Question

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

Item	WinCo	Wal Mart
Bananas	0.42	0.56
Red Onions	0.58	0.98
Mini Peeled Carrots	0.98	1.48
Roma Tomatoes	0.98	2.67
Deli Tater Wedges	1.18	1.78
Beef Cube Steak	3.83	4.118
Beef Top Round London Boil	3.48	4.12
Pillsbury Devils Food Cake Mix	0.88	0.88
Lipton Rice and Sauce Mix	0.88	1.06
Sierra Nevada Pale Ale	12.68	12.84
Gm Cheerios Oat Clusters	1.98	2.74
Charmin Bathroom Tissues	5.98	7.48
Bumble Bee Pink Salmon	1.58	1.98
Pace Thick & Chunchy Salsa	2.28	2.78
Nalley Chili	0.78	0.78
Challenge Butter	2.18	2.58
Kraft American Singles	2.27	2.27
Yuban Coffee FAC	5.98	7.56
Totinos Pizza Rolls	2.38	2.42
Rosarita Refried Beans	0.68	0.73
Barilla Spaghetti	0.78	1.23
Sun-Maid Mini Raisins	1.18	1.36
Jif Peanut Butter, Creamy	2.54	2.72
Dole Fruit Bowl	1.68	1.98
Progresso Chicken Noodle Soup	1.28	1.38
Precious Mozzarella Ball	3.28	4.23
Mrs. Cubbison Seasoned Crotons	0.88	1.12
Kellogg's Raisin Bran	1.98	2.5
Campbell's Soup at Hand	1.18	1.26

1. What is the null and alternative hypothesis to the case above?
2. Copy the data into excel and do an analysis to test the hypothesis
3. What is the conclusion of your analysis? (State it in terms of the case or scenario)
4. 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?

Answer 1

The Statement “ 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” tells us about the claim of the WinCo, they are saying that their prices are lower than Walmart. A claim is always put as the alternate hypothesis unless the claim is about equality in means. We are going to test this claim by checking the significance of the difference in prices.  

In Excel, the test is of One line.

=T.TEST(B2:B30,C2:C30,1,2)

=T.TEST(Array 1,Array 2,One-tailed(1),type(2)(two paired equal variance) )

This gives you P-value of the test, which = 0.2545 which is the probability of the null hypothesis to be true. If it was less than 0.05, we would have rejected the null hypothesis.