Grocery Store Prices and Club Cards

In Southern California grocery store prices have been climbing over the past several years (1999-2001). Some prices have gone up just 10% to 15% others have jumped more than 30% to 50%. A good example of how prices have been held artificially high is the price of coffee.

In 2001 the price of coffee beans were at its lowest in 25 years. The coffee growers were suffering because of the extremely low coffee bean prices. But at the major grocery stores the prices were still rather high. Examples while major stores like Walgreen’s, K-Mart and Target were selling coffee from $1.60 to $2.99 an 11oz or 12oz can, major supermarkets were still selling the same brand name coffee for $3.99 to $4.99 a can. Why were they gouging, because the consumer let them by buying the coffee at the extremely high prices. Do you think they passed these profits on to the farmers and raised the price of coffee beans?

No Way!

We have also seen the prices of bread jump over the past year and a half.

The major grocery store chains across the country have used economic pressure to force their customers into using so called “Club Cards.” The customer is supposed to get better grocery prices and special sales when they show these cards at the time of purchases. Most consumers know that the stores raised the price of groceries and then created a lower price for those who use the “Club Cards.” The higher prices are created by the stories and would not be competitive prices in the market place.

Example they can says that a 2-liter bottle of coke costs $1.69, but they will save you money by selling it to you for just 99-cents. But in reality most of the time they sell the 2 liter bottle for 99-cents, so you are not saving anything. In fact one major story increased the price of the 2-liter Pepsi bottle to $1.33 and posted the price as 3 bottles for just $3.99 saving the customer $1.08. When I asked the manager if he could ever remember when they sold a 2-liter Pepsi bottle for $1.69, he said he could not but that was the price without the club card. So they increased the price by about 1/3 and then said you are saving a dollar. I wish I could do that type of math when I filed with the IRS.

What happens when the grocery store swipes your “Club Card” so you can have the so-call special prices? The store computer records who you are and all the groceries you buy and what price you are willing to pay for them. It tells the store what your “purchasing patterns” are and what band name products you buy. Many stores sell this information to the manufacturers of products. In fact you get coupons for competing products to the ones you just bought as you leave the check stand. If you buy XVX Brand of extra soft toilet tissue, you may get coupons to buy WXY Brand of toilet tissue.

When the “Club Cards” first came out some stores wanted you to give them your Social Security Card numbers. You should never give your Social Security card number for identification. In fact using a Social Security Number for identification is against the Federal Social Security Act. The problem is there is no penalty listed in the Act for using the Social Security Card Number for identification. That part of the Act needs to be updated.

The stores quickly dropped the requirement for Social Security Numbers but now they ask for your driver’s license number, your home phone, your home address, your sex and if you are married. Why in the world do you need to give all that information to buy a loaf of bread or a can of coffee? I suggest if you are forced into having a Club Card to be able to buy your groceries at a reasonable price that you put phony information on the application. (It is not against the law) You will get the card but you will keep your personal information private.

Remember there are still many grocery stories that do not require “Club Cards” and they have good prices and real sale prices. Example: Many of the major grocery store chains require you to use a “Club Card” when buying items on sale for 99-cents, like Heinz ketchup, mustard, or steak sauce. But these items are always .99 or $1; at 99-Cents Only Stores or Dollar Stores and you do not have to have a “Club Card” to by them on special sale. So the obvious question is why do you need a special “Club Card” to buy them at the regular price at a major grocery chain store? The answer is because they say so! Bottom line is you need to be a careful consumer and compare prices. If you think you are being taken advantage of, use your major consumer power, your feet; go to a competitor with a better price.