.67 3 4 3 6 Dominion 1224 Wellington 58.83 4 1 6 2 Dominion Carling & Kirkwood 58.94 5 3 2 5 Steinbergs 2148 Carling 59.05 6 6 1 3 A & P 1855 Carling 59.25 7 10 10 10 Loblaws Carlingwood Mall 60.41 8 8 8 8 Loblaws 1980 Baseline 61.02 9 9 9 7 IGA Richmond & Carleton 61.43 10 7 7 9 Ottawa South Dominion 1582 Bank 58.92 1 1 1 1 IGA Bank & Somerset 60.59 2 3 5 5 A & P 1525 Bank 60.73 3 4 4 3 Loblaws 1681 Alta Vista 62.27 4 2 2 4 IGA Bank & Walkley Road 63.42 5 5 3 2 Ottawa East Steinbergs St.Laurent Blvd & Mtl Rd 58.47 1 1 1 2 Steinbergs 1944 St.Laurent Blvd 58.86 2 2 2 1 Dominion St. Laurent Shopping Ctr.59.39 3 3 3 4 Loblaws St.Laurent Blvd & Mtl Rd 60.50 4 4 4 3 IGA Beachwood Avenue 60.71 5 5 5 5 as 0* (Continued....) TABLE C-3 (Continued) Weighted Price Index* Rank Rank Rank Rank Gatineau-Hull Sept.28 Sept.28 Sept.21 Sept.14 Sept.7 Dominion St.Joseph Blvd. Hull 58.27 1 1 1 1 A.L.Raymond Maloney Blvd. ,.Gatineau 58.40 2 3 4 3 Steinbergs St.Joseph Blvd, Hull 58.56 3 2 2 2 A.L.Raymond 210 Champlain, Hull 58.73 4 4 3 4 IGA Tache Blvd. Hull 61.24 5 6 6 6 IGA Maloney Blvd. Gatineau 62.77 6 5 5 5 *This index is not in dollars. Differences between numbers indicate relative variations in the cost of the weighted food basket in stores. Source: Food Prices Review Board Survey Data, 1974. 168 TABLE C-3 (Continued) The following sample of some of the items being exa mined provides a comparison between reaail chains and groups of stores in the Ottawa-Hull area during the week ending September 28. The chain or group of stores with the lowest average price index per item is listed number one, the next lowest is listed number two, etc. POSITION DURING WEEK ENDING Sept. 28 A&P DOM IGA LOB RAY STB Round steak, boneless 1 lb. 3 2 6 5 4 1 Prime Rib Roast (Standing), 1 lb. 4 3 5 1 2 6 Ground Beef or hamburger, 1 lb. 2 2 3 4 I 2 Beef liver, 1 lb. 2 2 3 5 I 4 Pork sausage, fresh, 1 lb. 4 2 5 6 1 3 Bacon, private label, 1 lb. 6 4 5 3 2 1 Weiners, 1 lb. Maple Leaf or T.P.L.* 2 3 4 4 1 2 Bologna, private label, 1 lb. 1 4 6 2 5 3 Chicken (2-4 lbs.) Whole Grade A 6 1 4 5 2 3 Turkey (10-16 lbs.) Grade A 2 2 4 I 3 2 Eggs, Grade A medium 5 2 6 3 I 4 Butter, T.P.L. 4 5 6 3 1 2 Mild Cheddar Cheese, private label 2 4 3 5 1 6 Milk, Homogenized 2%, (2 qts.) 6 5 3 2 I 4 Margarine, 3 lbs. Blue Bonnet or T.P.L .2 3 2 2 1 3 Ice Cream, Hi gal. Borden (Vanilla) or T.P.L. 2 I 6 5 4 3 Tomato Juice, 48 oz. Heinz or T.P.L. 2 2 2 3 2 1 Potatoes, fresh, 10 lbs. Canada No. 1 1 6 5 3 2 4 Tea, 60 bag pkg. T.P.L. 1 2 3 I 1 1 Coffee, 1 lb. Maxwell House or T.P.L. 2 4 5 3 1 2 Instant Chocolate, 2 lbs. Nestle's Quick 2 1 1 1 1 1 Peanut Butter, 2 lb. jar Kraft or T.P.L. 4 3 2 3 1 3 Corn Oil, 32 oz. Mazola or T.P.L. 2 1 3 I 4 2 Sugar, 10 lbs. T.P.L. 1 5 2 3 4 5 Catsup, 15 oz. Heinz or T.P.L. 1 2 3 3 1 2 Flour, 10 lbs. Robin. Hood 1 3 5 2 4 3 Corn Flakes, 12 oz. Kellogg's 3 2 4 3 1 3 Skim Milk Powder, 3 lbs. Carnation I 4 4 3 2 4 Pork & Beans, 14 oz. Libby's or T.P.L. 3 3 3 4 2 1 Tomatoes, Canned 19 oz. Aylmer or T.P.L. 1 2 3 2 1 2 Vegetable Soup, 10 oz. Campbells or T.P.L. 2 2 3 2 1 2 *T.P.L. means Top Price Line Source: Food Prices Review Board Survey Data, 1974. TABLE C - 4 Price Information Published During the Week of October 12, Ottawa-Hull, 1974 Weighted Price Index* Rank Rank Rank Rank Ottawa West Oct.5 Oct. 5 Sept.28 Sept.21 Sept.14 Dominion 1224 Wellington 56.38 1 4 1 6 Dominion 1653 Merivale 56.46 2 2 5 4 Steinbergs 5101 Richmond (Baysh.) 56.56 3 1 2 5 Dominion Carling & Kirkwood 56.83 4 5 3 2 Loblaws Carllngwood Mall 57.51 5 8 8 8 Steinbergs 1611 Merivale 57.95 6 3 4 3 Loblaws 1980 Baseline 58.07 7 9 9 9 Steinberg 2148 Carling 58.34 8 6 6 1 A & P 1855 Carling 58.87 9 7 10 10 IGA Richmond & Carleton 60.23 10 10 7 7 Ottawa South Dominion 1582 Bank 56.75 1 1 1 1 Loblaws 1681 Alta Vista 58.10 2 4 2 2 A & P 1525 Bank 59.54 .3 3 4 4 IGA Bank & Walkley Road 60.19 4 5 5 3 IGA Bank & Somerset 60.73 5 2 3 5 Ottawa East Dominion St.Laurent Shop. Ctr. 57.27 1 3 3 3 Loblaws St.Laurent & Mtl Rd 57.36 2 4 4 4 Steinbergs 1944 St.Laurent Blvd 57.76 3 2 2 2 Steinbergs St. Laurent & Mtl Rd 58.00 4 1 1 1 IGA Beachwood Avenue 58.77 5 5 5 5 (Continued....) TABLE C-4 (Continued) Weighted Price Index* Rank Rank Rank Rank Catineau-Hull Oct. 5 Oct.5 Sept.28 Sept.21 Sept.14 Dominion St. Joseph Blvd. Hull 55.98 1 1 1 1 A.L.Raymond 210 Champlain, Hull 57.47 2 4 4 3 Steinbergs St.Joseph Blvd. Hull 58.15 3 3 2 2 IGA Maloney Blvd. Gatineau 58.17 4 6 5 5 A.L.Raymond Maloney Blvd. Gatineau 58.47 5 2 3 4 IGA Tache Blvd. Hull 60.90 6 5 6 6 *This index is not in dollars. Differences between numbers Indicate relative variations in the cost of the weighted food basket in stores. Source: Food Prices Review Board Survey Data, 1974. 171 TABLE C-4 (Continued) The following sample of some of the Items being exa mined provides a comparison between retail chains and groups of stores in the Ottawa-Uull area during the week ending October 5. The chain or group of stores with the lowest average price index per item is listed number one, the next lowest is listed number two, etc. POSITION DURING WEEK ENDING Oct. 5 A&PDOM IGA LOB RAY S. Round steak,boneless 1 lb. 6 1 4 3 5 2 Prime Rib Roast (Standing), 1 lb. 3 2 5 1 4 6 Ground beef or hamburger, 1 lb. 2 2 3 2 1 2 Beef liver, 1 lb. 3 1 1 1 1 2 Pork sausage, fresh, 1 lb. 4 3 3 2 1 1 Bacon, private label, 1 lb. 1 4 5 3 2 Weiners, 1 lb. Maple Leaf or T.P.L.* 3 4 3 1 2 3 Bologna, private label, 1 lb. 1 5 4 6 2 Chick n. (2-4 lbs.) Whole Grade A 5 3 1 2 2 4 Turkey (10-16 lbs.) Grade A** Eggs, Grade A medium 1 3 5 6 2 4 Butter, T.P.L. 4 2 6 5 1 3 Mild Cheddar Cheese, private label 6 5 3 1 4 Milk, Homogenized 2%, (2 qts.) 1 2 2 3 2 3 Margarine, 3 lbs* Blue Bonnet or T.P.L. 1 3 4 2 3 3 Ice Cream, gal. Borden (Vanilla) or T.P.L. 1 2 6 5 4 3 Tomato Juice, 48 oz. Heinz or T.P.L. 2 2 4 1 3 Potatoes, fresh, 10 lbs. Canada No. 1 1 5 6 4 3 2 Tea, 60 bag pkg. T.P.L. 1 4 1 2 5 3 Coffee, 1 lb. Maxwell House or T.P.L. 1 2 3 1 1 1 Instant Chocolate, 2 lbs. Nestle's Quick 5 3 2 4 1 3 Peanut Butter, 2 lb. jar Kraft or T.P.L. 5 3 2 4 1 4 Corn Oil, 32 oz. Mazola or T.P.L. 1 4 4 2 5 3 Sugar, 10 lbs. T.P.L. 1 4 2 4 3 5 Catsup, 15 oz. Heinz or T.P.L. 1 3 4 4 2 4 Flour, 10 lbs. Robin Hood 1 2 4 5 3 2 Corn Flakes, 12 oz. Kellogg's 3 2 2 3 1 4 Skim Milk Powder, 3 lbs. Carnation 1 4 5 3 2 6 Pork 6 Beans, 14 ox. Libby's or T.P.L. 1 3 4 1 2 1 Tomatoes, canned 19 oz. Aylmer or T.P.L. 1 3 2 4 2 4 Vegetable Soup, 10 oz. Campbells or T.P.L. 1 2 2 2 2 2 *T.P.L. means Top Price Line **Deleted for reasons of availability Source: Food Prices Review Board Survey Data, 1974. TABLE C - 5 Price Information Published During the Week of October 19* Ottava-Hull, 1974 Weighted Price Index* Rank Rank Rank Rank Ottawa West Oct. 12 Oct.12 Oct. 5 Sept.28 Sept.21 A&P 1855 Carling Ave. 57.92 1 9 7 10 Dominion 1673 Merivale Rd. 57.97 2 2 2 5 Dominion Carling & Kirkwood 58.05 3 4 5 3 Dominion 1224 Wellington St. 58.21 4 1 4 1 Steinbergs 5101 Richmond Rd. 58.34 5 3 1 2 Steinbergs 1611 Merivale Rd. 58.39 6 6 3 4 Steinbergs 2148 Carling Ave. 58.63 7 8 6 6 Loblaws Carlingwood Mall 58.67 8 5 8 8 Loblaws 1980 Baseline Rd. 58.75 9 7 9 9 IGA Richmond & Carleton 58.89 10 10 10 7 Ottawa South IGA Bank & Somerset 58.66 1 5 2 3 Dominion 1582 Bank St. 58.84 2 1 I 1 IGA Bank & Walkley Rd. 59.41 3 4 5 5 A&P 1525 Bank St. South 59.56 4 3 3 4 Loblaws 1681 Alta Vista 59.58 5 2 4 2 Ottawa East Dominion St.Laurent Shop.Ctr. 57.98 1 1 3 3 Steinbergs 1944 St.Laurent Blvd. 58.01 2 3 2 2 Steinbergs St.Laurent & Mtl. Rd. 58.09 3 4 1 I Loblaws Mtl. Rd. & St.Laurent 59.03 4 2 4 4 IGA Beachwood Avenue 59.04 5 5 5 5 (Continued. TABLE C-5 (ConCinued) Weighted Price Index* Rank Rank Rank Rank Gat ineau-Hull Oct. 12 Oct. 12 Oct. 5 Sept. 28 Sept. 21 A.L.Raymond Maloney Blvd., Gatineau 56.37 1 4 2 3 A.L.Raymond Champlain St.t Hull 56.47 2 2 4 4 Dominion St.Joseph Blvd., Hull 57.62 3 2 2 2 Steinbergs St.Joseph Blvd., Hull 58.19 4 3 3 2 IGA Tache Blvd., Hull 58.82 5 6 5 6 IGA Maloney Blvd., Gatineau 59.18 6 5 6 3 *This index is not in dollars. Differences between numbers indicate relative variations in the cost of the weighted food basket in stores. Source: Food Prices Review Board Survey Data, 1974. 174 TABLE C-5 (Continued) The following sanple of some of the Items being examined provides a comparison between retail chains and groups of storeB In the Ottawa-Uull area during the week ending October 12. The chain or group of stores with the lowest average price Index per Item Is listed number one, the next lowest Is listed number two, etc. POSITION DURING WEEK ENDING Oct. 12 A&PDOM IGA LOB RAY ST1 ■ ■ ■ 1 “ Round steak, boneless, 1 lb. 1 3 2 4 2 4 Prime Rib Roast, 1 lb. 5 2 5 1 4 3 Ground been or hamburger, 1 lb. 3 3 1 3 2 3 Beef liver, 1 lb. 3 2 4 3 1 5 Orange Juice, frozen, 6k oz. 1 1 1 1 1 1 Bacon, private label, 1 lb. 5 2 4 5 1 3 Weiners, 1 lb. Maple Leaf or T.P.L.* 1 2 2 2 2 2 Macaroni, dry, 16 oz. 1 3 3 4 2 3 Chicken (2-4 lbs.) Whole Grade A 4 3 1 2 2 5 Turkey (10-16 lbs.) Grade A 4 5 1 2 3 3 Eggs, Grade A medium 1 2 3 4 1 5 Butter, T.P.L. 4 2 6 5 1 3 Mild Cheddar Cheese, private label 3 4 5 2 1 3 Milk, homogenized 2Z, (2 qts.) 2 3 1 3 2 3 Margarine, 3 lbs. Blue Bonnet or T.P.L. 2 2 2 2 1 3 Ice Cream, k gal. Borden (Vanilla) or T.P.L. 1 1 3 1 2 2 Tomato Juice, 48 oz. Heinz or T.P.L. 2 2 2 2 1 2 Corn, Niblets, fancy, 12 oz. 1 2 2 2 2 2 Tea, 60 bag pkg. T.P.L. 1 2 1 1 1 1 Coffee, 1 lb. Mazwell House or T.P.L. 1 1 1 1 1 1 Instant Chocolate, 2 lbs. Nestle's Quick 1 1 1 1 1 1 Peanut Butter, 2 lb. Jar Kraft or T.P.L • X 2 1 1 1 2 Corn Oil, 32 oz. Mazola or T.P.L. 3 2 2 1 3 Sugar, 10 lbs. T.P.L. 3 5 2 4 1 6 Catsup, 15 oz. Heinz or T.P.L. 1 2 3 1 1 3 Flour, 10 lbs. Robin Hood 3 2 2 2 1 Corn Flakes, 12 oz. Kellogg's 1 2 3 3 2 3 Skim Milk Powder, 3 lbs. Carnation 1 2 3 2 2 2 Pork & Beans, 14 oz. Libby's or T.P.L. 3 4 2 1 2 Tomatoes, canned 19 oz. Aylmer or T.P.L • X 2 2 3 2 3 Vegetable Soup, 10 oz. Campbelle or T.P.L. 1 3 4 3 2 3 *T.P.L. means Top Price Line Source: Pood Prices Review Board Survey Data, 1974 TABLE C - 6 Price Information Collected But Not Published Week of October .19» Ottawa-Hull, 1974 Weighted Price Index Rank Rank Rank Rank Ottawa West Oct. 18 Oct. 18 Oct. 12 Oct. 5 Sept. A&P 1855 Carling Ave. 56.58 1 1 9 7 Dominion 1224 Wellington St. 56.83 2 4 1 4 Dominion Carling and Kirkwood 57.03 3 3 4 5 Dominion 1653 Merivale Road 57.23 4 2 2 2 Steinbergs 5101 Richmond Road 57.93 5 5 3 1 Loblaws 1980 Baseline Road 58.42 6 9 7 9 Steinbergs 1611 Merivale Road 58.81 7 6 6 3 Steinbergs 2148 Carling Avenue 58.82 8 7 8 6 Loblaws Carllngwood Mall 58.84 9 8 5 8 IGA Richmond & Carleton 60.07 10 10 10 10 Ottawa South Dominion 1582 Bank Street 57.33 1 2 1 1 A&P 1525 Bank Street 58.72 2 4 3 3 IGA Bank & Somerset 59.60 3 1 5 2 IGA Bank & Walkley 60.20 4 3 4 5 Loblaws 1681 Alta Vista 60.93 5 5 2 4 Ottawa Bast Dominion St.Laurent Shop. Ctr. 57.12 1 1 1 3 Steinbergs 1944 St.Laurent Blvd. 57.58 2 2 3 2 Steinbergs St.Laurent & Mtl. Rd. 58.10 3 3 4 1 IGA