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Data point: I once worked on software for very large retail chains which allows those retailers to group stores by "zones" for pricing purposes. One of the comm

Data point: I once worked on software for very large retail chains which allows those retailers to group stores by "zones" for pricing purposes. One of the commonly defined pricing zones is "inner-city", which consistently get their prices bumped by, say, 5 or 10% for many items. The reasoning behind this was exactly as laid out in the article: inner-city residents lack transportation options, and so retailers can command higher prices.

jamiequint 17y ago
I forgot what article I read it in, but there was something a while back about this. It justified the higher costs by describing the extra costs of the stores in these areas. Apparently, many of these stores have higher theft rates and need for security, which drives up prices.
- bokonist 17y ago
  Here is a great blog post describing the crime problems of an inner city grocery market: http://www.detroitblog.org/?p=604 http://www.detroitblog.org/?p=604 From the post: A day in the life of Tom Boy Super Market consists partly of stopping people from robbing the place blind. "There’s so many days when I don’t do nothing," Jitu says. "My main job is to run the office and I don’t have to be here, but I have to come anyway. You don't want to have, like, one person here, and then half the store is gone. We have to have so many people. They don’t have to do nothing, but they have to be here."
  - wallflower 17y ago
    "Most grocery stores have a razor thin profit margin on the merchandise they sell therefore it is imperative for shrinkage to be kept to a minimum. For example with a profit margin of 5% a store must sell 500 dollars in merchandise just to cover the cost of a 25.00 dollar item. In one year a store with merely twenty five dollars of losses a day must increase sales by 175,000 dollars to break even. Keep in mind that for many supermarkets 5% profit margin is high" http://www.evancarmichael.com/Retail/3869/Grocery-industry-at-high-risk-of-theft.html http://www.evancarmichael.com/Retail/3869/Grocery-industry-a...
mattmaroon 17y ago
Right, the article should have been about it being expensive to be the urban poor. Suburban poor have it much better. They largely have cars, because people in a city pay more to park a car for three months than people in the suburbs pay to buy a car. They shop at and work Wal-Mart rather than 7-11, and Wal-Mart costs less and pays more. Etc. The moral is, if you're poor, get the hell out of the city.
- bokonist 17y ago
  The urban poor usually have much better bus access and walking access to jobs. That saves a lot of money. The cost of housing is also super cheap. And many inner cities do have inexpensive super markets, cheap ethnic grocers, and dollar discount stores for household goods. I'd need to see some actual stats on the price of milk or eggs by neighborhood. I'm not sure inner cities are really that much more expensive.
  - joetrumpet 17y ago
    The poor city I'm adjacent to, Trenton, has no supermarket. People simply have to shop at the convenience stores, which are more expensive anywhere. I'm not aware of anything you mentioned inside the city--just in the suburbs surrounding it. Housing is not super cheap: 800-1200 a month rent is typical for a far-from-glamorous home, maybe 700 if you're willing to live in the high-crime areas. Most people with kids would do anything to stay out of those parts. That doesn't leave a lot for food, utilities, child care, transportation, and misc. costs. I'm not really sure what city you're considering. It's far from the reality I've seen.
    - bokonist 17y ago
      What do you mean Trenton has no super markets? A quick google maps search shows over a dozen super markets and grocery stores. The rent you cite is less expensive than the suburbs. The cities I know best are Philly, DC, and New Haven. In each of these cities, the poor, inner city areas have lower housing prices than the surrounding suburbs, and they have available super markets.

jamiequint 17y ago

I forgot what article I read it in, but there was something a while back about this. It justified the higher costs by describing the extra costs of the stores in these areas. Apparently, many of these stores have higher theft rates and need for security, which drives up prices.

bokonist 17y ago
Here is a great blog post describing the crime problems of an inner city grocery market: http://www.detroitblog.org/?p=604 http://www.detroitblog.org/?p=604 From the post: A day in the life of Tom Boy Super Market consists partly of stopping people from robbing the place blind. "There’s so many days when I don’t do nothing," Jitu says. "My main job is to run the office and I don’t have to be here, but I have to come anyway. You don't want to have, like, one person here, and then half the store is gone. We have to have so many people. They don’t have to do nothing, but they have to be here."
- wallflower 17y ago
  "Most grocery stores have a razor thin profit margin on the merchandise they sell therefore it is imperative for shrinkage to be kept to a minimum. For example with a profit margin of 5% a store must sell 500 dollars in merchandise just to cover the cost of a 25.00 dollar item. In one year a store with merely twenty five dollars of losses a day must increase sales by 175,000 dollars to break even. Keep in mind that for many supermarkets 5% profit margin is high" http://www.evancarmichael.com/Retail/3869/Grocery-industry-at-high-risk-of-theft.html http://www.evancarmichael.com/Retail/3869/Grocery-industry-a...

mattmaroon 17y ago

Right, the article should have been about it being expensive to be the urban poor. Suburban poor have it much better. They largely have cars, because people in a city pay more to park a car for three months than people in the suburbs pay to buy a car. They shop at and work Wal-Mart rather than 7-11, and Wal-Mart costs less and pays more. Etc. The moral is, if you're poor, get the hell out of the city.

bokonist 17y ago
The urban poor usually have much better bus access and walking access to jobs. That saves a lot of money. The cost of housing is also super cheap. And many inner cities do have inexpensive super markets, cheap ethnic grocers, and dollar discount stores for household goods. I'd need to see some actual stats on the price of milk or eggs by neighborhood. I'm not sure inner cities are really that much more expensive.
- joetrumpet 17y ago
  The poor city I'm adjacent to, Trenton, has no supermarket. People simply have to shop at the convenience stores, which are more expensive anywhere. I'm not aware of anything you mentioned inside the city--just in the suburbs surrounding it. Housing is not super cheap: 800-1200 a month rent is typical for a far-from-glamorous home, maybe 700 if you're willing to live in the high-crime areas. Most people with kids would do anything to stay out of those parts. That doesn't leave a lot for food, utilities, child care, transportation, and misc. costs. I'm not really sure what city you're considering. It's far from the reality I've seen.
  - bokonist 17y ago
    What do you mean Trenton has no super markets? A quick google maps search shows over a dozen super markets and grocery stores. The rent you cite is less expensive than the suburbs. The cities I know best are Philly, DC, and New Haven. In each of these cities, the poor, inner city areas have lower housing prices than the surrounding suburbs, and they have available super markets.