Why are Chatt. grocery prices higher than Knox.? (Knoxville, Chattanooga: sales, buy)

[BRH]

This is something I've noticed and always wondered about. I was just down that way today, and noticed it again. I live in between Knox. and Chatt. in Sweetwater (35 miles from Knox. and 60 from Chatt.), and I work in Knoxville. So I do most of my shopping in and around Knoxville, but occasionally I go down towards Chattanooga on the weekends.

I used to think that maybe it was just me and just certain items or stores, but it seems pretty consistent that Chattanooga and Cleveland grocery prices are overall more expensive than in the Knoxville region. It seems kind of odd since Knoxville is a larger metro area and I believe it also has a higher avg. income. So why are groceries and even clothes, etc. more expensive in the Chatt. area? Is it due to the fact that Chatt. is closer to a major metro area like Atlanta which has higher prices? Or, what I suspect, is it because Chatt. sits on the Georgia state line where sales taxes are much lower (therefore, the stores on the Tennessee side charge more to make up for lost sales)?

Just a couple of quick examples, today I bought a large size French Onion dip (normally about $1.80 in Knox. and it was $2.30 in Chatt. Also, I bought some Mayfield's Peppermint Stick Ice Cream that I saw for $3.80 yesterday in Knox., but it was $5.50 in Chatt. Wow, that's the highest I'd ever seen Mayfield's before. Heck, you can buy Blue Bell for that.

Anyway, just wondering if anyone else had noticed this or had any thoughts on why this is the case? Also, it's not one certain store. I've shopped at Wal Mart, Bi-Lo, and Publix in Chatt., and all seem higher overall than Wal Mart, Kroger, Food City, and Ingles in Knoxville. Also, I'm not complaining about the area or anything. I love Knox. and Chatt. both (although they are quite different), but was just wondering about the odd price discrepancy. Any thoughts?

[dasmarian]

Interesting question . . . I have a few theories:

1) Smaller market, less competition among retailers thus prices can be higher.
2) Smaller market, higher costs to haul fewer products from production to market.

Also, BiLo has declared bankruptcy a few months ago and is likely trying to hike prices to return to profitability. They have a whopping 60% market share in Chattanooga, which really is a problem. Food Lion is attempting to purchase BiLo at this point, but it may be held up because of the size of the market the entity would enjoy in Chattanooga. Until recently there was very limited choice in Chattanooga, and there is still a long way to go. Two or three Publix and a couple high end "natural" marketeers aren't going to solve the problem.

[TNKY]

Does this also apply to Aldi's, since they are known for lower prices than most grocery stores? Also, is there a reason Kroger has stayed out of Chattanooga?

[u4icmusic]

With Publix here, we don't need another high priced grocery chain here in Chatty. A trader Joes would be nice though.