92. Grocery prices. WinCo Foods, a large discount grocery retailer in the western United States promotes itself

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92. Grocery prices. WinCo Foods, a large discount grocery retailer in the western United States promotes itself as the lowest priced grocery retailer. In newspaper ads printed and distributed during January 2008, WinCo Foods published a price comparison for products between WinCo and several competing grocery retailers. One of the retailers compared against WinCo was Wal-Mart, also known as a low price competitor. WinCo selected a variety of products, listed the price of the product charges at each retailer, and showed the sales receipt to prove the prices at WinCo were the lowest in the area. A sample of the product and their price comparison at both WinCo and Wal-Mart are shown in the following table:

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a) Do the prices listed indicate that, on average, prices at WinCo are lower than prices at Wal-Mart?

b) At the bottom of the price list, the following statement appears: “Though this list is not intended to represent a typical weekly grocery order or a random list of grocery items, WinCo continues to be the area’s low price leader.”
Why do you think WinCo added this statement?

c) What other comments could be made about the statistical validity of the test on price comparisons given in the ad?

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Business Statistics

ISBN: 9780321716095

2nd Edition

Authors: Norean D. Sharpe, Paul F. Velleman, David Bock, Norean Radke Sharpe

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