December 02, 2007

[Monopolyism] Grocery Stores


There are only two large grocery stores within a couple kilometers from my home: Safeway and Save on Foods (I try to stay away from both of them as much as possible, favouring the weekly farmer's market, the two small organic food providers and other small businesses which provide local goods). Nevertheless, when I do go to either of the aforementioned grocery stores, I can't help feeling annoyed at the implications of their respective "club cards", which allow you to both accumulate "points" (god knows for what), and more recently, get a discount on your bill total.

This is not a new phenomenon by any means, and to a certain extent... [click on link below to expand to full post] I can see the value in having a "rewards card" for someone who is going to spend lots of money at a certain store, perhaps they should get something out of it (even though we all know it's just a marketing ploy). But what I have noticed emerging more and more recently - and which I take issue with here - is the varying prices for goods depending on whether or not you are part of the club. At both of these chains every item is listed by it's "member" and "non-member" prices. I would bet that the majority of goods are offered cheaper to people who sign up for the club cards. Any person in their right mind can see that you simply pay more for the exact same goods if you don't flash their member card - and this is why most of us (myself included) are compelled to join the club. But from an ethical standpoint, does it not seem WRONG to charge different prices for the exact same goods - merely based on whether or not someone is willing to divulge their personal information? This is blatant favouritism for the status quo; and its part of large chains' attempts to acquire monopolies in the food industry.

I think the chains do this for three main reasons: a) to promote brand loyalty, and b) to get marketing information on people and their demographic, and c) to coax you into buying more than originally planned. And it is precisely for these reasons that legislation should force grocery stores to stop this nonsense. First of all, their first goal likely fails because when it comes to items with a low elasticity of demand (such as food), people tend to buy these goods wherever is most convenient. Second, we don't really know what these chains are doing with our personal information, which everyone seems to be offering without concern to these massive corporations. Are they selling our info to any marketer who can afford it? DEFINITELY. Are they using the info from our scanned club cards to track our purchases in order to inform their demographic-based marketing and distribution strategies? YES! Are they sending us useless materials and emails and advertisements? OF COURSE. But do any of these things offer anything positive to the building of a better society. NO. Finally, in some cases, the rewards or points offered DO coax people into buying more from that store, and this is blatant manipulation that should not be allowed. Let's face it, we're talking about food here - we all need it. It should be offered to any citizen at a reasonable price, and if anyone should be paying higher prices it should be those who can afford to pay higher prices, not those who have chosen not to become members (or are unable to). What about transient and homeless people? They are likely not going to sign up for a member card if they don't have a fixed address and shop at the same location on a weekly basis. And yet these people - some of the most vulnerable in our society - are forced to pay more for a friggin' apple?! IT'S NOT RIGHT!

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