Beechwood Avenue 58.73 4 5 5 5 Loblaws Mtl. Rd. & St.Laurent 59.30 5 4 2 4 (Continued...) TABLE C - 6 (Continued) Weighted Price Index Rank Rank Rank Rank Gatineau-Hull Oct. 18 Oct. Oct. 12 Oct. 5 Sept. 28 IGA Tache Blvd., Hull 55.60 1 5 6 5 A.L.Raymond Champlain St. Hull 57.48 2 2 2 4 Dominion St.Joseph Blvd., Hull 57.56 3 3 1 1 A. L.Raymond Maloney Blvd., Gatineau 57.79 4 1 4 2 Steinbergs St.Joseph Blvd., Hull 58.67 5 4 3 3 IGA Maloney Blvd., Gatineau 59.43 6 6 5 6 Source: Food Prices Review Board Survey Data, 1974 O' TABLE C - 7 Price Information Collected But Not Published, Week of October 26, Ottawa-Hull, 1974 Weighted Price Index* Rank Rank Rank Rank Ottawa West Oct. 26 Oct. 26 Oct. 19 Oct. 12 Oct. 5 Dominion 1224 Wellington 56.66 1 2 4 1 Dominion 1653 Merivale 57.05 2 4 2 2 Steinbergs 1611 Merivale 57.38 3 7 6 6 Steinbergs 2148 Carling 58.08 4 8 7 8 Steinbergs 5101 Richmond 58.30 5 5 5 3 Dominion Carling & Kirkwood 58.36 6 3 3 4 Loblaws Carllngwood Mall 59.18 7 9 8 5 A&P 1855 Carling 59.47 8 1 1 9 Loblaws 1980 Baseline 59.62 9 6 9 7 IGA Richmond & Carleton 60.28 10 10 10 10 Ottawa South Dominion 1582 Bank 57.31 1 1 2 1 IGA Bank & Walkley 59.55 2 4 3 4 Loblaws 1681 Alta Vista 59.55 3 5 5 2 A&P 1525 Bond 59.84 4 2 4 3 IGA Bank & Sommerset 60.33 5 3 1 5 Ottawa East Dominion St. Laurent Shop. Ctr. 57.10 1 1 1 1 Steinbergs St. Laurent & Mtrl. Rd. 57.32 2 3 3 4 Steinbergs 1944 St. Laurent 57.57 3 2 2 3 Loblaws St. Laurent & Mtrl. Rd. 59.06 4 5 4 2 IGA Beechwood Ave. 59.46 5 4 5 5 (Continued...) TABLE C-7 (Continued) Weighted Price Index* Rank Rank Rank Rank Gat ineau-Hull Oct. 26 Oct. 26 Oct. 19 Oct. 12 Oct. 5 IGA Tache Blvd. 55.24 1 1 5 6 Dominion St. Joseph Blvd. 56.29 2 3 3 1 Steinbergs St. Joseph Blvd. 57.34 3 5 4 3 A.L.Raymond Gatineau 57.38 4 4 1 4 A.L.Raymond Hull 57.89 5 2 2 2 IGA Maloney Blvd., Gatineau 58.95 6 6 6 5 *This index is not in dollars. Differences between numbers indicate relative variations in the cost of the weighted food basket in stores. Source: Food Prices Review Board Survey Data, 1974. TABLE C-8 Price Information Collected But Not Published, Week of November 30, Ottawa-Hull, 1974 Weighted Price Index Rank Rank Rank Rank Ottawa West Nov. 30 Nov. 30 Nov. 23 Nov. 9 Nov. 2 Dominion 1224 Wellington 59.45 1 1 4 3 Dominion Carling & Kirkwood 59.69 2 2 5 5 Dominion 1653 Merivale 59.84 3 5 2 1 Loblavs 1980 Baseline 61.03 4 9 7 10 Loblaws Carlingvood Mall 61.35 5 10 8 9 Steinbergs 100 Bayshore 61.02 6 6 1 2 Steinbergs 2148 Carling 61.73 7 7 3 7 Steinbergs 1611 Merivale 62.14 8 4 6 6 A&P 1855 Carling Ave. 62.47 9 3 9 7 IGA Richmond & Carleton 62.80 10 8 10 8 Ottawa South Dominion 1582 Bank 59.60 1 1 1 2 Loblaws 1681 Alta Tista 61.20 2 5 2 4 IGA Bank & Walkley Rd. 63.24 3 2 4 1 IGA Bank & Somesset 63.89 4 3 5 5 A&P 1525 Bank St. 64.10 5 4 3 3 Ottawa East Dominion St.Laurent Shop.Ctr. 59.60 1 2 1 2 Loblaws St.LaurentBlvd.& Mtrl.Rd.60.94 2 4 4 4 Steinbergs St.Laurent Blvd.&Mtrl.Rd.61.03 3 1 2 1 Steinbergs 1944 St.Laurent Blvd. 62.74 4 3 3 3 IGA Beechvood Ave, 63.82 5 5 5 5 (Continued...) lO TABLE C - 8 (Continued Weighted Price Index Rank Rank Rank Rank Gatineau-Hull Nov. 30 Nov. 30 Nov. 23 Nov. 9 Nov. 2 Dominion St.Joseph Blvd.Hull 58.79 1 1 1 2 A.L.Raymond 210 Champlain Hull 61.11 2 5 5 4 Steinbergs St.Joseph Blvd.Hull 61.69 3 2 2 1 A.L.Raymond Maloney Blvd. Gatineau 62.68 4 4 3 3 IGA Maloney Blvd. Gatineau 64*53 5 3 4 5 Source: Food Prices Review Board Survey Data, 1974. APPENDIX D The Questionnaire Employed in the Pre and Post Test Consumer Surveys, Ottawa-Hull and Winnipeg, 1974• The first questionnaire, D-l, was used in both Ottawa-Hull and Winnipeg during the pretest survey. The same questionnaire was sent to both the test and the control markets. The post test questionnaire presented is the one used in the Ottawa-Hull survey. The Winnipeg questionnaire was similar to the Ottawa questionnaire except for six specific questions in the Ottawa survey about the publication program. 182 Feed Print Review Boerd, APPENDIX D-l Contuner Questionnaire Used P.O. Bos 1640, In the Pretsst Survey, July, Station B, 1974. Ottawa, Ontario. KIP SZB Sunny of Conwmsr Satltfaetion. Dear Hr./Mrs. This questionnaire la In response'to our earlier telephone call. Thank you very much for agreeing to cooperate with the Food Prices Review Board by participating in our survey. Vour response is important to ua aa it will help round out an accurate description of consumer satisfaction with food purchases. The survey is about your satisfaction or dissatisfaction with food products, the way they are sold In stores and markets, and how wall the food Industry satisfies consumers. There are no right or wrong answersi we just want to know what you think. Host of the questions can be answered by drawing a circle around a letter or number nest to the answor that best describes your feelings. For examplei How satisfied are you with the weather in your area? ALWAYS ALMOST ALWAYS SOMETIMES RARELY NEVER SATISFIED______SATISFIED______SATISFIED SATISFIED SATISFIED A B ^ D E The circle above would indicate that you are sometimes satisfied# and sometimes not satisfied. The questionnaire should be completed by the person who does most of the food buying for your household. All your answers will be confidential and will be used only to make statistical suraariea of answers from everyone in the survey. When you have completed the questionnaire, please return it in the self- addressed envelope as soon as possible. We hope you will enjoy giving us your opinion. If you hav-t any questions about the survey, please call collect at (611) Sincerely Grant Devine, Survey Specialist. 183 PART 1 YOUR OVERALL FEELINGS ABOUT FOOD PRODUCTS AND FOOD STORES ■ ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATIIIIID SATIWIIO SATISFIED SATISFIED COI FOODPRODUCTS 1, All In all, how latlifltd in you with th* food product! to'd In thi itorei In your or*!? A 8 c D E Pl«w circle tho litttr thit com** down to your fttllngi. R u n ekdo tho to ttor that comn do m t to tho wing how ttt/dkd you *f* each with o f tho following ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 2. Tha Information on label* oltini, bolt In and packaya* about Ingridlifltiof food product* A 8 c D E 3, Thi tellabllity and truthlulniu of Information In adi iponiorid by manufacturers of food product! (Including adi in rtawipaptri, m*ge> liriti, radio and TV) A 8 c D E 4. Th* Information on labalt ol cam, bottlt i and packagaa about lha nutritional value of food product! A 8 c D E ALMOIT ALWAYS ALWAYS SOMETIMES RARELY NEVIR SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED FOODSTORES ■ \5. On the whole, how Mtiitlid ara you ( with tha food ttorat in your ariaf A 8 c 0 E ' Pluia circle tha littar tint comai dom t to your feeling*. Pit*it clrdt tho lottor that comai dom t to ihomlng how u t l t Moro youwith ttch of tho following ALMOIT ALWAYS ALWAYS SOMETIMES RARELY NEVER s a tisfie d a«Tiiriio s a tis fie d SATISFIED SATISFIED S. Tha pt tea Inlormatlon availsbla to you In food store*. A 8 c D E 7. Tha riliibllity and trulhfulnm of In'ormstlon In adi tponiortd by food itortt. A 8 c D E 8. Tha inlormatlon about frtihnm of parlihabla food nroducti that it available to you In lood ttorn A 8 c D E 1 184 PART 2 YOUR FEELINGS ABOUT SOME GROUPS OF FOOD PRODUCTS Plate clrde tfit letter thst comet domt to thowlng how utitiled you ato with ooe/i of tho following product catagorle*. Oontldor tho product category at a whole, rather than intlMdUalpttducu within tho category. ALMOST ALWAYS ALWAVS BOMSTIMIS AANILY NIVCA SATtlPIID SATtMIID •ATISFIID SATISFIIO SATISFIID 0. MEAT AND POULTRY (For axamplt: bool, pork, chkktn, and 10 on) AB c D E ft tO. DAIRY PRODUCTS AND EOOS IFor axamplt: milk, butter, chtttt, eggi,andwon) A B c O E 10 11. BAKERY AND CEnEAL PRODUCTS (For txtmplt: brtad, cake mixtt, cooklat, caraal and to on) A B c D E 11 12. FRESH FRUITS • * r " " (For exempli: applet, orangat, pteri, pt achat, and to on) A B c D E 12 13. FRESH VEOETABLES (For txamplt: potato*t, tomato**, Httuca,and toon) A B c D E 13 14. PROCESSED FRUITS AND 1 ' VEOETABLES (For taamplt; canntd or froaan vtgttablat, Iruitt, fruit iulcat, and won) AB c D E 14 IS. PREPARED OR CONVENIENCE FOOO (For taamplt: TV dinntrt, raady-to- tat poddingi, baby (ood, canntd toupt, and to on) A B c D EIS THE NEXT FEW PAOES CONTAIN ADDITIONAL QUESTIONS ABOUT SOME OF TH ESE SAME PRODUCT GROUPS. a 185 PART 3 i I BAKERY AND CEREAL PRODUCTS St LOOM NEVER BREAD How often do you buy Bread? > 1 ! B c IB fltotte c/ref* a far ter. 4 II you never buy bread, olttte eos to the neat product. ALMOST ALWAYS ALWAYS SOMETIMES BASELY NEVER SATISFIEO SATISFIED SATISFIED SATISFIEO SATISFIEO 'Is. In gineret, how tatlifled are you with the bread you buy? A B c D E 17 Pittm c/rcAr # kttor. 1b. Ii the brand of bread you utually buy a manufacturer'* brand or a ttora brand (private label)? Pitaaa clrcf* one number 1 Manufacturer's brand 2 Storebrand 3 Other 4 Don't know 18 P k i» eircb the fetter (her cometckm tt to tfwwAtf howuihfkd you or* with each of theM lo ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 1c. Frcihnenot the breed A B C D E IB Id. Selactlon of bread available where you ihop A B C D E 20 te. Price A B c D . E 21 If. Packaging A B c D E 22 1g. Nutritional value A B c D G 23 1h. Tatte A B c D E 24 OFTEN SELDOM NEVER READY-TO-EAT How often do you buy ready-to-eat BREAKFAST CEREALS breakfatt cereali? P kii* clnft a htttr. A B c 28 If you never buy ready-to-eat brMkfut eareati pleeie go on to the nest product. ALMOST AlWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIED 2a. In central, how satisfied arc you with Die ready-to-eat breakfatt cereali you A B c D . E 28 buy? P lttit eirch a Inter. Ptom cirth the farcer rher come*c lo m t to tho **ng how utltlitd you ane witft each of thefoi/owing: ALMOST ALWAVS ALWAYS SOMETIMES RARELY NEVER SATISFIEO SATISFIEO SATISFIEO SATISFIED SATISFIEO 2b. Packaging of breakfast cereali AB c 0 E 27 2c. Taut A B c D E 23 2d. Nutritional value A B c D E 79 2e. Prlco A B c D E 30 2f. Selection of ready-to-eat brcakfait - cereali available where you shop A B c DE 31 3 186 OF UN •■LOOM NEVER FRESH BANANA! How often do you buy freth benanat? - A B c 47 PittitdrOt a Ittttr, If you never buy freih bananas ptoeu to on to the next product. ALMOST ALWAYS ALWAVS SOMETIMES RARELY NEVER SATISFIEO SATISFIEO SATISFIEO SATISFIED SATISFIEO 3*. In general, how aatltfled are with the freth bim m i you buy? ^ B c D E 48 Phase circle a Ittttr, • Plena circle the tatter that comet dotest to thawing how satisfied yoo ere with each of the following; ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER 4 gATISFIED SATISFIED SATISFIEO SATISFIEO SATISFIEO 3b. Tut* A B CD E 40 3c. Price A B C 0 E 60 3d. Appjirance A B c 0 E 61 3t. Selection of freth benanaiivelleble whire you ihop A 6 c 0 E 52 3f, Packaging of fieth benanat A 8 c 0 E 53 PART 5 FRESH VEGETABLES OFTEN SELDOM NEVER FRESH TOMATOE! How often do you buy fresh tomatoes? A B C 64 Phase circle Heifer.a H you Must buy fresh tomatoes please go on to the neat product. ALMOST ALWAYS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 1*. Ingenerel, how titltfltd are you with the freth tometoei you buy F A B c D E 55 Pltesa circle a Ittttr. Phase circle the Ittttr that comat cloteat to showing how satisfied you are with each of the following; ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIEO lb. Taite of the Ireth tomatoes AB c D E 55 Ic. Price AB c 0 E 67 Id. Ripeness AB c 0 E 58 1e. Appearance A B c D E 59 If. Packaging A B c D E 60 1g. Availability of lomatoet during the year at stores where you shop A B c D E 61 t 187 PART 4 FRESH FRUITS OFTEN SELOOM NEVER FRESH APPLES How often do you buy fresh apple*} A B C 32 Ptuucircles letter. If voti never buy Irath aoolat olaaaa do on to the next product. ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIEO SATISFIEO SATISFIED SATISFIED SATISFIEO 1a. In genaral, how latlilied era you with tht Irath applet you buy} A B c D E 33 Plttm clrclt a letter. h u m clrclt the ittttr thtt comas cteaasr to thowing howuthlied you tr t with etch of the foilopting: ALMOST . ALWAVS ALWAYS SOMETIMES RARILY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 1b, Price ol tha Irath applet A B c D E 34 ■ Ic. SalKtlon ol (rash applat available whara you shop A B c D E 3S Id. Taita AB c D E 30 la. Appearance AB c 0 E 37 11. Qiqtneia A B c DE 38 1g. Packaging A B c D E 30 OFTEN SELDOM NEVER FRESH ORANQES How often do you buy freth oranges? A . B . c Pfeete circle e tetter. If you never buy hath aoolat pleats so on to tha next product. ALMOST ALWAYS ALWAVS SOMETIMES RARELY N iv in SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIED 2a. In general, how latitlled are you with A B c D E tha Irath oranges you buvf Plutt clrde a Ittttr, h u m clrclt the letter thet comet clotttt to thowing howuthfietl you ere with tech o f the following: ALMOST ALWAVS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIEO SATISFIED SATISFIEO 2b, Packaging ol tha Irath oranges A B C D E 2c. Appearanca A BC 0 E 2d. Selection ol Irath oranges available where you thop A B C D E 2a. Price A B C 0 E 21, Taita ABC 0 E 4 188 OFTEN SELDOM NEVER CD2 (HEAD) LETTUCE How often do you buy (htedl lattuca? A B C 1 Pttut clrclt a Ittttr. If you nam buy lhaad) lattuca olaaao so on to tha nest product. ALMOST ALWAYS ALWAVS SOMETIMES WARILY NEVER SATIIFIED SATISFIED SATISFIID SATISFIED SATISFIEO 2a. In gtntral, how tailtf led art you with (hsadl lettuce you buy? A B c 0 E 2 M m c / M i M l K • Pltttt c/refttht Ittttr thtt Corns clomt to thominf howuthfltd you tr tiWth tteh of tht following: ALMOST ALWAVS ALWAVS SOMITIMIS RARELY NEVER SoTIIFIED SATISFIED SATISFIED SATISFIED • •• SATISFIED 2b. Freihnettofthelattuee A BC 0 ■ E 3 2c. Appurmi AB c D E 4 2d. Price A 6 c D E . 5 2*. Packaging AB c D E e 2f. Taut AB c D E 7 OFTEN SELDOM NEVER FRESH POTATOES How often do you buy freth potatoes? A B C B Pfttst clrclt t lit ttr, If you now buy freth potatoes pi taw go on to tha neat product. ALMOST ALWAVS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIID SATISFIID SATISFIED 3a. In general, how tatlif lad ara you with , tha Irath potatoes you boy? A BC D E a Ptttu droit a Ittttr. Pittst clrclt tht Ittttr thtt comtt clostst to thawing how utisfittl you tr t with itch of tht following: ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIID SATISFIED SATISFIED 30. Appearance of tht (rath potaiott ABCD E to 3c. Packaging AB c D E 11 3d. Selection ol potatoat available where you thop AB c D E 12 3a. Tail* AB c D E 13 31. Prico AB c D E 14 e 189 PART 6 PROCESSED FRUITS AND VEGETABLES OFTEN SELDOM NEVER CANNEDPEACHES How ofttn do you buy ctnntd pttchtt? A B C IB Ptttu clrclt t Ittttr. If you n ew buv ctnntd oezchtid I m m go on to tht ntut product. ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIEO It . In getter tl, how utlifltd trt you with th< ctnntd pttchteyou buy? AB c D E IB Plettt clrclt t Ittttr. Attest clrtlt th t Arrow thtt comercloittt to ihowiag h o w utitfM you t r t with ttch of th t /allowing: ALMOST ALWAYS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 1b. Amount of pttchtt compirtd to •mount of tyrup AB c D E 17 Ic. T titt A B c D E 18 Id. Selection of c tn tlm tv tiltb lt whtrt you thop A B c D E 19 t#. Nutrllionil vtlut A B c DE 20 If. Pric* A B c DE 21 1g. SwtttnMiofiyruplnthtctn A B c D. E 22 OFTEN SELDOM NEVER FROZEN How ofttn do you buy frottn ortngt Juict? A B c 23 ORANGEJUICE PhtU clrclt t Ittttr. If vou neverbuy frottn ortnot lulot olttto go on to tht n o t product. ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIEO 2t. In genertl, how ulhlltd tit you with tht frozen ortnot Juict you buy? A B c 0 E 24 Pknt cirdt t Ittttr. 2b. 1* tht brtnd of frottn ortngt Juice you uwitly buy • mtnuftcturtr'i brtnd or t itort brtnd (prhritt Itbtl)? P ltttt citch oat iHimbtr. 1 Mtnuftcturtr'i brtnd 2 Stort brtnd 3 Don't know 25 Ptttu clrclt tht Ittttr thtt comesdosttt to showing how utisfbd you t r t with itch of th t following: ALMOST ALWAYS ALWAVS SOMETIMES RARELV NEVER s a t is if ie d s a t is f ie d SATISFIED SATISFIED SATISFIED 3c. Nutritions) vtlut of the frozen orange Juict A B CD E 26 2d. Ettt of preptrttlon A B ' c D. E 2? 2t. Price A B c D • E 26 21. Selection of ctn ilrei tvetlible whtrt you thop A B c D E 29 Jg. Title A B c 0 E 30 7 190 m u m SELDOM NEVER FRUIT JUICE THAT Howoltan do you buy fruit juict that COMES IN CANS OR comat In cant or jan? Plettt clrclt t Ittttr. A B • C 31 JARS (ealudln* Imitation If you never buy fruit tuka that comat fruit drlnki) In cant or {art pleata go on to tha neat produce ALMOST m ALWAVS ALWAVS I 1 tl hah El y NEVER SATISFIED SATISFIED SATISFIED SATISFIEO SATISFIED 3a. In general, how tatlified ara you with • tha fruit lute# you buy? A B c D E 32 fhwdreAilMHr. Plttw circle the ierrwthtt comtt etom t to thawing how tttltf/td you tr t with ttch o f tht following: ALMOST ALWAVS ALWAVS SOMETIMES RARELY ' n ever SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIED 3b. Nutritional value of fruit Julcat A B C 0 £ 33 3c. Selection of container iliei available whara you thop AB c 0 E 34 3d. Taita A B c DE 35 3t. Price A B c DE 35 OFTEN SELDOM NEVER CANNEOCORN How often do you buy canned com? ‘"‘A ' B C 37 Plettt clrclt t Ittttr. If you never buy canned corn Mean ■o on to tha neat product. ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVSR SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIED 4s In general, how tallil lad ara you with tha canned corn you buy? A B c 0 E 3B Plettt clrclt t Ittttr. Plettt clrclt tht letter thtt comtt cl own to tho wing how utitlitd you tr t with ttch of tht following: • ALMOST AlWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIEO SATISFIEO SATISFIED SATISFIED SATISFIEO 4b, Price of canned corn AB c 0 E 39 4c. Selection ol can tit at available where you thop A 8 c D E 40 4d. Taita A B c 0 E 41 4a, Amount of corn compared to amount of liquid A B c D E 42 4f. Nutritional value A B c D E 43 8 191 PART 7 DAIRY PRODUCTS AND EOQS OFTEN SELDOM NEVER MAROARINE How ofttn do you buy mtrgtrint? A B c 59 Pfttm clrtlt t Ittttr. M you ntvtr buy mtrgirlnt plttit go on to tht ntut product. ALMOST ALWAYS ALWAVS SOMETIMES RARELV NEVER SATISFIEO SATISFIED SATISFIED SATISFIEO SATISFIEO W. In gtntrtl, how utiifitd tit you with tht mtrgtrint you buy? A BC D E 60 Pimm drcit t Ittttr. Pint* d rd t th t Ittttr thtt conrnt clotnt to thawing how utiifitd OFTEN SELDOM NEVER BUTTER How ofttn do you buy butttr? A B c P lttit clrclt t Ittttr. If you ntvtr buy butttr pltttt go on to th t ntirt product ALMOST • ALWAYS ALWAVS SOMETIMES RARSLV NEVER SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIID 2t. In gtntrtl, how utlitifd trt you with tht buittr you buyi ABC 0 E P itttt clrclt t Ittttr. Pittm clrclt th t Ittttr thtt comtt clottit to thawing how utiifitd you tr t with ttch of tht following: ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIEO SATISFIED SATISFIEO SATISFIED SATISFIEO 2b. Nutrlllontl vtlut of tht butttr A 6 C 0 E 2c. Piles AB C D E 2d, Ftethotit A B C D E 2e, Howttiily tht butter tjwttdt A B C D E 21. T titt A B C 0 E 2g. Packtging A B CD E 10 192 OFTEN 3 a 1 NEVER a CANNED TOMATOES How ofttn do you buy ctnntd tomatoti? A C Plettt circle t Ittttr, If you n m r buy ctnntd tomttoti o lttit no on to tht neat product. * ALMOST ALWAYS ALWAYS SOMETIMES nADELY NEVER SATISFIEDSATISFIED SATISFIED SATISFIEO SATISFIED 6*. In gtntrtl. how utlafied art you with tht ctnntd lomaloea you buy? A B c 0 E P itttt clrclt t letter. Plttte clrclt tht Ittttr thtt comtt closest to showing how utiifitd you tr t with ttch of tht following: ALMOST ALWAVSALWAVS SOMETIMES RARELVNEVER SATISFIED SATISFIEO SATISFIEO SATISFIED SATISFIED 6b, T titto l tht ctnntd lomaloea A B C D E Sc. Amount of tomatoes compared to amount of liquid A B C D E Sd. Nulritionil vtlut A B C D E St. Stlectlon of can tin t available whtrt you ahop AB c D E 5f. Appttrtnct A B c D E Sfl. Prlct AB c 0 E OFTEN EFLDOM NEVER FROZEN VEGETABLES How often do you buy frottn vtgttablti? A B c 52 Pitttt clrclt t Ittttr, If you never buy fioten vegetables olettebo on to tha n tti product. • ALMOST ALWAVSALWAVS SOMETIMES RARELV n e v e r SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIED 6a. In general, how talhfitd trt you wilh tht frottn vtgeiiblei you buy? AB c DE S3 Plettt circle t letter. Plettt clrclt tht Ittttr th tt comes closest to showing how stllsfitd you tr t with itc h of the following: ALMOST ALWAYS ALWAYS SOMETIMES RARELVNEVER SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIEO 6b. E tit ol preparation of frottn vegetables A BCDE 54 6c. Price A BCD•E 55 6d. Nutritional value AB c 0 E 58 Ge. Taita A B c DE 57 61. Selection of liotenvtgtteblti available whtrt you thop A B c D E 68 9 193 OFTEN S I LOOM NIVER CHEESE AND How ofttn do you buy chem md chni* CHEESE PRODUCTS product!? Pitttt cirtlt t Ittttr. A B C 9 II you n*i*r buy chtm md thttM product! pltm go on to th* n u t product. ALMOST ALWAYS ALWAYS SOMITIMISRARELYNEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 3*. In gtntril, how titlifltd m you with ■ the chtm ind chtm product! that you buy 7 Pitttt drcltt Ittttr. A B C D E 10 Plettt d rd t the Ittttr thtt comtt do m t to thotrlng how tt tithed you tr t with ttch of tht following: ALMOST . ALWAYS ALWAYS SOMITIMIS RARELY NEVER SATISFIID SATISFIID SATISFIEO SATISFIED SATISFIED 3b. Tilt* ol th* ch*t» A B C 0 E 11 3c. P*ck*ging ABC DE 12 3d. Nutrltionti vilu* A BC 0 E 13 3*. Stkctlon of d itti* iviilibl* whir* you ihop A BC D • E 14 3f. Prlc* A B c 0 E 15 OFTEN SI LOOM NEVER ICECREAM , How ofttn do you buy Ic* cnim ? A B C 16 H ttttd r d tt Ittttr. If you ntvtr buy Ic* ctttm plt*t* go on to th* m at product. ALMOST . ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIEO SATISFIID 4*. Ingtn*r*l, how ttllilitdar* you with th* Ic* cm m you buy? AB c 0 E 17 Pitttt cirtlt t Ittttr, P itttt duett rht Ittttr thtt comtt clotttt to thowing howtit tied t* you tr t trlth ttch of tht following: ALMOST ALWAVS ALWAYS SOMETIMES RARELY NEVER SATISFIID SATISFIEO SATISFIED SATISFIEO SATISFIEO 4b. Smoothnttt or crttmlnm of ih* let cn*m A B C 0 E IB 4c. Stltction of Ic* ci«*m m iltb lt whir* you thop A B C 0 E IS 4d. IMc* A B C 0 E JO 4*. Packaging A B C 0 E 21 41. Nutrition*) vtlut A BC DE 22 4g. T*it* A B CDE 23 11 194 OFTEN SELDOM NEVER FRESH M IL K - a 1 that How olttn do you buy freth milk? A B c 2 4 that you buy In a itora of Plettt circle * Ittttr. li dtllvtr ad to youf ho ma II you navar buy frith milk pliata go on to tha mat product. ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIEO Sa, In gtnrr al, how tatltlitd aft you with tha hath milk you buy? A B c D E 25 PUttt dtcJe a /attar. * * P i n t * clrclt th* Ittttr tlu t comtt clotett to thawing how tttitfitdtt* you with etch of th* following: ALMOST ALWAYS ALWAYS SOMETIMES r a r e l y NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED Sb. Prlea ol (ha Irath milk A BCD E 26 6c. fm h n tij AB C 0 E 27 fid. Packaging A B C 0 E 26 5a. Nutritional valua A B C 0 E ' 29 61. Taita A B C D • • E 30 • t a-* *• • *•**» OFTEN SELDOM NEVER EGGS How o lttn do you buy aggt? A B C 31 P/ttto circle e Utter. II you ntvtr buy ftath milk oltata oo on to tha m at product. ALMOST ALWAYS AlWAVS SOMETIMES RARELY NEVER SATISFIEO SATISFIED SATI5FIIO SATISFIED SATISFIED 6a. In g tn trtl, how ttlitfitd ara you with tha tggt you buy? A B c D* E 32 Plettt circle * litter. •• • Plettt circle th* letter th tt comet d o tttt to thowing ho w tttitfitd you tr t with etch of the following: ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIEO SATISFIEO SATISFIED fib. Selection o f aggt available w h trt you thop A B CD E 33 6c. Nutritional valua A B CD E 34 fid. Taita A B C D E 35 6*. Tiethnatt A B c D E 36 61. Packaging AB c D E 37 fig. Prlco A B c 0 E 36 12 195 PART 8 MEAT AND POULTRY OFTEN SELDOM RIVER BEEF How ofttn do you buy bttlf A B . c 39 P itttt circlt t litter, II you ntvtr buy beef plta tt go on to the next product. ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED 1i. In general, how ta liif led art you with thebeelyou buy 7 A B C D E 40 P h u t drele a htttr. Phut clrclt tht Ittttr th tt comtt ctoiest to thotting how utiifitd you tr t with ttch of tht: following ALMOST ALWAVS ALWAVS SOMflTlMIS RARELY never SATISFIED SATISFIED SATISFIED SATISFIED SATISFIEO 1b. T ittt ol the btnl A B C D E 41 Ic, Packaging A B C 0 E 42 Id, Selection of beef available whtrt youthop A B C D E 43 1t. Frethneti A B C D E 44 11. Amount ol fat A B c D E 45 Ig. Price A B c DE 46 1h. Tanderneu A B c DE 47 OFTEN SELOOM NEVER CHICKEN- either whole How often do you buy chtckan7 A B C 4B chicken or cut-up P h u t circle t Ittttr. chicken parti If you never buy chicken pleate go on to the next product. ALMOST AlW AVS ALWAYS SOMETIMES RARELV NEVER SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIED 2a. In general, how tatilfltd are you with the chicken you buy 7 A B c D E 49 Phut circlt t litter. P hut circle the Ittttr thtt comet cloteit to ihowing howtitfitd u you tr t with etch of the following: ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIED 2b. Ftethnttt of the chicken A B c D E 50 2c. Price A B c D E 51 2d. Tendernttt A B c 0 E 62 2t. Title A B c D E S3 21. Packeglng A B c D E 54 2g, Selection of chicken available where you thop A B c D E 65 13 196 OFTEN SELDOM NEVER LUNCHEON MEATS How often do you buy luncheon ANO WEINERS meett and w*in*rtf Plettt circle a Ittttr. A B c 66 If you never buy luncheon meat* and welnari plaata go on to th* neni product, . ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIEO 3i. Ingtntral, how tatiifird are you with th* luncheon m u lt end welnert you buy? A B c D . E 67 Pitttt clrclt»Ittttr. P itttt circle th t Ittttr thtt comet cioutt ro thawing how u tiifitd you t i t with etch o f tht following: ALMOST ALWAVS ALWAYS SOMETIMES RARELVNEVER SATISFIEO SATISFIED SATISFIED SATISFIED SATISFIEO 3b. Ttndtmeii A B c D E 68 3c. Packaging A B c D E 69 3d. Pike AB c D E 60 3*. Freihnatt A B c D ‘ E 61 3f. Selection ol luncheon men* and welnert where youiop tl A B c D E 62 3g, Teit* A B c 0 E 63 OFTEN SELDOM NEVER COE PORK How often do you buy pork? A B c t Plettt circlt t letter. If you raver buy pork plaata so on to th* next product. ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIED SATISFIED SATISFIEO SATISFIED 4 a. In general, how t ill tiled *r* you with th* pork>youbuy? A BC DE 2 Plettt circle t letter. P itttt circlt tht h tter thtt comtt cioutt to thawing how u tiifitd you tr t with ttch o f tht following: ALMOST ALWAVS ALWAVS SOMETIMES RARELV NEVER SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIED 4b. Pric* of th* pork A BC 0 E 3 4c. Selectionof pork available where you thop AB C O E 4 4d. T itle A BC 0 E 5 4*. Frethneti A B c D E 6 4f. Tciidernett A B c o E 7 4g. Packaging A B c D E 8 4h. Amount of fat A B c D E 0 14 197 PART 9 PREPARED OR CONVENIENCE FOODS OFTEN SELDOM wsvan FROZENTV Mow oftan do you buy froren TV dlnmn? A B c to DINNER! Pitttt circlt t Ittttr. If you navar buy Iroian TV dlnnari plaata go on to ih t next product ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIED la. In general, how tallilfltd ara you with tha frottn TV dinners you buy? AB c .D E 11 Pitttt clrclta Ittttr, Plena drck tht Ittttr thtt comtt clomt to thom'ng how utiifitd yout r t with etch of tht following: ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIED SATISFIEO SATISFIED 1b. Eai* of preparation of frozen TV dinner* A B c 0 E 12 Ic. Truthfulntii of picture and label on tha package A B c D E 13 Id. Nuttltlonat valua AB c D E 14 la. Stia of portion* AB c D E IS 11. Taita A B c 0 E 16 Ig. M e* A B c D ' E 17 Ih. Selection ol froien TV dinnan avallabl* where you thop A B c D E IB OFTEN SELDOM NEVER BABY FOOD How oltan do you buy baby food? A B c 10 Plettt clrclt t latter. II you navar buy baby lood plaata go on to th* next product. ALMOST ALWAYS ALWAVS SOMETIMES RARELY NEVER SATISFIEO SATISFIEO SATISFIEO SATISFIED SATISFIEO 2a. Inganaral, how satisfied ara you with tha baby food you buy? A B C D E 20 Plrtu clrclt a Ittttr, Pheta circlt tht Ittttr that comtt clomtt to thowbg how utltfied you art with etch of tht following: ALMOST ALWAVS ALWAVS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIEO SATISFIED SATISFIEO 2b, Taita ol th* baby food A BC D E 21 2c. Fraihnau A B C D E 22 2d. Eat* ol preparation A B c D E 23 2a. Packaging A 8 c DE 24 21. M e* A B c D E 25 2g. Nutritional valua AB c D E 2B 15 198 PART 10 YOUR OVERALL FEELINGS ABOUT YOUR FOOD SHOPPING EXPERIENCE P/rare clrtlt tht Ittttr thtt comtt cioutt to thawing how tttitfitd you tr t with itch of thi following food tto n chtrictirittict. If you hara no opinion on a particular qutitlon pul an X In tha btaktt ( I baitda It, ALMOST ALWAVS ALWAYS SOMETIMES BARELY NEVER SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIED 1. Store prleet 1I A B C' 0 E 27 2. Store itrvlctt and lacllititt { I A B C D E 29 3. Clark frtandlineu and halpfulnan ( ) A B . C DE 29 4, Stora elaanllnau and naatntu ( t A B C 0 E 30 B. Salactlon of food* to choota from ( ) A B C 0 E 31 6. Sptid ol check out Mrvln I > A B C D E 32 7. Stora layout and arrangamant I > A BCD E 33 B. Parking ipeca I ) A B C 0 E 34 9. Pricti on waakly ipaciali ( ) A B c 0 E 35 10. Availability of advartitad itamt ( > A B c 0 E 30 11. Your ability to choota betvvtan itorat ( 1 A B c 0 E 37 12. Accuracy of checkout girli ( ) A B c 0 E 36 13, Tha kind of information available to you for making accurate itora competition I ) A 6 c D E 39 14, Clarity ol pricti marktd on liernt ( ) A B c D E 40 16 199 1, - How oftan could you uta additional Information to help you compara product! and choota ALMOST 41 between ttorai? ALWAYS ALWAVS SOMETIMES RARELY NIVIR Plctt* pick * l*n*r. A B c D E A 2. If you m n fltvin ipecllic information about food quilliy, food pricet, arid food ttor* comparltloni, wAat media would moil elfectively provide you with this Informition? I Ptnm choot* on*: 1. Newtpaper 2. Radio 3. Televition 42 4. Diract mall to your horn*' 5. A community food Information cantir 6. Publlthad malarial In magailnai and parlodicali 7, In ratail food atom 8. Other, plaata tpedly 17 200 PART 11 SOME BACKGROUND INFORMATION ABOUT YOU AND YOUR HOUSEHOLD During tht put yttr, have there bitn timet . when you were diuatiiNed with a tptcillc food itore, or food Item that you purchated? P ftm circle on* numb*. Y « No 43 H ytt, plettt circle the number thitthow i whether or not you tme done eny of the following to Indicele your dltutltftetion: a. Complaintd to tht ilora t Y tt 2 No 44 b. Complained to tha manufacturer 1 Yea 2 No 45 c. Circuited your diitatltfaction with your friendior family 1 Yea 2 No 4B d. Complained to a government agency 1 Yet 2 No 47 t. Participated In a boycott of a it ore or product 1 Yet 2 No 4B I. Something tlia 1 Yet 2 No 49 Plettt expltln In the box beto w SO 2. What It your age? Ptette specify. SI 3. Art you employed outiidt your home? P itttt circle one number. 1 Ytt, fulMlme 62 2 Yet, part-time 3 No 4. Including youcieH. how many pertoni livt in your houtahold? Plettt fill in. TOTAL NUMBER OF PERSONS: S3 How many ara agt IS or over? NUMBER tB OR OVER: ___ M How many ara undtr agt IB? NUMBER UNDER IB :___ SB S. At what ttor* do you buy moit of your food? NAME: SB APPROXIMATE ADDRESS:____ S? IB 201 6. How many yaari ol formal education heva you completed? Plettt tptdfy. 68 59 7. Pleaie writ* in below a thort description ol tha kind of work that tha head ol tha houithold doet (lor example: electrical engineer, ttock dark, taxi driver,homamaker, lyplit, retired): 60 8. Pleaie clrclt theona number below which bait deicribti the total combined Income In 1973 of allmembera of your houithold from all tourcei - wagtt, rentalt, dividend!, toclal tecurity, and to forth - before taxet and deduction!. I Under 4,000 2 4,000 to 7,999 61 3 8,000 to 11,999 4 12,000 to 15,999 5 16,000 to 19,999 6 20,000 or over 9. Are you: 1 Male 62 2 Female 10. What it your mother tongue? .1 French 63 2 Engliih 3 Other(pitttt tptclfy) 11. In which province do you rtilde? 1 ■ Ontario 64 2 Quebec 3 Manitoba 19 Food Prices R»»l»w Board, APPENDIX D - 2 Consumer Questionnaire Used P.O. Bom 1540, In the Post Test Survey, Station B, November, 1974. Ottawa, Ontario, KIP 526 A Follow-Up Survey of Consumer Satisfaction Dear Consumert This survey is about your satisfaction or dissatisfaction with food products, the way they are sold in stores and markets, and how well the food industry satisfies consumers. There are no right or wrong answerst we just want to know what you think. Most of t^ie questions can be answered by drawing a circle around a letter or number next to the answer that best describes your feelings. For example: How satisfied are you with the weather in your area? ALWAYS ALMOST ALWAYS SOMETIMES RARELY NEVER SATISFIED______SATISFIEO______SATISFIED SATISFIEO SATISFIEO A 8 © O E The circle above would indicate that you are sometimes satisfied, and sometimes not satisfied. The questionnaire should be'completed by the person who does most of the food buying for your household. All your answers will be confidential and will be used only to make statistical summaries of answers from everyone in the survey. If you have any questions about the survey, please call collect at (613) 996-7945. 