Ten Things Your Supermarket Doesn't Want You To Know
This is the text of an article written by Anne Kadet which can also be found here at SmartMoney's web site. It was written with an American readership in mind and and consequently there are aspects of law and practice that are inapplicable in a UK or European context. I haven't cleaned up the American Spelling yet, but will get around to that. Furthermore the article first appeared in 2001 and the passage of time may have resulted in a limited amount of redundancy. Nevertheless, read on:
1. "We trick you into paying higher prices."
Most of us have spent enough time in supermarkets to think we know how to save a few bucks: Buy in bulk whenever possible and buy brands that are on special. Too bad the supermarket chains have quietly changed the rules.
Bulk buying, it turns out, is often more expensive, simply because in the early 1990s supermarket chains figured out that consumers lean toward it, and they've jacked up prices accordingly. "Supermarkets know that consumers believe a two-pound package is cheaper, ounce per ounce, than a one-pound package," says Arun K. Jain, a marketing professor at the State University of New York at Buffalo. "
But the reality is, you're often better off buying two one-pound packages." He estimates that almost all supermarkets engage in this practice. We found proof at a store near the SmartMoney offices, where a 12-ounce bottle of Aunt Jemima syrup cost $2.09, while a 24-ounce bottle was $4.65; a quart of Lactaid milk was selling for $1.79, while a half-gallon was $3.85.
2. "Our 'specials' are anything but."
Do you tend to pick up a supermarket circular when you walk into your store, hoping to cash in on the weekly sales? They can be a bad deal. "Shoppers don't bother to compare the price when they have a coupon," says Jain. "So supermarkets use them to unload products that are more expensive than other brands."
Some supermarkets even raise the retail prices on items during weeks in which store coupons will be appearing in newspapers and circulars. "The regular retail prices fluctuate, making the discount seem larger for some sales," says one ad-department employee at a large supermarket chain.
Also, beware of the false in-store "sale environments," complete with a separate cardboard display and handwritten signs displaying the price. "People think it must be a special deal," says Jack Taylor, a professor of retailing at Birmingham-Southern College in Birmingham, Ala. "But in reality, it's the same price as always."
3. "Everybody pays a price for our 'loyalty' program."
More than 50 million Americans use supermarket loyalty cards that entitle them to special in-store discounts. Who foots the bill? Those customers who refuse to join. "The whole point is to give the best shoppers something special, and you have to pay for that out of something," says David Diamond, president of emerging business for Catalina Marketing, the St. Petersburg, Fla., company that handles many supermarket card programs. "It used to be that everybody got Rice Krispies for, say, 79 cents. Now they're available to anyone for 89 cents, but the best shoppers get them for 49 cents."
And if you do join, you'll pay in another way — with your privacy. Diamond says his company sells to manufacturers only data that don't identify individual consumers. But under special circumstances, your shopping history may be used against you.
Consider the case of Robert Rivera, a 62-year-old retired tow-truck operator in Los Angeles who in 1995 slipped on a carton of spilled yogurt in his local supermarket, shattered his kneecap and filed a lawsuit against the store (later dismissed by the judge for lack of evidence). During a discovery session, Rivera claims, a lawyer for the store threatened to air his buying habits. "He said they had information that I buy a lot of alcohol," says Rivera. "I shop at lots of different stores in the chain. There's no way they could have known that unless they used my club card information."
"They know if you drink, have hemorrhoids or practice safe sex," says Los Angeles consumer advocate Tim Duffy. "I tell people, unless you're using the card to cash checks, give them a fake name." Luckily, your supermarket will usually play along. Safeway, for example, allows members to sign up merely as "Safeway Customer."
4. "Our stores might make you sick..."
You'd be horrified to find roaches, rats or other critters in your kitchen, but those same creatures may be running amok in your grocery store. A 2000 New York State Department of Agriculture and Markets report, for example, found rodents, birds or bugs in the aisles of almost 15% of supermarkets. At an Albany, N.Y., Sam's Club, an inspection turned up rodent-gnawed chocolate bars, 500 samples of mice droppings and six dead mice in aisle 13. (A Sam's Club spokesman says the store has "taken extensive steps to correct the problem.")
