Supermarket Chain Adds 10% At Register, But Only In Some Stores
Nash Finch, a Minneapolis-based supermarket chain, adds a 10% fee to the bill at its stores catering to Hispanic shoppers in Colorado, reports 9News in Denver:
The Nash Finch stores Avanza, Food Bonanza and Wholesale Food Outlets add the 10 percent charge to food at the register and specialize in serving Hispanics, according to store workers.
However, the Nash Finch stores Sun Mart Foods, Econo Foods, Family Fresh Market, Pick N Save and Prairie Market stores do not charge extra at the register and do not cater to Hispanics, according to the store workers.
"Jim," a store manager, told the news station that the fee is to offset other costs, but it's clear that the 10% charge is at least partly a way to offer steeper "discounts" throughout the store that are effectively removed when you pay.
Nash Finch denies it's doing anything skeevy or illegal with its unclear pricing, but 9News points out their attempt at full disclosure is confusingly worded, perhaps deliberately so:
"The 'shelf-plus' pricing program is only used in certain store formats. These stores tend to be located where consumers are more price-conscious, as compared to our more conventional supermarkets," said Brian Numainville, Public Relations for Nash Finch Company. "The pricing policy is explained, not just in English, but also in Spanish, so that no customer is caught unaware at the cash register."
The stores do advertise that they are going to add a 10 percent fee in signs posted across the store, on the store shelves below the price of a food item on the store shelf and in flyers and circulars. However, the wording is confusing to many. For example, the flyers read, "A great way to save - Plus 10 % at the Register."
What do you think—is this an acceptable way to price groceries? In a series of questions Nash Finch answered for 9News' story, they claim that they're not the only chain to do this, and that it's not just Hispanic markets. Here's their final justifaction for the practice:
Question 9: Wouldn’t it be more honest/up front to just add 10 percent to the price of all of the products—so that people can see the actual price on the shelf and on the sticker?
Answer: The grocery industry is extremely competitive. Stores vie for customers. Customer loyalty is highly valued. Given the need to attract and retain customers, our stores cannot afford to alienate its customers by charging unexplained fees or unanticipated mark-ups. Our pricing is attracting customers—rather than losing them--demonstrating that the pricing policy is in fact fair, obvious, and well-understood by our shoppers.
"Some grocery stores add 10 percent fee" [9News.com] (Thanks to Randy!)
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Comments:
I don't understand how this could possibly benefit the consumer, vs marking prices down wherever possible and keeping them the same as other stores when not possible. Am I missing something?
"A great way to save - Plus 10 % at the Register."
to me, if i handnt read the story i would think i was getting an extra 10% off, because only a moron would add a 10% fee. and if its only at hispanic targeted stores it is flat out racism.
Gee, I thought all states have laws on their books which require supermarkets to have accurate prices on their merchandise with penalties against the supermarket for prices that were higher at checkout. Adding 10% to every bit of merchandise would certainly seem to violate such laws. Let's hope that the AG's office gets involved real quickly.
"A great way to save - Plus 10 % at the Register."
Save by being charged an extra 10%! Sign me up!
"our stores cannot afford to alienate its customers by charging unexplained fees or unanticipated mark-ups."
Like a 10% fee imposed at checkout.
"Our pricing is attracting customers-rather than losing them-demonstrating that the pricing policy is in fact fair, obvious, and well-understood by our shoppers."
I would argue that it demonstrates exactly the opposite - that people don't understand that they are getting ripped off.
Can I pay them with a check? It will be "minus 110% when you try to cash it."
This makes no sense at all...It would be like advertising a 2 liter of Pepsi for 25cents * (plus 200% added at register).
@jusooho: im with you, it makes no sense. but I have to wonder, are you paying more with that added 10% or about the same if you went somewhere else..
Why don't they do what everyone else does and make everything cost more in poor neighborhoods?
Here's a quote from one of the store workers explaining the 10%:
"This is for taxes in Mexico and we think that people would feel better if they are charged for taxes as if they were in Mexico," one worker said.
I know if I were from Mexico, I'd feel a heck of a lot better knowing I was paying 10% more than everyone else.
It's just a clever way to confuse people, and make it more difficult to comparison shop.