203 COB tl) Do you think th* food pi let comptrltom provided by tht Botrd ttvtd you timt In Marching for tht lowtr priced ttortt) Pliattclrda a Ittttr, U«UAU.V KMMTtMtB Niven G (2) Do you think tht food prict comptrltom provided by tht Botrd mtdt you MORE contdoui of pi let dlfftrtnctt betwttn product* or bttwttn itortt) v n S O M ITIM ia NO (3 (3) In ont ttnttnct whit did you llkt tht moil tbout tht prlct comptrlion program Inltlattd by the Botrd, t *■ * _ ^ *±£_m ; _ 3 A. Tha following qutttlom art rtlattd to tht vtlut you pltot on tht food prict oomparlton Information that vn t publlihtd by tha Food Prict* fftvltw Board, Pitttt antwtr all qutttlom. (1) Afttr rtctlvlng wttkly food prlct comptrltom In ntwtpaptrt land ptrhapt by dlrtct mall) for tht patt ftw wttkt, what would you ba witling to pay EACH WEEK to rtctlva tht tamt information In tha futurt. Plena choota ont. 0 - Bctnti 60 - 59 ctnt* 10- IBetntt 60 - 69 cant* 20 - 29 ctntt 70-79 ctntt - 30 - 39 ctnti 60 — 89 cant* 40 - 49 cent* 60 - 99 cant* * Ol O or p itttt tptclfy amount i Li (2) Old you chtnga ttora* at a retult ol tht prlct comptrltom provided by tha Board) YU NO YEMtonnnn.v A a > C 204 CD4 01 How ofttn could you u m additional Information to help you compart ALMOST products and choota bttwttn ttortt? a u ta v t ALWAYS SOMITIMIS BAWSLV NIVSA Afreet p/c* a letter, (7J* 41 (4) If tht Food Prion Rtvltw Botrd’i wMkly public information on ttora prict compatliont had to bt privately CD5 financed In order that It bt continued, how high would tht eott par week havt to bt before you would not pay for hi 0 — 9 ctntt 59 ctntt 10 -1 9 ctntt BO - 59 ctnlt 90 —29ctnti 70 - 79 ctnti e 30 — 39 ctntt 90 - 69 ctntt e 40 — 49 ctntt 90 - 99 ctntt 10 or plaaMtptclfy amount I I (5) If you wart given specific Information about food quality, food pricti, and food store compatltlora, what madia would mott affectively provide you with thli Information? Abate c/toowont; 1. Ntwtpaptr Radio 3. Ttltvltlon CD4 4. Direct malt to your home . 42 A community food Information canter 8, Published material In magatlntt and periodicals In retail food norti Other, pitttt tptclfy (61 At what ttort do you buy most of your food? NAME:------56 APPROXIMATE ADDRESS: 67 205 i ALMOST ALWAVS ALWAYS SOMETIMES RARELY NEVER SATISFIEO SATISFIED SATISFIED SATISFIED SATISFIED CD1 POOD PRODUCTS All In all, how u iiif led are you with tha FOOD PRODUCTS told In tha uorit In your aria? B C D - E 1 Pleats ctrela tha lattar that comit s) ctoiait to ynur fttHngt. ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIEO SATISFIED SATISFIED SATISFIED FOOD STORES 1. On tha whole, howutltfied art you with tha food itorat In vour arta? B c D E s PlttM clrclt tha lattar that comai 8 cIom U to your fttlingi. How tatitf led ara you ALMOST with each of tha following? ALWAYS ALWAYS SOMETIMES RARELY NEVER Plaata clrclt a lattar. SATISFIEO SATISFIEO SATISFIED SATISFIED SATISFIED 2. MEAT AND POULTRY (For example: batl, pork, chick an, and to on) A C D E 9 3. DAIRY PRODUCTS AND EGOS (For example: milk, butttr, chaaia, aggt, and to on) A $ c D E 10 4. BAKERY AND CEREAL PRODUCTS (For example: braad, caka mixat, cooklat, ctrial and to on) A e c 0 E , 11 5. FRESH FRUITS t (For example: applet, orengtL paart, paachai, and to on) AB © 0 E 12 S. FRESH VEGETABLES (For txampla: portion, tomatoar, latiuca, and to on) AB <3> D E 13 * 7. PROCESSED FRUITS AND VEGETABLES (For example: canned or froten vegttiblet, frultt, fruit fulcat, and toon) \ A ® c 0 E 14 B. fREPARc n OR CONVENIENCE POOD (For example: TV dinnart, ready-to* eat puddingi, baby lood, canned toupLtnd yton) A 0 c D E IS YOUR OVERALL FEELINGS ABOUT YOUR FOOD SHOPPING EXPERIENCE P itt* circlt tht Ittttr th tt comtt clotttt to thawing ho w utiifitd you tr t with ttch o f tht following food tto rt chtrtcrtrlttici II you have no opinionon a particular question put trt X in th* bracket { I b*lM* h, ALMOST ALWAVS ALWAVS SOMKTIMIt flARtLV NIVIA SATHFIID SATISFHP SATISFIID SATIIFIID SATISFItO 1. Store prices ( 1 A B 0 E 27 (S) 2. Store services end facilities { 1 A 0 C D E 28 3, Clerk friendliness «nd h*lp!ulnwi t J - A (i) c D E 29 4. Stor* cl**nllntu and neetnen 1 1 A B 0 E 30 C9 6. Selection of food* to choot* front « » Q b c D E 31 6. Speed of checkout service ( ) A B 0 E 32 © 7. Store leyout end arrangement < i Q B c D E 33 6. Perking ipece 1 1 A B c D E 34 9. Prices on weekly tpoclele ( i < $ B c D E 35 10. Availability of advertised Items ( I A & c D E 38 11. Your ability to dtoow between stores < » 0 B c D E 37 12, Accuracy of checkout girls 1 » £ > B . c D E 38 13. The kind ol Information available to you for making . accurate store comparison ( 1 A B © 0 E 39 14. Ctarlty of prices marked on Items t > A B © D E 40 207 H o t* drclt tht h im th tt comtt clotttt to thom'ng hot* utiifitd you tr t tilth ttch o t tht following product* you buy tod thtirtttrtbum*. ALMOST always ALWAYS SOMETIMES BARELY NEVER • SATISFIEO SATISFIEO SATISFIEO SATISFIID SATISFIID CDI 1. Brttd <5> B C D E 17 3. Tht Prlct of Brttd A B <£? D E 31 3. Tht TtH t of Brttd B C D E 34 4. RttdytoEit Brttkftil Certtll * ’ ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIED SATISFIED SATISFIED SATISFIED SATISFIEO • 1. Frtih Applti B c D E 33 2, Th* Prlct ol Frtih Applti AB © 0 E 34 3. FreihOrtngti A ' B © DE 41 4. Tht Prict of Frtth Ortnptt A B & 0 E 4B B, Frtih Btntnit 0 E 48 AB $ B. Tht Prlct of Frtth Btntntt A B 0 0 E E0 62 7. Tht Sttictlon of Frtih Btntntt A ALMOST ALWAYS ALWAVS SOMETIMES RARELV NIVIR SATIIFIID SATISFIED SATISFIED SATISFIID SATISFIED 1. Frtih Tomitott A (&> C 0 E .66 2. Th* Prlct of Frtih Tomitott A B c D \ © 87 3. Th* Appttrtnct of Frtth Tomttow A B c /ft E .89' 4, Hetd Ltuuct A B c © 2CD2 ’ ■ Q ■ 5. Tht Prlct ol Httd Ltttuct A B £ 0 ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIID SATISFIED SATISFIED SATISFIID SATISFIED 1. Ctnntd Pttchtt ® B c 0 E 16 2, Tht Prict ot Ctnntd Putchw A B <5> 0 E 21 3. Frottn Ormgt Juict <2» c DE 34 4. Tht Prlct ol Frottn Ortngt Juict A c 0 E 36 6. Fruit Juict ( 5 B c 0 E 37 0, Tht Nuiritlontl Vtlut of Fiult Juict & B c 0 E 33 7. Tlw Prict of Fruit Juict A B S) D E 38 8. Ctnntd Corn B c 0 E 38 9, Tht Price of Ctnntd Corn A © c D E 39 10. Ctnntd Tomitott <5> a c 0 E 45 11. The Price ol Ctnntd Tomitott AB D E 51 12, Froien Vrgetibltt <8> B 0 E 83 13, Tht Prict of Froien Vcgtubiti A B (9 D E 88 208 ALMOST ALWAYS ALWAYS SOMETIMES RARELY NEVER SATISFIEO SATISFIED SATISFIEO SATISFIED SATISFIED 1. Mtrgtrint <8> B C 0 E 60 2. Th# Packaging of Margarine A c 0 E 61 3. Th# Pric# of Mtrgtrint A B © 0 E 64 4. Butttr @ B c 0 E 2 COS S. Th# Pric# of Butttr A B 0 E 4 8. Chtta# and Chtttt Product* B .S',, 0 E 10 7. Th# Prlct of Chtttt I A tnd Chtttt Product) B © ,• 0 E 15 6. ictCrttm © B c D - E 17 9. Tht Pric# of IcaCrttm AB . D~> E 20 10. Frtth Milk ■ B c V ® E 25 U . Tht Pric# of Frtth Milk A B c k-Of © 28 12. Eggi <2* B c 0 E 32 13. Tht Prict of Eggi A B C (5> E 38 ALMOST ALWAVS ALWAYS s o m e t im e s RARELY NEVER SATISFIED SATISFIED SATISFIEO SATISFIED SATISFIED L 1. Bttf (A) B c 0 E 40 2. Th* T titt of Bttf A c 0 E 41 3. Ptcktgttof Bttf A & c 0 E 42 4. Stltction of Betf Avtlltblt © B c D. E . 43 6, Frtthntu of Bttf © B - c 0 E 44 8. Amount of F tt In Bt#f A B 0 E 45 7. Prlct of Bt#f A c DE 48 0. Ttndcrrijnnf 3ttf AB c D E 47 9. Chlcktn 0 ) B c 0 E 49 10. Tht Pric# of Chlcktn A € > c • 0 E 81 It, LuncheonMattttndWtlntrt — 129 B c DE 87 12. Tht Price of Luncheon Mratt tnd Wtlntrt A APPENDIX E Demographic and Social Population Data For Electoral Districts of the Ottawa-Hull Area, 1971. The following table presents the distribution of Ottawa-Hull area consumers by various demographic charac teristics such as income, age, education, and occupation. The data tends to differentiate various areas of the metropolitan market into 'affluent1 and 'less affluent1 sectors. APPENDIX E TABLE E - 1 Demographic and Social Population Data for Electoral Districts of the Ottawa-Hull Area, 1971. Divisions/ Ottawa Ottawa Ottawa Gatineai Regional Demographics Center East- West -Hull Average South Carleton Married 28,875 90,120 46,745 76,475 Single 34,885 102,615 46,240 92,155 Mother Tongue English 48,565 118,420 78,780 24,945 French 10,510 70,850 11,625 147,035 Italian 5,180 2,115 2,405 295 Income per Family Average family $10,540 12,561 12,890 9,508 Less than 3,000 1,475 2,950 1,215 4,075 3,000 - 5,000 1,760 3,055 1,600 4,025 5,000 - 7,000 2,125 4,490 2,365 5,760 $11,396 7,000 - 10,000 3,364 9,550 4,735 10,460 10,000 - 15,000 3,515 14,330 7,570 10,265 15,000 & over 2,925 13,180 7,160 5,350 Age of Household Head 45.4 43.0 44.8 43.0 Less 20 90 100 65 90 20 - 24 1,275 2,830 1,550 2,955 25 - 34 3,245 . 11,635 5,055 11,235 35 - 44 2,765 10,675 5,255 9,640 43.6 yrs 45 - 54 2,865 10,995 6,010 14,660 55 - 64 2,620 6,400 4,250 5,020 65 & over 2,315 3,665 2,485 3,375 Education of Household Head 10.5 10.8 10.9 9.5 Less grade 8 1,830 3,230 1,550 9,065 8-10 4,965 15,635 7,405 15,540 (cont.) APPENDIX E - (Continued) Divisions/ Ottawa Ottawa Ottawa Gatineau Regional Demographics Center East- Nest -Hull Average South Carleton Education of Household Head 10 - 13 4,923 21,110 12,205 12,500 10.4 yrs College 2,400 7,310 3,385 2,525 Occupation of Household Head Management 1,340 6,195 3,505 2,230 Technical 385 5,210 2,980 2,010 Clerical 1,940 5,560 3,020 3,985 Service 1,905 6,940 2,560 3,345 Construction 1,460 3,175 1,655 5,040 Total Population 70,565 202,305 98,955 175,115 Source: Statistics Canada - 1971 Census - Demographic and Social Population Data For Electoral Districts. 211 21?. APPENDIX F A Summary o£ the Consumer Demographic Characteristics for Ottawa-Hull Survey Participants, July, 1974 The age, income, occupation, and educational char- acteristlcB of the Ottawa-Hull consumers are presented in Table F-l. The corresponding characteristics for the Winnipeg participants are given in Appendix H, Table H 1. 213 TABLE F - X APPENDIX F A Summary of the Consumar Demographic Characteristics for Ottawa-Hull Survey Participants, 1974 Variable Variable Absolute Relative Kean Name Class Frequency Frequency Value Sex 1102 100,00 1,79 (1) Kale 225 20,40 (2) Female B77 79.60 Age (Continuous) 1081 100.00 40,50 Family Siato (1) Total 1096 Continuous 3,37 (2) Over IS 991 Continuous 2.32 (3) Under IB 6B7 Continuous 1.70 Employment Outside Homo 1100 100.00 1,94 (1) Yea 527 47.70 (2) Part-time 120 10.90 (3) Ho 459 41.40 Education (Continuous) 1057 100.00 13.19 Occupation 104B * 100.00 4.07 (1) Professional 46 4.3B (2) Semi-professional 196 IB,70 (3) Skilled labor 363 34.63 (4) Owner of small business 19 1, B1 (5) Technician 90 8.50 (6) Semi-skilled labor 213 20.32 * (7) Unskilled labor 30 2.56 (B) Retired 90 8.67 . Income 1163 100.00 4.12 (1) Under $9,000 31 2.91 (2) 4,000 to 7,999 126 11.85 (3) 5,000 to 11,999 216 20.32 (4) 12,000 to 15,999 343 22.66 (5) 16,000 to 19,999 201 18,90 (6) 20,000 or over 246 23.14 Mother Tongue 1104 1.69 (1) French 190 17 .22 (2) English B39 75.99 (3) Other 74 6.79 Provincial Residence 1029 100.00 1.19 (1) Ontario 945 91.00 (2) Quebec 64 9.00 Source: Food Prices Review Board Survey 1974. 