Ironically, some of their stuff is priced the lowest of any store in a ten-block radius, here.
Cheap items like peanut butter, pasta, milk (well, relatively cheap) are all cheaper at the WF in our neighborhood than in nearly any other supermarket in a ten-block radius. I'm no economist, but, clearly, when they have a 68,000-square-foot store, they can afford to undercut everyone else... Prices at other chains, with drastically less square footage and much smaller corporate support/infrastructure, are forced to mark up each item colossally just to get by.
Which is why rents near Trader Joe's and Fairway (probably the closest direct competitors to WF in Manhattan in terms of store size and corporate support) are ridiculously high. If we moved twenty blocks uptown, we'd pay a lot more in rent--but we'd probably save overall (not just on cheap items) in grocery costs.
/brought to you by the random speculations of an English major who never took an Economics course... smileys/wink.gif