I just can’t figure out how companies price things, how they manage to rack up such huge profits without a revolt from consumers.
Three examples:
- One can of chunk light tuna at Albertsons, 99¢. Safeway: $1.29. The same can at Target, 36¢.
- Six pack of plain Klondike ice cream bars at Albertsons, $5. Safeway: $3.99. Same six-pack plus one extra Heath bar flavor at Target, $1.30.
- Eight pack of Shick Quattro razor blades at Albertsons, $18.99. Same blades at Safeway, $20.39. I’m on my way to Target now to buy some.
So, why so expensive? Is it simply what the market will bear? With the price of a can of tuna so high, it’s no wonder that people talk about seniors eating cat food instead.
A can of store-brand cat food: 25¢.
In good ol’ Illinois, tuna is only $.25
You should see how cheap houses are.
Well, I think you should qualify that statement — that’s southern Illinois, pal.
This is one of their dirty little secrets. The price is not set by anything other than what the market will bear. And it gets worse.
In Anchorage Alaska, Safeway has a dozen stores. The prices from store to store aren’t even close. Only the specials published in the paper match everything else is…what ever.
Please note that there is a direct relationship between the cost of goods and the income of the neighborhood. The highest prices were in the poorest neighborhoods and at first the Store manager said the higher prices were to cover the higher shoplifting rates in the poorer neighborhoods. But when shown that Safeway the corporation has a built in percentage for loss to cover shoplifting and employee theft and that this store in the poorest neighborhood was under the national average the manager finally admitted the truth. We can’t charge these prices in the wealthier neighborhoods because the customers will simple drive to another store for a better deal but the people in this neighborhood walk and can’t shop at other stores.
And there is the answer….
Hmm.
At my new house, the only grocery store close by is a Safeway — and I never shop at Safeway because a) they have high prices, b) the employees are surly, and c) the stores are always dirty.
This particular Safeway is jammed with college students, as I am moving a few blocks away from Santa Clara University. So, I’m thinking that the prices there — using Tim’s logic — will be rather high.
Thankfully, they are in the process of building a Target within a mile of my new house, so I’ll soon be able to dash over there for tuna and ice cream.
Looks like I’ll be running out to Costco more often…
Uh, Gene, you are the one who just posted the Jib-jab about Big Box stores. Target (or Wal-Mart) can price things so low because they have minimum-wage employees, get cheap stuff from overseas, etc etc. Safeway can’t subsidize its food products with cheap Chinese clothes, its employees are union so they make decent money (no excuse to be surly) in fact a Safeway store manager makes more than I do — maybe I should apply.
It’s like the local cleaners and gas stations protesting that Wal-Mart is driving them out of business because Wal-mart can undercut their pricing. Target is apparently little better:
http://www.retailworker.com/node/6811
I don’t believe that Target is even in the same ballpark as Wal-Mart when it comes to a) employee treatment and b) moving of jobs to China. This may be because Target isn’t as big as Wal-Mart and therefore can’t dictate to manufacturers the same way.
As for unionizing Target, well, it’s been my understanding that Target generally pays better than Wal-Mart and isn’t as sneaky with their employment practices. But yes, they should allow unions and any company that fights a union is automatically suspect in my opinion.
So, when I pay $1.29 for a can of tuna at Safeway, I’m paying for higher wages for surly and nasty employees? Hmm. Costco pays the highest wages in that industry, and employees get full benefits including health care. Granted, their prices are subsidized by member fees, but still — I can’t understand how Safeway can justify $1.29 for a can of tuna.
All companies fight unions, but in some cases (such as my own company) we state that there is no need for a union, which is true. I was a manager for Kroger for years, a union shop, and I have come to the realization that the biggest threat to orginized labor is the unions themselves.
…but I suppose that still doesn’t answer your tuna question.