214 APPENDIX G Levels of Consumer Satisfaction With Specific Food Products, Ottawa-Hull Respondents, July, 1974. The following tables summarize the responses of the Ottawa-Hull consumers to questions about specific food products. Each table refers to a particular product and Its associated characteristics. Similar characteristics are measured across products to provide a basis for com parisons . TABLE G - 1 Consumer Satisfaction vith Bread and Its Characteristics, Ottawa-Hull July, 1974. IN PERCENTAGES Variable and Always Almost Sometimes Rarely Never No. of Mean Attributes Satisfied Always Satisfied Satisfied Satisfied Observ Dissatis Satisfied ations faction Score 2 3 4 5 Bread 21.1= 53.25 18.35 6.32 0.90 1106 2.12 Freshness 2r.:= . 51.31 15.14 3.71 0.54 1103 1.94 Price 5.3= 21.84 30.33 23.93 14.47 1178 3.12 Packaging 33.:= 45.32 16.68 3.89 1.01 1179 1.94 Nutritional Value 22. = = 35.89 22.42 12.96 5.86 1057 2.43 Taste 26.23 42.32 21.42 6.94 3.01 1094 2.18 Source: Food Prices Review Board Survey Data, 1974. TABLE G - 2 Consumer Satisfaction with Breakfast Cereals and Their Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost. Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatis Satisfied ations faction Score 1 2 3 4 5 Breakfast Cereals 28.52 44.72 17.86 7.31 1.52 985 2.08 Packages 36.05 37.48 16.03 7.76 7.65 979 2.03 Taste 29. 47 43.09 20.67 4.70 2.04 977 2.06 Nutrition 18.46 25.91 26.75 18.25 10.59 953 2.76 Price 5.99 16.02 30.71 29.16 18.09 967 3.37 Selection 41.11 42.34 12.74 2.56 1.23 973 1.80 TABLE G - 3 Consumer Satisfaction with Apples and Their Characteristics - Ottawa-■Hull, July, 1974. IN PERCENTAGES Apples 9.63 44.31 35.87 8.80 1.37 1090 2.47 Price 3.05 13.21 34.10 33.82 15.80 1082 3.46 Selection 12.67 32.06 36.34 15.75 3.16 1073 2.64 Taste 13.55 43.55 35.51 6.36 1.07 1070 2.37 Appearance 13.56 49.67 31.15 4.21 1.40 1069 2.30 Freshness 11.57 40.61 36.32 9.52 1.96 1071 2.49 Packaging 21.46 44.72 24.01 6.68 3.10 1062 2.25 Source: Food Prices Review Board Survey Data, 1974 TABLE G - 4 Consumer Satisfaction with Tomatoes and Their Characteristics, Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatis Satisfied ations faction Score 1 2 3 4 5 Tomatoes 5.35 32.84 42.28 18.33 1.18 1102. 2.77 Taste 6.84 27.48 42.64 20.27 2.74 1095 12.84 Price 1.74 8.51 32.69 37.82 19.23 1092 3.64 Ripeness 5.14 29.13 44.85 18.10 2.75 1088 2.84 Appearance 7.68 34.44 44.35 11.66 1.85 1080 2.65 Packaging 13.58 42.07 28.39 12.72 3.22 1053 2.49 Availability 13.11 40.72 30.28 13.66 2.21 1083 2.51 TABLE G - 5 Consumer Satisfaction with Lettuce and Its Characteristics , Ottawa- Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatis Satisfied ations faction Score 1 2 3 4 5 Lettuce 7.33 43.57 35.87 12.29 0.91 1090 2.55 Freshness 9.45 42.33 37.55 11.55 1.20 1088 2.50 Appearance 8.87 40.01 38.35 11.55 1.20 1082 2.56 Price 3.24 13.42 38.88 30.37 14.07 1080 3.38 Packaging 15.52 45.55 26.47 9.35 3.08 1069 2.38 Taste 13.38 47.64 31.30 6.64 1.01 1083 2.34 £ Source: Food Prices Review Board Survey Data, 1974 TABLE G - 6 Consumer Satisfaction with Oranges and Their Characteristics, Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatis Satisfied ations faction Score 1 2 3 4 5 Oranges 11.29 53.60 28.08 5.97 1.04 1054 2.47 Packaging 26.20 50.67 17.34 4.72 1.06 1038 2.31 Appearance 20.55 54.65 21.51 2.97 0.28 1041 2.03 Selection 18.13 40.78 29.84 10.26 0.96 1042 2.07 Price 4.12 20.92 35.12 26.96 12.86 1042 2.35 Taste 13.65 47.37 29.51 8.30 1.14 1047 3.23 TABLE G - 7 -Hull, July, 1974 Consumer Satisfaction with Bananas and Their Characteristics, Ottawa IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ- Dissatis Satisfied Ations faction Score 1 2 3 4 5 Bananas 19.36 58.09 18.42 3.74 0.37 1069 2.07 Taste 28.84 56.26 12.63 1.79 0.47 1061 1.88 Price 13.38 41.09 31.00 9.42 5.09 1061 2.51 Appearance 18.46 51.98 24.05 4.92 0.56 1056 2.17 Selection 20.68 45.82 23.34 8.63 1.51 1054 2.24 Packaging 32.05 45.50 14.56 5.66 2.22 989 2.00 TABLE G - 8 Consumer Satisfaction with Potatoes and Their Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Dis Satisfied Always Satisfied Satisfied Satisfied Obser satisfaction Satisfied vations Score 1 2 3 4 5 Potatoe = .46 40.44 35.58 14.70 2.80 1068 2.66 Appearance S.14 39.11 37.98 11.40 2.35 1061 2.58 Packaging 13.97 36.78 25.66 16.63 6.93 1052 2.65 Selection 13.56 36.62 30.64 15.46 3.70 1054 2.59 Taste 13.74 46.56 32.23 9.14 1.32 1061 2.43 Price 2.64 10.29 28.51 34.27 24.26 1059 3.67 TABLE G - 9 Consumer Satisfaction with Canned Peaches and Their ICharacteristics, Ottawa -Hull, July, 1974 IN PERCENTAGES Canned Peaches 25.40 55.83 16.35 2.29 0.10 917 1.95 Amt. of Peaches Vs. Amt. of Syrup 14.72 42.74 26.39 14.17 1.96 917 2.45 Taste 21.51 56.31 18.55 2.85 0.76 911 2.05 Selection of can Size 26.81 46.59 17.91 6.48 2.19 910 2.10 Nutrition 17.67 42.30 27.92 9.35 2.85 877 2.37 Price 5.07 26.71 42.05 18.01 8.05 906 2.97 Sweetnessof syrup 20.54 39.56 22.63 10.87 6.37 910 2.42 Source: Food Prices Review Board Survey Data, 1974 TABLE G - 10 Consumer Satisfaction with Frozen Orange Juice and Its Characteristics, Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatisfaction Satisfied ation Score 1 2 3 4 5 Frozen Orange Juice 29.62 46.58 11.92 1.36 0.49 805 1.76 784 1.53 Nutrition 37.96 42.54 13.88 4.07 1.52 785 1.88 Ease of Prep. 58.94 36.54 3.75 0.50 0.25 799 1.46 Price 17.80 37.11 29.01 10.71 5.35 803 2.48 Selection of Can Size 39.75 42.00 13.62 4.00 0.62 800 1.83 Taste 41.31 42.06 13.52 2.60 0.49 806 1.78 TABLE G - 11 Consumer Satisfaction with Fruit Juice and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatisfaction Satisfied ation Score 1 2 3 4 5 Fruit Juice 23.08 51.07 21.53 3.70 0.59 836 2.07 Nutrition 22.05 44.98 25.03 6.44 1.48 807 2.20 Selection Can Size 29.33 49.23 15.15 5.21 0.97 825 1.99 Taste 24.69 45.15 22.03 7.02 1.09 826 2.17 Price 7.02 20.33 35.95 25.78 10.89 826 3.13 Source: Food Prices Review Board Survey Data, 1974. TABLE G - 12 Consumers Satisfaction with Pork and Its Characteristics, Ottawa-Bull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfie i Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Pork 12.25 57.71 25.94 3.37 0.71 979 2.22 Price 3.28 17.78 40.90 23.02 15.00 973 3.28 Selection 17.02 41.64 30.05 9.84 1.43 975 2.37 Taste 16.30 55.89 23.48 3.38 0.92 975 2.16 Freshness 18.39 53.95 24.15 2.56 0.92 973 2.13 Tenderness 17.76 52.25 24.84 4.31 0.82 974 2.18 Packaging 19.00 48.65 23.34 6.71 2.27 968 2.24 Amt. of fat 6.05 27.59 39.38 20.92 6.05 975 2.93 TABLE G - 13 Consumers Satisfaction with Frozen T.V. Dinners and Their Characteristics, Ottawa-Hull, July IN PERCENTAGES 1974 Variable Always Almost Sometimes Rarely Never No. of Mean Satisfie:d Always Satisfied Satisfied Satisfied Observa Dissat isfaction Satisfied tions Score 1 2 3 4 5 Frozen T.V. Dinners 8.40 35.01 33.61 18.48 4.48 357 2.75 Ease of Prep. 46.89 40.39 10.45 1.13 1.13 354 1.69 Truthfulness of Picture Label 12.99 31.35 27.40 17.51 10.73 354 2.81 Nutrition 5.93 27.00 34.71 23.44 8.90 • 337 3.02 Size of Portions 6.74 25.28 32.02 24.15 11.79 356 3.08 Taste 8.73 28.16 34.08 18.02 10.98 355 2.94 Price 3.40 19.88 32.38 38.69 15.62 352 3.33 Selection 24.92 38.81 25.49 7.36 3.39 353 2 -25 S - Source: Food Prices Review Board Survey Data, 1974 TABLE G - 14 Consumers Satisfaction with Chicken and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Chicken 1-.91 58.19 21.91 4.14 0.82 1086 2.17 Freshness IS.90 53.08 23.13 3.87 1.01 1085 2.15 Price 5.46 23.81 40.68 18.16 11.77 1079 3.07 Tenderness 19.35 53.84 24.18 2.78 0.83 1079 2.13 Taste 19.14 50.51 24.65 5.67 1.02 1075 2.20 Packaging 20.54 39.96 26.05 10.64 2.80 1071 2.35 Selection 20.55 42.68 27.13 8.14 1.48 1080 2.27 TABLE G - 15 Consumers Satisfaction with Luncheon Meat and Wieners and their Characteristics , Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Somerimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Luncheon Meat 6 Wieners 10.56 46.31 34.47 7.15 1.49 937 2.42 Tenderness 19.50 52.15 24.35 3.01 0.97 928 2.13 Packaging 25.08 46.50 21.85 5.05 1.39 929 2.10 Price 3.87 16.98 36.98 26.45 15.59 930 3.33 Freshness 14.53 43.70 31.02 8.89 1.84 922 2.39 Selection 26.80 44.56 22.82 4.73 1.07 929 2.08 Taste 12.93 40.30 33.08 10.23 3.44 928 2.05 M ro N> Source: Food Prices Review Board Survey Data, 1974 TABLE G - 16 Consumers Satisfaction with Beef and Its Characteristics, Ottawa-Hull, July, 1974. _IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Beef 10.73 50.23 31.91 6.29 0.83 1081 2.36 Taste li*. 81 48.88 31.38 4.25 0.64 1080 2.27 Packaging 17.79 42.56 27.40 9.98 2.16 1062 2.36 Selection 19.73 39.75 28.30 9.87 2.32 1074 2.35 freshness 18.90 47.78 26.05 5.83 1.41 1063 2.23 Amt. of fat 7.99 30.57 39.13 17.59 4.70 1063 2.80 Price 2. 42 9.13 25.90 31.78 30.75 1073 3.79 Tenderness 9.31 35.28 40.31 11.73 3.35 1074 2.64 TABLE G - 17 Consumers Satisfaction with Eggs and Their Characteristics , Ottawa- Hull, July , 1974. IN PERCENTAGES.... Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Eggs 30.48 55.05 11.73 2.09 0.63 1099 1.87 Selection 48.89 40.53 8.18 2.02 0.36 1088 1.64 Nutrition 56.50 36.13 5.75 1.13 0.47 1060 1.52 Taste 42.50 43.42 11.22 2.11 0.73 1087 1.75 Freshness 34.40 42.93 16.51 4.95 1.19 1090 ’ 1.95 Packaging 48.47 37.76 9.32 3.23 1.20 1083 1.70 Price 9.40 20.92 31.88 22.02 15.76 1085 3.13 to Survey Data, 1974 to Source: Food Prices Review Board to TABLE G - 18 Consumer Satisfaction with Ice Cream and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Ice Cream 26.73 50.85 19.39 2.81 0.20 995 1.98 Creaminess 26.28 46.92 21.75 4.63 0.40 993 2.05 Selection 30.22 36.61 22.61 9.12 1.42 986 2.14 Price 9.49 25.53 38.81 17.46 8.68 979 2.90 Packaging 31.18 41.82 19.42 6.33 1.22 978 2.04 Nutrition 26.19 41.56 22.69 7.10 2.43 943 2.18 Taste 28.61 46.51 20.62 3.74 0.50 989 2.01 ■ TABLE G - 19 Consumer Satisfaction with Fresh Milk and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa D issat is fact ion Satisfied tions Score 1 2 3 4 5 Fresh Milk 41.06 51.10 6.44 1.10 0.27 1086 1.68 Price 9.40 20.18 23.41 24.33 22.67 1085 3.30 Freshness 33.82 48.28 14.18 3.05 0.64 1079 1.88 Packaging 41.14 40.03 12.51 4.35 1.94 1079 1.85 Nutrition 53.37 37.70 6.74 1.61 0.57 1053 1.58 Taste 43.97 45.73 8.34 1.48 0.46 1078 1.68 Source: Food Prices Review Board Survey Data, 1974 TABLE G - 20 Consumer Satisfaction with Butter and Its Characteristics, Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction.. Satisfied tions Score 1 2 3 4 5 Butter 46.61 43.07 8.37 1.28 0.64 931 1.66 Nutrition 47.64 39.21 10.33 1.34 1.46 890 1.69 Price 8.43 19.02 26.19 25.76 20.97 920 3.32 Freshness 40.52 43.57 12.63 2.72 0.54 918 1.79 How Easily Spread 38.78 40.77 16.02 3.31 1.10 905 1.87 Taste 41.43 44.90 10.08 2.82 0.75 922 1.76 Packaging 48.10 36.80 . 