Safeway Implementation of "Sugar Drink Tax" in Boulder, CO

[storewanderer]

Looks like they tried to pull a fast one and put the tax on non-sugar drinks too.
http://www.dailycamera.com/news/boulder ... ake-profit

Whether intentional or not, what is the matter with the people working in the stores who hung those tags? It is very clear when you look at the product if it is not with sugar... someone in the stores should have noticed this and said something. It never should have gotten this far.

Not to mention the failure at the corporate level for not having the data right. They are who should have gotten it right. But then it is the stores who are there and have the product in front of them and are hanging the tags so they are a second check...

The stores should know by now how poor Safeway's IT and systems are...

[storewanderer]

http://www.dailycamera.com/news/boulder ... source=pkg


More on this topic:
From the article:
""I'm a little baffled why CU would think they would be exempted," Mayor Suzanne Jones said. "This was on the ballot ... and we've been wrestling with this for six months."

By an 8-1 margin, the council granted CU a delay for one year — not two, as the university had requested.

Some council members lamented the haste with which the council was attempting to sort through complex questions of implementing the tax.

"I think it's flawed in so many ways," Mayor Pro Tem Andrew Shoemaker said. "I'd be happy to vote that it doesn't go into effect in July."

Councilman Bob Yates added later: "This is horribly written. This is a really, really bad law, and we're stuck with it.""

[klkla]

There are so many issues here.

At the root of it is obesity in the U.S.A. which has reached epidemic levels. That has been a big part of the continued increase in health care costs as the rates of diabetes and heart disease increase, which are directly related to the obesity issue.

But is this law a realistic solution? Probably not. But it wasn't the local government that created the law, it was the voters.

Now as it relates to Safeway. Was this an accident? Probably not. The tax was added at the supplier level and there was no particular reason for Safeway to add those tags except to make a political point. As more than 3,000 items were involved it's not realistic that the store employees should be responsible for implementation. First, Safeway would never allocate the labor hours to make it happen. Secondly the employees don't have the knowledge to determine every item that is covered by the tax.

Safeway should have just paid their invoices and adjusted prices based on competition like they do in every other regulated category. But they wanted to make a point, and they did.

[pseudo3d]

There are so many issues here.

At the root of it is obesity in the U.S.A. which has reached epidemic levels. That has been a big part of the continued increase in health care costs as the rates of diabetes and heart disease increase, which are directly related to the obesity issue.

But is this law a realistic solution? Probably not. But it wasn't the local government that created the law, it was the voters.

Now as it relates to Safeway. Was this an accident? Probably not. The tax was added at the supplier level and there was no particular reason for Safeway to add those tags except to make a political point. As more than 3,000 items were involved it's not realistic that the store employees should be responsible for implementation. First, Safeway would never allocate the labor hours to make it happen. Secondly the employees don't have the knowledge to determine every item that is covered by the tax.

Safeway should have just paid their invoices and adjusted prices based on competition like they do in every other regulated category. But they wanted to make a point, and they did.

I don't think Safeway would try to make a political point on what is a fairly liberal idea (sugary drink taxes) considering Safeway has been a proponent of plastic bag taxes/bans (and of course, major offices are still in NORTHERN CALIFORNIA). I'm guessing that at the supplier level, somebody rubber-stamped a vast majority of the drinks in the Denver division as being tagged for the sugar tax, and somebody's head will roll for that.

"Never attribute to malice that which is adequately explained by stupidity," would fit very well here.

[klkla]

Safeway was not a proponent of bag fees until they realized they could use the issue as a scapegoat to cut costs and pass the cost of bags to consumers.

If you read the article you will see that both Safeway and Kroger are trying to score political points against this sugar tax but in different ways.

Safeway was sloppy in their response and they go
t called out on it.

[BillyGr]

Not so surprising that it could get confusing for companies that have business around the country, since it seems that these rules are being designed differently in each place they are created.

Some, for instance, included all sodas (even diet ones without any sugar) while this looks to leave those out (with the 5g sugar per 12 oz. requirement in it).

[pseudo3d]

Safeway was not a proponent of bag fees until they realized they could use the issue as a scapegoat to cut costs and pass the cost of bags to consumers.

If you read the article you will see that both Safeway and Kroger are trying to score political points against this sugar tax but in different ways.

Safeway was sloppy in their response and they go
t called out on it.

I did read the article before it broke on RetailWatchers.

King Soopers was mentioned and they're doing a better job with it because Kroger tends to be the better managed company. Safeway is riddled with incompetence in middle management, anyone can tell you that, and Denver especially (it's one of the "original" Safeway divisions and suffered major closures after the Albertsons takeover).

[storewanderer]

There are so many issues here.

At the root of it is obesity in the U.S.A. which has reached epidemic levels. That has been a big part of the continued increase in health care costs as the rates of diabetes and heart disease increase, which are directly related to the obesity issue.

But is this law a realistic solution? Probably not. But it wasn't the local government that created the law, it was the voters.

Now as it relates to Safeway. Was this an accident? Probably not. The tax was added at the supplier level and there was no particular reason for Safeway to add those tags except to make a political point. As more than 3,000 items were involved it's not realistic that the store employees should be responsible for implementation. First, Safeway would never allocate the labor hours to make it happen. Secondly the employees don't have the knowledge to determine every item that is covered by the tax.

Safeway should have just paid their invoices and adjusted prices based on competition like they do in every other regulated category. But they wanted to make a point, and they did.

I was thinking more along the lines of store employees noticing the problem. Without being at the store, I have no clue what items got price increased incorrectly. For instance let's look at Honest Tea which I believe has some items that would be covered by this rule and some that would not be covered by it. You would think store employees may notice the price rising for the fully sugared version vs. the "tad of sugar" version and someone would say something. Or if it was an even more blatant error, like increasing the price for seltzer water or unsweetened iced tea... just would think someone would speak up. Then again speaking up in the Safeway culture is a taboo so maybe that is why nobody spoke up.

Given the voters approved this (I simply cannot believe some of the things that get approved by voters), it would seem trying to make a political point to what the majority of your return customers voted in favor of is pretty dumb. I understand communicating why a price increases, but I would just show it real simply:

12 pack COLA base price 5.99
Add retailer elected pass through of City tax? on sugar beverage = surcharge of 2.88
12 pack COLA price 8.87 (plus tax)

And watch shrink numbers rise for these items...

I do think we are making strides in decreasing consumption of sugary beverages by limiting their availability in school, but it takes time for a new generation of consumers to grow up who isn't used to steadily drinking soda. The increased availability of unsweetened beverages in the past 5 years has been very noticeable and I expect that trend to continue but unfortunately it does not happen overnight. And to the many middle aged people who drink 3-4 cans of sugar soda a day I am afraid the habit is formed and damage seems to be in progress... will this sort of tax change their habits? I doubt it. People will just buy out of town and the people who pushed this "sugar soda tax" will claim victory because soda sales in town fell. But it is no victory at all because soda sales in surrounding towns will rise, and soda sales nationally are falling since the new generation of young consumers drink less soda because it was not so readily available to them.

[klkla]

And to the many middle aged people who drink 3-4 cans of sugar soda a day I am afraid the habit is formed and damage seems to be in progress... will this sort of tax change their habits? I doubt it.

Good question. We do have one comparison, though. And that is cigarettes. The government has taxed them to the point where consumption is just a fraction of what it was when they started that strategy.

[storewanderer]

It has taken a long time to get cigarette consumption to fall. I believe there are other factors that have also caused this, such as banning it in most public places, teaching young people of the health risks (not serving sugary drinks in schools reminds me of this), etc.