This study overturns the conventional wisdom that big cities have more expensive groceries than smaller ones. A household that moved from Des Moines to New York and purchased goods from the same type of stores in the two cities would realize a 10% drop in the overall cost of its grocery purchases.
This study compared identical products sold in cities big and small, both at high-end grocery stores and discount retailers. In nearly every case, New York products were cheaper than in places such as Memphis, Indianapolis and Milwaukee.
For city residents who feel their entire paycheck is consumed by food this study seems unbelievable. The reason New York is perceived to be expensive is because there is so much you can spend your money on. The perception of higher costs comes from the vastly expanded food choices available in a major metropolis like New York, which throws off the average prices used in cost-of-living calculations.
Bigger cities also tend to be wealthier than their smaller counterparts, and the grocery-variety gap between New York and Des Moines is filled with many fancy foods that cater to wealthy customers. For example, since New York has more stores selling more varieties of cage-free organic eggs, the average price of eggs that factor into a cost-of-living index appears higher. But when you compare the same products for sale in similar grocery stores in different cities New York and other large cities were found to be cheaper all around when compared with smaller cities. Expensive foods at New York's high-end stores were less pricey than the same products in smaller cities, and inexpensive foods at New York's low-end stores also cost less than their Iowa equivalents.