And while the bugs and rodents present an obvious health hazard (flies can carry E. coli on their legs and bodies), the pesticides that stores employ in defense can be worse. "We've seen people go in and spray pesticides [and] actually contaminate the food," says Joe Corby, director of the Food Safety and Inspection Division of New York's Department of Agriculture and Markets.
How can you tell if your seemingly bugless supermarket is really safe?
Good supermarkets employ a food safety manager to ensure the foundation entrances are sealed and food shipments are inspected before they hit the shelves — the best ways to prevent vermin from getting in. One red flag: old, faded stock. A failure to rotate products properly gives insect eggs that have snuck in with grain products time to hatch and create an infestation.
5. "...and if they don't, our employees will."
Six-legged creatures aren't the only cause of harmful bacteria at your supermarket. "Employee practices are probably the No. 1 cause of cross-contamination," says Joseph Reardon, a food compliance supervisor with the North Carolina Department of Agriculture and Consumer Services.
The problem, in part, is the nature of the workforce, which is typically unskilled. But management also shoulders plenty of blame. "The hours budgeted for cleaning are constantly under barrage by management, and it's hurt food safety," says Carl Lafrate, president of ProCheck Food Safety Consultants, a Baldwinsville, N.Y.-based firm that designs food safety programs for grocery chains. Five years ago, "meat departments were cleaned every four hours, but now they've cut that out." Indeed, in a recently published survey of U.S. supermarkets, the FDA found that more than half of deli workers didn't properly wash their hands and that 45% of meat department employees failed to keep surfaces sanitized.
To find out how your store scores, request a copy of its most recent inspection report. In most jurisdictions, inspections are handled by the department of health, consumer affairs or agriculture.
6. "Federal guidelines? Who cares?"
While the FDA regularly issues a food code to suggest good safety practices, it's merely a recommendation — the federal government has no role in supermarket inspection. Not surprisingly, few of the 3,000 regional inspection authorities update their local regulations to match the current food code. The result? Utter inconsistency.
The food code, for instance, recommends that cold foods be kept at 41 degrees or lower, but most states set it at 45. The code also recommends that stores be given a maximum of 10 days to correct health violations; Vermont gives stores a month to comply.
"Some localities are still using the 1976 code," says Charlotte Christin, a food safety attorney for the Washington, D.C.-based nonprofit Center for Science in the Public Interest.
"There are pathogens that injure people every year that no one even knew about [in 1976], such as a deadly strain of E. coli."
Even if the local laws reflect high standards, they're not always enforced.
"Most states require annual inspections, but that's often not taken seriously," says Lafrate. "In a lot of states, inspections are generated only on a consumer complaint basis" — a good excuse to complain if your store looks subpar.
7. "'Fresh' is a relative term."
What do some supermarkets do if the steaks don't sell fast enough and start to look a little grungy? Grind it up into hamburger meat. If the chicken is past its "sell by" date? Slap a new label on it.
Surprise! Except for regulations about baby food and infant formula, there are no federal laws mandating product dating. In most states a retailer may legally sell foods beyond the date on the package as long as the product can be considered unspoiled and safe to eat. Even repackaging is legal.
The FDA does requires that if dates are provided, they be accompanied by an explanatory phrase, but those phrases won't reveal much about the true state of the kielbasa in your cart: A "sell by" date simply tells the store how long to display the product, while a "best if used by" date can suggest when the product will lose its peak flavor or quality. Only an expiration date can be used by the supermarket as an indicator of whether food is still safe to eat. Not that you're likely to find one. In the majority of states, no type of freshness dating on food is required at all.
8. "We like to play head games."
Shoppers who stick to a prepared shopping list are few and far between — and they're also the supermarket's worst enemy.
How do supermarkets capitalize on your tendency to stray? They play soft music in the aisles, inducing you to relax and spend, says Richard Rauch, a professor of marketing at Long Island University who consults for supermarket chains. Some stores, he adds, even use special mood-enhancing lighting that filters out higher frequencies in the visible light spectrum. It produces only relaxing colors such as blues and purples, which reduce the rate at which your eyes blink.
