Hank Investigates: Retail roulette

The same gallon of milk in the same grocery store chain on the same day, two different towns. You think the price will be the same?

Shopper
"I would expect them to be the same."

But our price check found they're not: here milk is $2.99. Here it's much more expensive: $4.15.

Shopper
"Well I don't like that."

These tooth-whitening strips: $29.79 at a discount chain. But in the same chain, same day, different town, the same product is 32.79! $3 more!

Shopper
"I think its unfair."

Our investigation uncovered a shopping secret. In side by side comparisons we found mystery markups and markdowns in all kinds of chain stores.

It's legal, it's deliberate, and it's calculated to make a profit.

Hank
"Do people know this?"

Dr. Nora Ganim Barnes, UMass Dartmouth, Center for Market Research
"No, I don't think anybody has any idea."

Check the prices at grocery stores, we went shopping in Wellesley and on the same day, at the same chain, in Medford.

Bottom line: prices were often different.

Miracle whip in Medford was $2.50; but 9 cents more in Wellesley.

Cool whip in Medford: $2.19; but in Wellesley, it's 20 cents more.

And remember that milk? Much more expensive in Wellesley.

But look: Paper towels in Wellesley were cheaper, just 3.99.

OJ was cheaper in Wellesley, too.

Hank
"It's the same store, why are the prices different?"

Insiders reveal: to get shoppers in the door big chain stores are letting each location set its own prices.

Jon Hurst, Retailers Association of Massachusetts
"It's local control, local management, and changing your own strategy to adapt to your customer."

Price check this discount store: we chose items in the Dorchester location.

Then on the same day, the same chain, the same products in Watertown.

When there was a difference, the price was always higher in Dorchester.

Apple juice, baby food, dental floss, Cheerios, and white strips.

Why? Experts say each location has to make a profit, after paying rent, security, insurance and employee salaries.

Jon Hurst, Retailers Association of Massachusetts
"You certainly aren't in business to lose money."

But we found often prices go up when there's no neighborhood competition, forcing shoppers to pay for convenience.

Dr. Nora Ganim Barnes, UMass Dartmouth, Center for Marketing Research
"Some of us are willing to pay more than we should, because in some ways it help our life."

Hank
"And the stores know that?"

Dr. Nora Ganim Barnes, UMass Dartmouth, Center for Marketing Research
"Absolutely know that."

But the place with the lowest price one day, may not be lowest the next. We found even what's on sale is different.

The same cellulite cream is on sale for $9.99 in a Newbury Street drugstore, but at the Blue Hill Avenue location, it's full price: 4 dollars more

If you find the same item is priced differently within the same chain talk to the manager. They'll almost always match the lowest price.

(Copyright (c) 2006 Sunbeam Television Corp. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)