10.31 2.93 1.84 921 1.73 TABLE G - 21 Consumer Satisfaction with Cheese and Cheese Products and Their Characteristics , Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score Cheese and Cheese Products 32.57 55.92 10.49 0.81 0.18 1105 1.80 Taste 32.67 53.97 11.82 1.44 0.09 1108 1.82 Packaging 38.76 45.04 12.19 3.54 0.45 1099 1.81 Nutrition 47.85 43.28 7.55 0.93 0.37 1072 1.62 Selection 42.59 39.60 12.80 4.26 0.72 1101 1.80 Price 6.26 21.05 36.57 19.96 16.15 1102 3.18 M N U i Source: Food Prices Review Board Survey Data, 1974. TABLE G - 22 Consumer Satisfaction with Frozen Vegetables and Their Characteristics, Ottawa-Hull, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatisfaction Satisfied ations Score 1 2 3 4 5 Froz. Veg. 18.76 55.58 21.02 4.51 0.11 842 2.11 Ease of Prep. 29.50 42.17 7.52 0.47 0.11 837 1.59 Price 8.40 30.85 38.41 15.72 6.60 833 2.81 Nutrition 21.35 50.50 20.72 5.65 1.75 796 2.15 Taste 20.43 48.14 23.39 6.57 1.55 837 2.20 Selection 26.31 42.50 21.54 7.73 1.90 840 2.16 TABLE G - 23 Consumer Satisfaction with Margarine and Its Characteristics, Ottawa--Hull, July , 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ Dissatisfaction Satisfied ations Score 1 2 3 4 5 Margarine 33.73 . 9.34 13.68 2.76 ' 0.48 833 1.86 Packaging 46.99 44.23 6.37 1.80 0.60 832 1.64 Taste 34.78 43.63 15.15 5.33 1.09 825 1-.94 How Easily Spread. 36.77 46.12 14.63 1.84 0.61 813 1.83 Price 4.84 24.90 33.53 18.46 13.24 823 3.00 Nutrition 29.53 43.85 19.26 5.57 1.77 789 2.06 N Source: Food Prices Review Board Survey Data, 1974. ro a* TABLE G - 24 Consumer Satisfaction with Canned Corn and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Alvavs Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ- Dis sat i s faction Satisfied vations Score 2 3 4 5 Canned Corn 32.16 55.17 14.72 1.92 0.10 . 937 1.90 Price 6.90 35.94 38.62 10.83 5.68 932 2.68 Selection Can Size 26.75 49.94 16.07 6.04 1.18 927 2.04 Taste 26.35 51.95 18.22 2.92 0.54 922 1.99 Amt. of Corn Vs. Amt. of liquid 27.92 53.06 15.03 2.90 1.07 931 1.96 Nutrition 22.77 47.80 20.74 6.76 1.91 887 2.17 TABLE g - 25 iriable Alvavs Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observ- Dissatisfaction Satisfied vations Score 1 2 3 4 5 IN PERCENTAGES Canned Tomatoes 28.41 56.16 14.31 0.99 0.11 908 1.88 Taste 29.28 53.26 14.47 2.87 0.11 905 1.91 Amount of Tomatoes Vs. Amt. of Liquid 23.41 46.17 24.08 4.88 1.44 901 2.14 Nutrition 26.46 50.70 17.68 4.21 0.93 854 2.02 Selection Can Size 34.22 45.59 15.05 4.45 0.66 897 1.91 Appearance 31.35 50.07 13.88 2.57 0.11 893 1.88 Price 8.67 33.81 36.15 13.57 7.78 899 2.77 Source: Food Prices Review Board Survey Data, 1974 TABLE G - 26 Consumer Satisfaction with Baby Food and Its Characteristics, Ottawa-Hull, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Baby Food 18.60 46.51 20.15 7.75 6.97 129 2.37 Taste 15.74 45.66 22.04 8.66 7.87 127 2.47 Freshness 21.70 55.81 16.27 3.10 3.10 129 2.10 Ease of Prep. 39.68 51.58 6.34 0.79 1.58 126 1.73 Packaging 36.71 46.87 12.50 2.34 1.56 128 1.85 Price 6.25 20.31 28.90 28.12 16.40 128 3.28 Nutrition 14.84 35.15 23.43 14.84 11.71 128 2.73 Source: Food Prices Review Board Survey Data, 1974 229 APPENDIX H A Summary of the Consumer Demographic Characteristics for Winnipeg Survey Participants, July, 1974. The age, income, occupation, and educational char acteristics of the Winnipeg consumers are given by the Table H-l. Corresponding data for Ottawa-Hull is given in Appendix F, Table F-l. 2.10 TABLE H - l i APPENDIX U A Summary of the Consumer Demographic Characteristics For Winnipeg Survey Participants, 1974 Variable Variable Absolute Relative Mean Name Class Frequency Frequency Value Sex 609 100,00 1.84 (1) Kale 111 16.11 (2) Female 577 63,89 Age (Continuous) 711 100,00 42.89 family Size (1) Total 715 Continuous 3.29 (2) Over 10 625 Continuous 2,21 (3) Under 18 468 Continuous 1.86 Employment Outside Home 724 100.00 2.20 (1) Yes 221 30.52 (2) Part-time 122 16,85 (3) Ho 381 52.62 Education (Continuous) 692 12.87 Occupation 692 100,00 4.16 (1) Professional 52 7.51 (2) Semi-professional 03 11.99 (3) Skilled Labor 221 31,93 (4) Owner of small business 14 2.02 (5) Technician 167 24,13 (6) Semi-skilled labor 62 8,96 (7) Unskilled labor 3 0,43 (8) Retired 90 13.00 Income 6BB 3.39 (1) Under $4,000 57 8,28 (2) 4,000 to 7,999 134 19,47 (3) 8,000 to 11,999 192 27 .90 (4) 12,000 to 19,999 163 23,69 (5) 16,000 to 19,999 71 10,32 (6) 20,000 or over 71 10,32 Mother Tongue 69? 2.12 (J ) French 4? 6.06 (?) Engliuh 51'J 75,00 (3) Olhor 131 18.93 Source: Food Priceo Review Board Survey Data, 1974, 231 APPENDIX I Levels of Consumer Satisfaction With Specific Food Products Winnipeg Respondents, July, 1974. The following tables summarize the response of the Winnipeg consumers to questions about specific food products. Each table refers to a particular product and its associated characteristics. Similar characteristics are measured across products to provide a basis for comparisons. TABLE I - 1 Consumer Satisfaction with Bread and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Bread 26.08 46.86 19.24 6.27 1.53 717 2.10 Brand 30.80 53.86 13.78 1.40 0.14 711 1.86 Freshness 37.02 45.02 14.44 2.38 1.12 713 1.85 Selection 38.15 37.73 17.02 5.24 1.84 705 1.94 Price 12.04 28.75 29.88 18.55 10.76 706 2.87 Packaging 4C.40 40.54 14.18 3.15 1.71 698 1.85 Nutrition 25.36 36.45 23.91 9.07 5.18 694 2.32 Taste 29.64 39.29 20.00 7.66 3.40 705 2.15 TABLE 1 - 2 Consumer Satisfaction with Ready to Eat Breakfast Cereal and Their Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Ready to Eat Breakfast Cereal 23.81 43.01 22.42 8.14 2.61 651 2.22 Packaging 34.78 43.01 13.50 6.83 1.86 644 1.97 Taste 24.10 40.53 27.85 5.32 2.19 639 2.20 Nutrition 16.40 28.28 27.18 18.28 9.84 640 2.76 Price 6.31 17.37 29.85 28.91 17.53 633 3.33 Selection 43.70 43.85 9.25 2.42 0.75 659 1.72 fO U) Source: Food Prices Review Board Survey Data, 1974 TABLE G - 16 Consumers Satisfaction with Beef and Its Characteristics, Ottawa-Hull, July, 1974. _1N PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Beef 10.73 50.23 31.91 6.29 0.83 1081 2.36 Taste 14.81 48.88 31.38 4.25 0.64 1080 2.27 Packaging 17.79 42.56 27.40 9.98 2.16 1062 2.36 Selection 19.73 39.75 28.30 9.87 2.32 1074 2.35 Freshness 18.90 47.78 26.05 5.83 1.41 1063 2.23 Amt. of fat 7.99 30.57 39.13 17.59 4.70 1063 2.80 Price 2.42 9.13 25.90 31.78 30.75 1073 3.79 Tenderness 9.31 35.28 40.31 11.73 3.35 1074 2.64 TABLE G - 17 Consumers Satisfaction with Eggs and Their Characteristics , Qttawa- Hull, July , 1974. IN PERCENTAGES... . Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Eggs 30.48 55.05 11.73 2.09 0.63 1099 1.87 Selection 48.89 40.53 8.18 2.02 0.36 1088 1.64 Nutrition 56.50 36.13 5.75 1.13 0.47 1060 1.52 Taste 42.50 43.42 11.22 2.11 0.73 . 1087 1.75 Freshness 34.40 42.93 16.51 4.95 1.19 1090 1.95 Packaging 48.47 37.76 9.32 3.23 1.20 1083 1.70 Price 9.40 20.92 31.88 22.02 15.76 1085 3.13 ro ro Source: Food Prices Review Board Survey Data, 1974 co TABLE 1 - 5 Consumer Satisfaction with Bananas and Their Characteristics, Winnipeg, July, 1974 IN PERCENTAGES.. Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Bananas 29.22 54.58 14.47 1.57 0.14 698 1.88 Taste 34. 20 53.47 11.30 1.01 690 1.19 Price 17.99 43.68 27.57 6.53 4.20 689 2.35 Appearance 24.63 50.58 21.13 3.20 0.43 686 2.04 Selection 32.89 47.16 16.30 3.34 0.29 687 1.90 Packaging 34.21 47.83 13.46 2.94 1.54 646 1.89 TABLE 1 - 6 Consumer Satisfaction with Fresh Tomatoes and Their Characteristics, W innipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Fresh Tomatoes 9.41 38.08 37.80 3.55 1.14 701 2.58 Taste 9.57 32.00 39.71 16.14 2.57 700 2.70 Price 4.16 16.06 36.01 31.13 12.62 697 3.31 Ripeness 9.61 35.72 38.30 14.49 1.86 697 2.63 Appearance 13.83 38.65 36.80 10.55 0.14 701 2.44 Packaging 19.61 44.10 26.25 8.70 1.32 678 2.28 Availability 21.26 43.67 25.14 8.47 1.43 696 2.25 to u Source: Food Prices Review Board Survey Data, 1974 ■P" TABLE 1 - 7 Consumer Satisfaction with Lettuce and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Lettuce 9.34 47.87 34.27 7.79 0.70 706 2.42 Freshness 12.66 47.08 33.57 6.25 0.42 703 2.34 * ' Appearance 10.18 40.89 39.02 7.89 2.09 697 2.50 Price 4.85 20.25 44.22 22.68 7.98 701 3.08 Packaging 19.04 45.49 25.14 8.28 2.03 688 2.28 Taste 16.18 49.28 28.36 5.58 0.57 698 2.25 TABLE 1 - 8 Consumer Satisfaction with Potatoes and Their Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Potatoes 19.27 48.36 26.95 4.25 0.85 705 2.18 Appearance 17.90 51.86 26.07 3.86 0.28 698 2.16 Packaging 22.85 49.49 18.19 7.27 2.18 687 2.16 Selection 25.93 45.67 22.04 5.33 1.00 694 2.09 Taste 21.75 48.55 25.36 3.89 0.43 694 2.12 Price 7.05 15.82 36.40 26.61 14.10 695 3.24 ro u Source: Food Prices Revlev Board Survey Data, 1974. m TABLE 1 - 9 Consumer Satisfaction with Canned Peaches and Their Characteristics, Winnipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Canned Peaches 27.70 51.22 17.07 3.65 0.34 574 1.97 Amt. Peaches vs. Amt. of Liquid 15.SC 42.09 28.77 11.72 1.59 563 2.41 Taste 25.13 49.55 20.88 4.07 0.35 565 2.04 Selection of can size 30.83 44.92 18.18 5.34 0.71 561 2.00 Nutrition 16.85 42.67 28.57 9.52 2.38 546 2.37 Price 7.65 27.27 37.79 20.14 7.13 561 2.91 Sweetness of Syrup 21.82 39.17 22.54 10.55 5.90 559 2.39 TABLE I - 10 Consumer Satisfaction with Frozen Orange Juice and Its Characteristics, Winnipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Frozen Orange Juice 43.18 40.70 12.81 2.47 0.82 484 1.77 Brand - Omit 57.35 36.55 5.46 0.42 0.21 476 1.49 Nutrition 30.47 45.27 16.73 5.79 1.71 466 2.03 Ease of Prep. 50.21 39.19 8.47 2.11 472 1.62 Price 16.24 32.91 34.81 9.91 6.11 474 2.56 Selection of Can Size 40.67 41.31 12.71 3.81 1.48 472 1.84 Taste 38.86 45.58 12.39 1.89 1.26 476 1.81 o» Source: Food Prices Review Board Survey Data, 1974 TABLE I - 11 Consumer Satisfaction with Fruit Juice and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction Satisfied ations Score 1 2 3 4 5 Fruit: Juice 26.30 52.44 17.03 3.20 1.01 593 2.00 Nutrition 26.79 42.20 22.41 6.83 1.75 571 2.14 Selection of Container Size 37.05 42.36 16.29 3.77 0.51 583 1.88 Taste 26.85 44.92 22.54 4.47 1.20 581 2.08 Price 7.53 24.14 37.84 19.34 11.13 584 3.02 TABLE 1-12 Consumer Satisfaction with Canned Corn and its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction Satisfied ations Score 1 2 3 4 5 Canned Corn 27.09 51.54 17.49 3.40 0.46 646 1.98 Price 11.19 33.43 36.70 13.68 4.97 643 2.67 Selection of Can size 32.08 48.67 15.18 3.75 0.31 639 1.91 Taste 26.98 51.58 19.20 2.06 0.15 630 1.96 Amt. of Corn vs. Amt. of Liquid 24.96 51.96 18.21 3.76 1.09 637 2.04 Nutrition 22.83 47.58 22.66 5.78 1.12 622 2.14 