"It slows your pace and gets your mind to slow down," says Rauch. "Using lighting to create an atmosphere is not an unusual tactic. Most of the larger, more sophisticated stores use it."
That bakery smells good, doesn't it?
There's a reason those ovens are always on full blast. "Studies show the smell of baking bread drives people bonkers," says Jain. The scent drives up sales all over the store. "We haven't encountered these things," says Todd Hultquist, a spokesman for the Food Marketing Institute, a retail association. "Retailers want to offer the best value, quality and selection. That's what drives sales."
9. "Our product offerings are rigged."
So your local supermarket stopped carrying your favorite brand of potato chips? Don't assume it was discontinued. More likely, the manufacturer refused to fork over its "slotting fee" — a payment to the supermarket in return for shelf space.
Many manufacturers gladly pay such fees to score shelf space at eye level, where the products are most likely to attract attention. But other kinds of slotting fees stifle competition, hurt consumers and hold smaller manufacturers over a barrel.
Among the worst: "pay to stay" fees — regular payments the manufacturer makes if it wants to sell its goods in the store. According to Rauch, supermarkets make more than half their profits on such fees. It's an issue that many small manufacturers quietly accept for fear of angering the powerful supermarket chains.
At a 1999 Senate Small Business Committee hearing on the issue, some small manufacturers testified with hoods and voice scramblers to conceal their identity.
Slotting-fee profits are passed to consumers as lower prices, insists Hultquist. But Nicholas Pyle, vice president of the Independent Bakers Association, says those fees force bakeries to increase wholesale prices, which cancels out in-store savings. "Otherwise," he says, "they couldn't survive."
10. "Our scanners are a scam."
While supermarkets were among the first stores to adopt scanners, many stores still can't use them right. A 1998 FTC study of supermarket scanner systems found that roughly a fourth failed to earn a passing grade, and a few chains overcharged customers on more than one out of 12 items.
The most common errors are made on sale items, says Jerry Butler, a field supervisor with the North Carolina Department of Agriculture's Standards Division. Usually, store management just neglects to enter the sale price into the scanner system.
Tim Duffy says that jotting down prices and watching the register can pay off more than you think. Over the course of one year, he patronized California supermarkets that give customers an item for free if the scanner rings up the wrong price. By year's end, he says, he took home more than $4,000 in free food, which he donated to charity.
1. "We trick you into paying higher prices."
Most of us have spent enough time in supermarkets to think we know how to save a few bucks: Buy in bulk whenever possible and buy brands that are on special. Too bad the supermarket chains have quietly changed the rules.
Bulk buying, it turns out, is often more expensive, simply because in the early 1990s supermarket chains figured out that consumers lean toward it, and they've jacked up prices accordingly. "Supermarkets know that consumers believe a two-pound package is cheaper, ounce per ounce, than a one-pound package," says Arun K. Jain, a marketing professor at the State University of New York at Buffalo. "
But the reality is, you're often better off buying two one-pound packages." He estimates that almost all supermarkets engage in this practice. We found proof at a store near the SmartMoney offices, where a 12-ounce bottle of Aunt Jemima syrup cost $2.09, while a 24-ounce bottle was $4.65; a quart of Lactaid milk was selling for $1.79, while a half-gallon was $3.85.
2. "Our 'specials' are anything but."
Do you tend to pick up a supermarket circular when you walk into your store, hoping to cash in on the weekly sales? They can be a bad deal. "Shoppers don't bother to compare the price when they have a coupon," says Jain. "So supermarkets use them to unload products that are more expensive than other brands."
Some supermarkets even raise the retail prices on items during weeks in which store coupons will be appearing in newspapers and circulars. "The regular retail prices fluctuate, making the discount seem larger for some sales," says one ad-department employee at a large supermarket chain.
Also, beware of the false in-store "sale environments," complete with a separate cardboard display and handwritten signs displaying the price. "People think it must be a special deal," says Jack Taylor, a professor of retailing at Birmingham-Southern College in Birmingham, Ala. "But in reality, it's the same price as always."
3. "Everybody pays a price for our 'loyalty' program."
