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September 2001

Ripping Off The Poor At Safeway Doesn't Hurt?

By Karen Nakamura

The Safeway Market on the corner of Webster and Geary in San Francisco is a friendly place. Customers joke with clerks and the place is clean and fairly well-stocked. A community gathering spot, it's rare to find the aisles empty any hour of the day. But it's hiding a secret, of which even its clerks are probably unaware. Safeway is over-charging its customers.

While the wealthier Marin County pays what we will refer to as "normal prices," those in the Western Addition, (the Fillmore), in San Francisco, are forced to pay through the nose, buy in bulk or give up a certain privacy to join a store discount club.

Buying in bulk may be fine for those who have large families, adequate incomes or plenty of storage space. However, the majority of the Fillmore's residents live either alone or in family units of 4 members or less. The average apartment size is one bedroom. This combination of tight living quarters and less income makes purchasing a large number of any one item a virtual impossibility.

Where do you put 12 rolls of toilet paper, 16 boxes of macaroni or 4 large frozen orange juice cans when you have a small kitchen, an even smaller refrigerator, and virtually no storage space? And how do you pay out $20.00 for groceries when all you have is $5.00?

Single residents, many whom are elderly, have a particularly difficult time of it. The one large supermarket, (there's another but its volume is minor in comparison), Safeway, sells no single rolls of toilet paper. Sales usually run with the larger package items. Mayonnaise specials tend towards 2 large jars, "buy one get one free," a bargain, unless you go through a jar every 6 months. To make it on meager wages to the next payday doesn't afford the luxury of warehousing for box merchants so they can make excessive profits.

Special sales items are given almost entirely to club card members only. Club members are the only ones to be charged somewhat competitive prices. To get a card requires placing your name and phone number into the Safeway data base. While card membership is common throughout Safeway Land, the excessive prices are not.

Before we look at the numbers, a little history is in order. When the Western Addition was torn down and redeveloped in the 70s, the public demanded a good supermarket. They hadn't had one for years and had to shop out of district. The reason large chains didn't want to do business in the area, along with banks and numerous other retail outlets, was the large amount of shoplifting.

After much negotiations with neighborhood activists and government officials, Safeway finally agreed to open a store but only if it could re-coupe its shoplifting losses by tacking on a couple extra pennies to each item. It also incorporated one of the first box merchant approaches to its sales items. On paper, this seemed a reasonable compromise and permission was granted. To the joy of the neighborhood, the store went in. That appreciation is still prevalent today. The problem is not the store but upper management.

Let's look at the numbers. A comparison of items at 3 different stores will give us a clue as to the profits being raked in by Safeway stockholders. It should also be stated that San Francisco tends to be more expensive than the suburbs across the board. Even so, and counting in legitimate shoplifting costs, consider the tremendous volume.

We'll check the numbers from three stores, the Safeway in Redhill Shopping Center in San Anselmo, United Market in San Rafael and the Fillmore Safeway. So as not to glaze over the eye of our readers, we will compare only a few items. And, prices will only include Safeway Club Card prices.

Milk in the San Anselmo Safeway is $1.19 per quart, at United it's $1.08. In the Fillmore store, it's $1.59. That's Lucent Brand milk at the two Safeway's with its bovine growth hormone BST. United sells what is considered a more expensive Clover brand without BST.

Then there's eggs. An 18 pack at Safeway's, San Anselmo, is $2.99, $1.68 at United and $3.29 at the Fillmore store. It should be said that the 18 pack sometimes is on sale for 2 for 1. But what is a family of two to do with 36 eggs?

Ground beef at 80% meat, 20% fat is $2.59 at both Safeways but $1.03 a pound at United. At the Fillmore store, you can buy ground beef for $1.99, if you buy a minimum of 4.5 lbs. or take a less quality.

Neither Safeway sells single rolls of toilet paper. At the San Anselmo Safeway, the cheapest 4-roll is Softy brand for $1.49, United's Best Yet is $1.48 and you can buy singles. The Fillmore store charges $1.69.

These prices are only a few but others continue the pattern. The Fillmore Safeway charges the same as other Safeways, sometimes. More often than not, it'll charge $.20 more on items, items it sells hundreds of times a day, thousands of times a week and how many a month or a year. Shoplifting doesn't come anywhere near that sum. Next month, a look into the costs of shoplifting and the profits.

 

 

 

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