They say:
"our stores cannot afford to alienate its customers by charging unexplained fees or unanticipated mark-ups"
But that's precisely what they are doing - charging unexplained fees. How do they get away with this?
What a stupid idea - and someone was paid to come up with this? I can't imagine shopping anywhere that said they'd just add 10% to my total. That's nuts.
I'm glad to see everyone else is as confused about this as I am
Colorado should have a Department of Weights and Measures to put a stop to such practices... it is deceptive at best.
That gives me an idea:
I'm going to start a store called "Free Stuff", with no price-tags at all on anything.
Then, when people come to the registers, I'll charge them full price.
Or better yet, at a higher markup, since I'm providing them with the unique service of not having to worry about prices when browsing.
Who wants in??
Reminds me of Ebay sellers with extra-low prices & HUGE shipping fees. Sneaky and unethical. And, in the supermarkets' case, because the clients are mostly Hispanic, it has the appearance of being quite ugly.
I found this interesting (in the original article):
"This is for taxes in Mexico and we think that people would feel better if they are charged for taxes as if they were in Mexico," one worker said.
I'm assuming the worker means that this mimics the way things are priced in Mexico, so maybe their customers who are used to Mexican prices find it easier to compare - maybe. It's a half-baked rationale. Esp since a) shoppers in Colorado are not comparison shopping in Mexico and b) I'm assuming groceries there are priced in pesos. So I think it's actually a completely unbaked rationale.
@techstar25: Definitely a way of getting people to buy more because they don't realize the discount isn't really that great.
So the place across the street should start charging "Plus 20%", then "Plus 505" then eventually, everything in the damned place is "Free* *plus cost of item determined at check-out".
I love this part: "Given the need to attract and retain customers, our stores cannot afford to alienate its customers by charging unexplained fees or unanticipated mark-ups."
This is corporate double-speak on a level that you just can't make up. 10% at the counter is an unexplained fee! If you can't afford to alienate customers in this way, then for fucks sake stop doing it! Or perhaps they mean that they can't alienate customers, but lying to them is just fine.
Dear Avanza:
You do not exist where I live, but I would NEVER shop at your store. Your pricing scheme is unnecessarily obtuse and is clearly an attempt to take advantage of your customers by impressing upon them a low price, which will never be representative of the actual cost of the products. This is intentionally deceptive. Stop pretending like its not.
@windycity: I saw that too. That quote sums up everything. As far as I can tell Mexico has a 10% tax on merchandise. So when Mexicans come into the US based supermarket they see no problem with paying what they think is the same tax they paid back home. However, the supermarket simply pockets the "tax" for itself.
Sure, I don't agree with a different price at checkout vs. what's on the shelf, but I have a question to all the people claiming it's racist. Isn't having stores that "specialize in serving Hispanics" racist in itself? Treating one race different than another, isn't that the definition of racism?
That is just the most convoluted, stupidest thing that I have ever heard. The main question I have at this point is how does the final price of a product compare to the final price of the same product at one of their other stores? If it is higher, then they'll really be in some trouble. If it is the same or lower, then I kinda understand what they are trying to do. I'm not justifying it, just saying I understand. Either way, it's stupid, and now that the cat is out of the bag, this whole scheme will hopefully go away. Unfortunately for them, so may all of their business.
Clearly illegal, IMO.
The only purpose of the scheme is to make prices look lower than they actually are. There is no legitimate purpose.
These stores are taking advantage of what are probably less educated, non-native English speakers who are less likely to complain. It's racist and pretty sickening.
@MayorBee is getting what plants crave: Yah, I'm not so sure it's as much a race thing as it is an attempt to exploit a segment of the population that they perceive may not be able to comprehend what they are trying to do.
It could also be that they are trying this on one segment of the population as a test-run, with the idea of rolling it out company-wide in a few months.
"Coming soon, to a poor area near you, lower prices PLUS 10% at the register"
From the store's perspective, this sounds like a great way to increase revenue.
Of course it also sounds illegal, IMHO.
definitely would be better to have the real price on the shelf, then discount at the register, this is a retarded way of doing things....
@Rectilinear Propagation: Because this way not only do they do that, they get the added bonus of tricking others into thinking they're saving. Pretty smart, price gouging and bait-and-switching at the same time!
@econobiker: Not stupid, but certainly less educated. It's common for many of the illegals to have not much more than a grade-school education.