More than 50 million Americans use supermarket loyalty cards that entitle them to special in-store discounts. Who foots the bill? Those customers who refuse to join. "The whole point is to give the best shoppers something special, and you have to pay for that out of something," says David Diamond, president of emerging business for Catalina Marketing, the St. Petersburg, Fla., company that handles many supermarket card programs. "It used to be that everybody got Rice Krispies for, say, 79 cents. Now they're available to anyone for 89 cents, but the best shoppers get them for 49 cents."
And if you do join, you'll pay in another way — with your privacy. Diamond says his company sells to manufacturers only data that don't identify individual consumers. But under special circumstances, your shopping history may be used against you.
Consider the case of Robert Rivera, a 62-year-old retired tow-truck operator in Los Angeles who in 1995 slipped on a carton of spilled yogurt in his local supermarket, shattered his kneecap and filed a lawsuit against the store (later dismissed by the judge for lack of evidence). During a discovery session, Rivera claims, a lawyer for the store threatened to air his buying habits. "He said they had information that I buy a lot of alcohol," says Rivera. "I shop at lots of different stores in the chain. There's no way they could have known that unless they used my club card information."
"They know if you drink, have hemorrhoids or practice safe sex," says Los Angeles consumer advocate Tim Duffy. "I tell people, unless you're using the card to cash checks, give them a fake name." Luckily, your supermarket will usually play along. Safeway, for example, allows members to sign up merely as "Safeway Customer."
4. "Our stores might make you sick..."
You'd be horrified to find roaches, rats or other critters in your kitchen, but those same creatures may be running amok in your grocery store. A 2000 New York State Department of Agriculture and Markets report, for example, found rodents, birds or bugs in the aisles of almost 15% of supermarkets. At an Albany, N.Y., Sam's Club, an inspection turned up rodent-gnawed chocolate bars, 500 samples of mice droppings and six dead mice in aisle 13. (A Sam's Club spokesman says the store has "taken extensive steps to correct the problem.")
And while the bugs and rodents present an obvious health hazard (flies can carry E. coli on their legs and bodies), the pesticides that stores employ in defense can be worse. "We've seen people go in and spray pesticides [and] actually contaminate the food," says Joe Corby, director of the Food Safety and Inspection Division of New York's Department of Agriculture and Markets.
How can you tell if your seemingly bugless supermarket is really safe?
Good supermarkets employ a food safety manager to ensure the foundation entrances are sealed and food shipments are inspected before they hit the shelves — the best ways to prevent vermin from getting in. One red flag: old, faded stock. A failure to rotate products properly gives insect eggs that have snuck in with grain products time to hatch and create an infestation.
5. "...and if they don't, our employees will."
Six-legged creatures aren't the only cause of harmful bacteria at your supermarket. "Employee practices are probably the No. 1 cause of cross-contamination," says Joseph Reardon, a food compliance supervisor with the North Carolina Department of Agriculture and Consumer Services.
The problem, in part, is the nature of the workforce, which is typically unskilled. But management also shoulders plenty of blame. "The hours budgeted for cleaning are constantly under barrage by management, and it's hurt food safety," says Carl Lafrate, president of ProCheck Food Safety Consultants, a Baldwinsville, N.Y.-based firm that designs food safety programs for grocery chains. Five years ago, "meat departments were cleaned every four hours, but now they've cut that out." Indeed, in a recently published survey of U.S. supermarkets, the FDA found that more than half of deli workers didn't properly wash their hands and that 45% of meat department employees failed to keep surfaces sanitized.
To find out how your store scores, request a copy of its most recent inspection report. In most jurisdictions, inspections are handled by the department of health, consumer affairs or agriculture.
6. "Federal guidelines? Who cares?"
While the FDA regularly issues a food code to suggest good safety practices, it's merely a recommendation — the federal government has no role in supermarket inspection. Not surprisingly, few of the 3,000 regional inspection authorities update their local regulations to match the current food code. The result? Utter inconsistency.
The food code, for instance, recommends that cold foods be kept at 41 degrees or lower, but most states set it at 45. The code also recommends that stores be given a maximum of 10 days to correct health violations; Vermont gives stores a month to comply.
"Some localities are still using the 1976 code," says Charlotte Christin, a food safety attorney for the Washington, D.C.-based nonprofit Center for Science in the Public Interest.
