General Manager’s Report
By Terry Appleby

Some Things Your
Supermarket Will Tell You
(That Others Might Not)

In the August issue of Smart Money magazine, there is an interesting article entitled "Ten Things Your Supermarket Won’t Tell You" by Anne Kadet. The premise of the article is that supermarkets commonly use deceptive practices that may harm or add additional cost to consumers, and that the stores are trying to hide those practices. In this and two future articles in the Co-op News, I will address her ten points and detail the Co-op’s practices.

1. Supermarkets jack up prices on larger sizes of items because consumers think they are better buys. For example, a 12 ounce size of a brand name product actually costs less, on an ounce per ounce basis, than the same product in a 24 ounce size.

Co-op practice: A member recently informed us that larger packages of toilet tissue at the Co-op were priced higher than smaller sizes of the same brand. This astute consumer also pointed out that a valid price comparison on toilet tissue was difficult to make because the unit of measurement was different for the various sizes. He took the time to calculate and found the best deals were on smaller sizes! In a random sample of our grocery aisles I was only able to find one other example where the larger size was more expensive per unit than the smaller. Tropicana half gallons were cheaper, per unit, than gallons.

It is not a policy of the Co-op to price larger size items at a higher per unit cost than smaller sizes, although this may occur in some instances. We certainly need to address the issue of common units of measurement on our price tags so as to make price comparisons easier. Also, the Co-op has a written business philosophy that commits the business to honest pricing and high ethical standards. Deceptive pricing would be a violation of that trust, and the Board would (and should) hold me responsible if we had such a practice at the Co-op.

Our merchandisers are continually reviewing our product database for discrepancies like the Tropicana example.

2. Supermarkets use coupons and weekly circulars to unload products that are more expensive than other brands. Some raise the retail prices on items during the week coupons are in newspapers.

Co-op practice: In our orientation of new staff, one of the messages we try to relay is that we are the buying agents for our members and not the selling agents of the store. Co-op buyers are trained to look for quality products that correspond to member needs. You can find examples of their work in all areas of the store, from the fresh seafood to the taste of an organic tomato. We use our advertising to feature real price reductions. We do not use coupons in our ads and have no control over either raises in wholesale prices or the placement of manufacturer coupons in newspapers. There may be times when the wholesale price of an item changes at the same time that a manufacturer’s coupon is featured in a newspaper ad.

3. Non-cardholders foot the bill for supermarket loyalty cards. If you do use a loyalty card you may pay with your privacy.

Co-op practice: All consumers pay the same price for goods at the Co-op. In years when a patronage dividend is declared, members who have patronized the Co-op during the fiscal year receive a refund based on the Co-op’s net earnings because they are owners. In no case is information on individual member buying habits sold to other organizations for marketing purposes. The Co-op’s Board of Directors has a policy (Executive Limitation Policy 1 – Treatment of Consumers) that expressly forbids making individual member data available outside the Co-op.

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