@CarlR: Like a 10% fee imposed at checkout.
Exactly what I was thinking. Mind blowing cognitive dissonance, even for PR speak.
"Customer loyalty is highly valued"
That maybe, but somehow I don't think the actual customer is highly valued.
This reminds me of those 'free' Sam's Club day-passes they send in the mail. The fine-print explains there's a 10% 'service fee.' Pffft -- the prices aren't that great to begin with; I don't understand how anyone could think that was a good deal.
That's a BS pricing scheme. Even if it's not illegal, it's absolutely not ethical- especially since they don't do it across all their stores. What's wrong with just putting the damn price on the shelf, and pricing items to include the stores cost of shipping/storage/etc.? (Oh, say, like the rest of the retail brick-and-mortar stores do?)
I also wonder why they don't do this at the Family Fresh foods in the very white, upper-middle class suburban neighborhoods?
Not to stir the pot, but you think the store is charging the 10% fee because of the hassle of serving spanish only speaking customers? People who speak mutiple languages do tend to be paid in more in wages for the knowledge. Plus the store could have a huge theft problem.
@jusooho:
The only thing I can think of is lowering sales tax in some way. This seems like one of those "A 17% gratuity will be added to parties of 6 or more" things restaraunts pull. Which I think is bull to begin with.
So in Los Angeles, sales tax is 8.25%. That would be roughly $8.25 of a $100 sale, and if the 10% is added after that you still only pay $8.25 tax, so your bill would be $118.25 where as if its added pre-tax your bill would be $119.08 (if I did that correctly) so your saving a whole .75 cents.
Again that just seems like what it is to me.
Sounds like a program designed to confuse people into thinking the deals are either A)10% off (That's how I would read it without fine print) of B) Just really low prices per item without looking at the total.
Are they donating the money to Mexico?
@ludwigk:
I would say one should also avoid the company's other brands, as well: Sun Mart Foods, Family Thrift Center, Econofoods, Prairie Market, Food Bonanza, Family Fresh Market, & Pick N Save Stores (all helpfully laid out on this map, in the blue states).
This company does not deserve our business.
@htrodblder: So why not just add that to the shelf price? If the store has extra costs due to mulit-lingual employees, then they should just raise the prices of their products. Doing it this way seems shady and as if they are deceiving their customers. Stores have every right to raise prices, however, they need to make sure their prices are clearly displayed.
At first I thought maybe it was one of those deals where you only get the lower price if you use one of those store saver cards but obviously not. There does not appear to be any logical reason for it other than racism and classism. Yuk indeed.
Our Walmarts are heavily geared at hispanic shoppers. I have also noticed a high incidence of prices at the register being much higher than the shelf or tag price. This makes me wonder if this is some inside industry tactic based on some tidbit of statistics like most poor hispanics don't read receipts or something.
If a store that I shop at did this sort of thing, I'd leave and never come back. There's too much competition to put up with this sort of shit.
This is fucking incredible. Someone should be fined and imprisoned.
@oneandone: There's a reason ebay sellers do that, it's to avoid paying ebay seller fees. You are charged a percentage of the final value of your sale in fees by ebay, but shipping is not counted. Thus, if you sell a $100 item for $100 and $10 shipping at 10% fee (made up numbers) you will have to pay $10 to ebay, but if you price the same item at buy it now price of $10 with $100 shipping, you only pay $1 fee. I don't understand why buyers care, it is irrelevant to them the cost of the shipping vs. item, as long as the total cost is cheap enough to warrant purchase. The only problem I could see is if the purchase was to be tax deductible or a business expense.
@Shadowman615: Yeah, I wasn't sure whether to comment on that line...if the implication was the Hispanic stores had more theft than other stores or what....
@VPea: I think you're taking that the wrong way (or maybe I wrote it badly). The educational opportunities for poor Latin-Americans are slim. According to the center for immigration studies, " Almost two-thirds of adult Mexican immigrants have not completed high school, compared to fewer than one in ten natives. Mexican immigrants now account for 22 percent of all high school dropouts in the labor force."
To try to put that more politely, all I was saying was the store may in fact be using a stunt like this to take advantage of a less-educated demographic.
False advertising, bait and switch and what appears to be racism...can't go better than that!