"There are pathogens that injure people every year that no one even knew about [in 1976], such as a deadly strain of E. coli."
Even if the local laws reflect high standards, they're not always enforced.
"Most states require annual inspections, but that's often not taken seriously," says Lafrate. "In a lot of states, inspections are generated only on a consumer complaint basis" — a good excuse to complain if your store looks subpar.
7. "'Fresh' is a relative term."
What do some supermarkets do if the steaks don't sell fast enough and start to look a little grungy? Grind it up into hamburger meat. If the chicken is past its "sell by" date? Slap a new label on it.
Surprise! Except for regulations about baby food and infant formula, there are no federal laws mandating product dating. In most states a retailer may legally sell foods beyond the date on the package as long as the product can be considered unspoiled and safe to eat. Even repackaging is legal.
The FDA does requires that if dates are provided, they be accompanied by an explanatory phrase, but those phrases won't reveal much about the true state of the kielbasa in your cart: A "sell by" date simply tells the store how long to display the product, while a "best if used by" date can suggest when the product will lose its peak flavor or quality. Only an expiration date can be used by the supermarket as an indicator of whether food is still safe to eat. Not that you're likely to find one. In the majority of states, no type of freshness dating on food is required at all.
8. "We like to play head games."
Shoppers who stick to a prepared shopping list are few and far between — and they're also the supermarket's worst enemy.
How do supermarkets capitalize on your tendency to stray? They play soft music in the aisles, inducing you to relax and spend, says Richard Rauch, a professor of marketing at Long Island University who consults for supermarket chains. Some stores, he adds, even use special mood-enhancing lighting that filters out higher frequencies in the visible light spectrum. It produces only relaxing colors such as blues and purples, which reduce the rate at which your eyes blink.
"It slows your pace and gets your mind to slow down," says Rauch. "Using lighting to create an atmosphere is not an unusual tactic. Most of the larger, more sophisticated stores use it."
That bakery smells good, doesn't it?
There's a reason those ovens are always on full blast. "Studies show the smell of baking bread drives people bonkers," says Jain. The scent drives up sales all over the store. "We haven't encountered these things," says Todd Hultquist, a spokesman for the Food Marketing Institute, a retail association. "Retailers want to offer the best value, quality and selection. That's what drives sales."
9. "Our product offerings are rigged."
So your local supermarket stopped carrying your favorite brand of potato chips? Don't assume it was discontinued. More likely, the manufacturer refused to fork over its "slotting fee" — a payment to the supermarket in return for shelf space.
Many manufacturers gladly pay such fees to score shelf space at eye level, where the products are most likely to attract attention. But other kinds of slotting fees stifle competition, hurt consumers and hold smaller manufacturers over a barrel.
Among the worst: "pay to stay" fees — regular payments the manufacturer makes if it wants to sell its goods in the store. According to Rauch, supermarkets make more than half their profits on such fees. It's an issue that many small manufacturers quietly accept for fear of angering the powerful supermarket chains.
At a 1999 Senate Small Business Committee hearing on the issue, some small manufacturers testified with hoods and voice scramblers to conceal their identity.
Slotting-fee profits are passed to consumers as lower prices, insists Hultquist. But Nicholas Pyle, vice president of the Independent Bakers Association, says those fees force bakeries to increase wholesale prices, which cancels out in-store savings. "Otherwise," he says, "they couldn't survive."
10. "Our scanners are a scam."
While supermarkets were among the first stores to adopt scanners, many stores still can't use them right. A 1998 FTC study of supermarket scanner systems found that roughly a fourth failed to earn a passing grade, and a few chains overcharged customers on more than one out of 12 items.
The most common errors are made on sale items, says Jerry Butler, a field supervisor with the North Carolina Department of Agriculture's Standards Division. Usually, store management just neglects to enter the sale price into the scanner system.
Tim Duffy says that jotting down prices and watching the register can pay off more than you think. Over the course of one year, he patronized California supermarkets that give customers an item for free if the scanner rings up the wrong price. By year's end, he says, he took home more than $4,000 in free food, which he donated to charity.
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