w u> -vj Source: Food Prices Review Board Survey Data, 1974 TABLE 1-13 Consumer Satisfaction with Canned Tomatoes and Their Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometime Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction Satisfied ations Score 1 2 3 4 5 Canned Tomatoes 27.53 54.71 15.03 2.17 0.54 552 1.93 Taste 27.32 50.09 16.39 3.64 2.55 549 2.04 Amt. of Tomato vs. Amt. of Liquid 23.57 47.69 21.17 6.44 1.10 543 2.13 Nutrition 30.26 44.17 20.30 4.51 0.75 532 2.01 Selection of can Size 34.25 45.00 16.29 3.70 0.74 540 1.91 Appearance 32.65 40.73 14.39 2.21 542 1.86 Price 10.47 31.43 38.60 14.33 5.14 544 2.72 TABLE 1-14 Consumer Satisfaction with Frozen Vegetables and Their Characteristics, Winnipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Kean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction Satisfied . ations Score 1 2 3 4 5 Frozen Veg. 20.50 55.42 20.50 3.22 0.33 590 2.07 Ease of Prep. 49.65 40.41 9.07 0.85 584 1.61 Price 9.53 31.54 39.34 13.34 6.23 577 2.75 Nutrition 26.23 45.42 23.06 4.57 0.70 568 2.08 Taste 22.85 47.76 23.19 5.15 1.03 582 2.13 Selection 38.31 44.67 12.88 3.78 0.34 582 1.83 ro w oo Source: Food Prices Review Board Survey Data, 1974 TABLE 1-15 Consumer Satisfaction with Margarine and Its Characteristicst Winnipeg, July, 1974* IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied nt ions Score 1 2 3 4 5 Margarine 38.89 45.07 11.85 3.17 1.00 599 1.82 Packaging 51.50 39.13 6.85 2.17 0.33 598 1.60 Taste 39.09 42.95 13.42 3.35 1.17 596 1.84 How Easily Spread 43.28 41.10 12.75 2.51 0.33 596 1.75 Price 9.98 25.31 32.62 21.74 10.33 561 2.97 Nutrition 33.21 44.71 16.32 4.26 1.48 539 1.96 TABLE I - 16 Consumer Satisfaction with Butter and Its Characteristics, Winnipeg, July, 1974 • IN PERCENTAGES..... Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Butter 37.34 45.55 12.74 2.96 1.39 573 1.85. Nutrition 38.17 42.83 11.11 5.01 2.86 558 1.91 Price 6.16 15.66 21.65 29.93 26.58 568 3.55 Freshness 32.75 43.78 17.33 4.55 1.57 571 1.98 How Easily Spread 35.45 42.50 16.22 4.05 1.76 567 1.94 Taste 34.79 43.93 15.11 4.21 1.93 569 1.94 Packaging 42.68 41.62 10.75 3.35 1.58 567 1.79 to u> vO Source: Food Prices Review Board Survey Data, 1974 TABLE 1-17 Consumer Satisfaction with Cheese and Cheese Frdocuts and Their Characteristics, Winnipeg, July, 1974. IN PERCENTAGES.,.. Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction Satisfied ations Score i 2 3 4 5 Cheese and Cheese Products 33.7; 53.46 11.49 1.10 0.13 722 1.80 Taste 36.-2 50.42 11.00 1.71 . 0.42 700 1.79 Packaging 42.97 43.80 10.66 2.88 0.57 694 1.76 Nutrition 1+5.69 43.06 8.75 2.04 0.43 685 1.68 Selection 51.29 35.10 9.16 2.86 1.57 698 1.68 Price 7.82 22.46 36.23 21.30 12.17 690 3.07 TABLE 1-18 Consumer Satisfaction with Ice Cream and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. Of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisvaction Satisfied ations Score 1 2 3 4 5 Ice Cream 33.33 48.71 15.23 2.11 0.60 663 1.87 Creaminess 33.73 46.20 17.02 2.28 0.76 658 1.90 Selection 38.45 35.76 20.56 4.76 0.44 671 1.92 Price 11.95 30.81 33.64 17.13 6.44 636 2.75 Packaging 37.24 46.16 12.36 3.59 0.62 639 1.84 Nutrition 29.16 43.10 19.23 6.89 1.60 624 2.08 Taste 35.95 46.62 13.65 3.29 0.47 637 1.85 Source: Food Prices Review Board Survey Data, 1974. to -p* o TABLE 1-19 Consumer Satisfaction with Milk and Its Characteristics, Winnipeg , July, 1974. * IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observations Dissatisfaction Satisfied Score 1 2 3 4 5 Milk «*3.38 47.20 7.05 1.32 1.02 680 1.69 Price 12.48 20.95 22.73 24.07 19.76 673 3.17 Freshness 35.78 43.70 15.98 3.96 0.56 707 1.89 Packaging 44.93 38.08 12.12 2.99 1.85 701 1.78 Nutrition 46.92 39.91 9.15 3.14 0.85 699 1.71 Taste 41.78 44.75 11.04 1.98 0.42 706 1.74 TABLE 1-20 Consumer Satisfaction with Eggs and Their Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Eggs 29.00 52.14 15.42 3.14 0.28 700 1.93 Selection 48.70 40.49 8.79 1.87 0.14 694 1.64 Nutrition 51.74 39.50 6.85 1.45 0.43 686 1.59 Taste 41.15 42.17 13.04 2.89 0.72 690 1.79 Freshness 37.06 40.86 16.86 4.50 1.45 688 1.93 Packaging 49.49 40.90 7.42 1.89 0.29 687 1.62 Price 11.01 19.27 30.29 24.20 15.21 690 3.13 M ■P* r* Source: Food Prices Review Board Survey Data, 1974 TABLE 1-21 Consumer Satisfaction with Beef and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES______Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissat is f act ion Satisfied tions Score 1 2 3 4 5 Beef 14.74 51.68 29.07 4.07 0.42 712 2.23 Taste 19.09 51.90 26.02 2.54 0.42 707 2.13 Packaging 26.54 41.17 22.95 7.60 1.43 697 2.17 Selection 33.94 41.47 19.74 4.54 0.28 704 1.95 Freshness 30.36 44.23 21.75 3.06 0.58 685 1.99 Amt. of fat 13.65 36.12 34.94 11.74 3.52 681 2.55 Price 6.24 . 11.61 23.36 29.31 29.46 689 3.64 Tenderness 13.30 40.93 35.96 7.89 1.90 684 2.44 TABLE 1-22 Consumer Satisfaction with Chicken and Its Characteristics , Winnipeg , July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Chicken 18.70 55.52 21.50 3.53 0.73 679 2.12 Freshness 23.94 20.42 5.81 1.98 0.28 705 2.15 Price 8.00 23.28 38.85 18.14 8.85 700 3.01 Tenderness 22.11 46.22 26.96 3.99 0.71 701 2.14 Taste 20.05 45.59 23.95 6.92 2.88 693 2.29 Packaging 27.14 43.83 20.90 6.82 1.16 689 2.10 Selection 31.00 40.32 22.70 5.09 0.72 687 2.03 mr Source: Food Prices Review Board Survey Data, 1974. iw TABLE 1-23 Consumer Satisfaction with Luncheon Heat and Weiners and Their Characteristics, Winnipeg, IN PERCENTAGES- July* 197*‘ Variables Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Luncheon Meat £ Weiners 13.32 49.92 28.73 7.22 0.90 623 2.32 Tenderness 2^.69 49.53 22.37 2.46 0.15 648 2.01 Packaging 27.82 46.67 16.84 4.94 1.39 647 2.08 Price h . 54 16.40 40.40 23.37 13.46 646 3.30 Freshness 15.31 44.49 28.37 8.83 1.70 645 2.38 Selection 23.25 47.16 16.84 5.97 0.76 653 2.01 Taste 13.69 47.23 30.00 6.92 2.15 650 2.36 . TABLE I - 24 Consumer Satisfaction with Pork and Its Characteristics, Winnipeg, July, 1974. IN PERCENTAGES Variables Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa Dissatisfaction Satisfied tions Score 1 2 3 4 5 Pork 14.06 57.34 25.31 2.96 0.31 640 2.18 Price 3.76 20.53 41.53 21.94 12.22 638 3.18 Selection 27.15 41.44 24.96 5.96 0.47 637 2.11 Taste 19.15 54.47 22.76 3.29 0.31 637 2.11 Freshness 23.66 51.88 22.10 1.56 0.78 638 2.03 Tenderness 18.79 51.34 25.59 3.63 0.63 633 2.15 Packaging 26.97 44.63 21.60 5.83 0.94 634 2.09 Amt. of fat 8.01 30.66 41.98 14.93 4.40 636 2.77 ro a*- u». Source: Food Prices Review Board Survey Data, 1974. TABLE 1-25 Consumer Satisfaction with Frozen T.V. Dinners and Their Characteristics, Winnipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observations Dissatisfaction Satisfied Score 1 2 3 4 5 Frozer. T.V. Dinners 11.42 33.33 38.09 14.28 2.85 315 2.63 Ease of Prep. 45.48 40.96 11.93 1.29 0.32 310 1.70 Truthfulness of Picture 6 Label 13.46 33.01 35.89 14.42 3.20 312 2.60 Nutrition 12.17 26.97 38.15 16.44 6.25 304 2.77 Size of Portion 8.41 23.62 41.10 21.03 5.82 309 2.92 Taste 19.48 22.68 37.38 14.37 6.07 313 2.64 Price 8.76 19.48 31.49 26.29 13.96 308 3.17 Selection 33.33 39.10 20.83 5.76 0.96 312 2.01 TABLE 1-26 Consumer Satisfaction wi th Baby Food and Its Characteristics, Winnipeg, July, 1974 IN PERCENTAGES Variable Always Almost Sometimes Rarely Never No. of Mean Satisfied Always Satisfied Satisfied Satisfied Observa- Dissatisfaction . Satisfied ations Score 1 2 3 4 5 Baby Food 29.63 36.11 16.16 12.96 4.63 108 2.26 Taste 22.11 28.84 48.84 16.34 3.84 104 2.50 Freshness 34.57 33.64 24.29 4.67 2.80 107 2.07 Ease of Prep. 40.95 40.95 13.33 0.95 3.81 105 1.85 Packaging 38.46 36.53 12.50 7.69 4.80 104 2.03 Price 25.47 28.30 19.81 12.26 14.15 106 2.61 Nutrition 24.03 30.76 22.11 15.38 7.69 104 2*5 1 . . .e* -s* Source: Food Prices Review Board Survey Data, 1974 APPENDIX J A Comparison of Store Ranking Positions With Ihree Alternative Price Index Formulations, Ottawa-Hull Price Survey, 1974. The following table compares the actual change in store ranking positions and the percentage difference between stores using: (1) a value share weighted index, where several value weights were applied to actual product sizes, like 14 ounce cans or 2 pound packages of margarine rather than per ounce or per pound, (2) a quantity share weighted index, where quantity weights were applied to reduce product sizes, i.e., per ounce or per pound across all stores, and (3) a per unit value share weighted index, where value weights were again applied per standard unit; i.e., one pound, one ounce, etc., across all stores. The per unit value share weighted index ( (3) above ) generates the widest spread between high and low stores (20 percent) while the quantity share weighted index (2) generates the smallest difference (15 percent). The ranking positions of stores are ident ical at the extremes for each formulation but shifts in rankings do occur where stores have very similar price levels. A value store weighted index (1) was employed in the study. TABLE J - 1 A Comparison of Store Ranking Positions with Three Alternative Index Formulations Ottawa-Hull Price Survey, 1974. Rank Value Share Store Rank Quantity Store Rank Per Unit Store Weighted Number Share Number Value Share Number Index Weighted Weighted Sept. 14 Index Index 1974 Sept. 14 Sept. 14 1974 1974 1 56.25 24 1 82.28 24 1 39.977 24 2 57.71 11 2 84.28 11 2 40.695 11 3 58.35 19 3 85.08 19 3 41.572 20 4 58.89 20 4 85.48 20 4 41.774 19 5 58.89 9 5 85.64 21 5 42.088 9 6 59.06 8 6 85.64 22 6 42.434 10 7 59.09 21 7 85.72 8 7 42.527 8 8 59.20 10 8 86.00 9 8 42.715 12 9 59.28 22 9 86.08 10 9 42.768 21 10 59.40 12 10 86.12 23 10 42.788 22 11 59.54 7 11 86.32 7 11 42.977 7 12 59.84 23 12 86.36 12 12 43.324 3 13 60.88 13 13 88.12 13 13 43.492 23 14 61.37 2 14 88.52 16 14 44.133 13 15* 61.37 16 15 88.72 2 15 44.213 2 16 61.76 25 16 89.56 3 16 44.359 16 17 61.90 3 17 89.68 1 17 44.838 15 18 62.05 26 18 90.04 5 18 44.961 26 19 62.07 15 19 90.20 18 19 45.158 1 20 62.13 1 20 90.48 25 20 45.184 5 21 62.49 5 21 90.96 26 21 45»464 18 22 62.69 18 22 91.28 5 22 45.710 25 (Continued....) Table J-l (Continued) Rank Value Share Store Rank Quantity Store Rank Per Unit Store Weighted Number Share Number Value Share Number Index Weighted Weighted Sept. 14 Index Index . 1974 Sept. 14 Sept. 14 1974 1974 23 63.08 14 23 91.48 • 14 23 45.865 14 24 63.23 6 24 91.68 6 24 4 6 . 1 6 0 6 25 64.05 17 25 92.84 17 25 46.435 17 26 66.30 4 26 94.44 4 26 48.020 4 18% difference 15% difference 20% difference between the between the between the lowest and the lowest and the lowest and the highest stores highest stores highest stores Sourcet: Food Prices Review Board Survey Data, 1974. 247 BIBLIOGRAPHY 1. BAIN* Joe S.* Industrial Organization. New York: John Wiley and Sons* Inc.* 1959* 2. B0ULD1NG* K.E,, "The Economics of Knowledge and the Knowledge of Economics"* American Economic Review (Proceedings) Vol. LVI* No. 2* May, 1966. 3. 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