> Carly wrote: > >> >> Individuals that live in what some classify as a "poor neighborhood" >> ultimetely end up paying more for goods and services than someone in a >> "richer neighborhood." >> >> If you were to compare prices in an inner city Cub Food store verses >> one in the suburbs, you would find the inner city store has higher >> prices. >> I wonder if this an empirical fact or a perception?
If there are facts to support it, I would expect the the level and type of competition in each trade area provides the greatest explanation. Assuming that price is a function of supply and demand, it's likely that the "poor neighborhood" Cub store is primarily competing against independent grocers who, due to their ownership and operational structure are not as price, product or service competitive. Perhaps the Cub store is finding the cost of operations in the "poor neighborhood" to be substantially higher than in the "richer neighborhood". For example, they might find it more difficult to attract and or retain labor. Or they cannot economically justify operating 24 hours so their operational cost structure is more expensive. Or the store is smaller and cannot yield the same returns as the larger store. Or the cost of land is greater per square foot, driving up operational costs. There's a lot of potential reasons. All I know is that grocers once they have a store to operate on a site will do everything they can to make that store economically viable. And a format, such as Cub, that is positioned to be the price leader, will do everything possible to retain that position. They have too much at stake to risk price gouging from a single store, regardless of whether it's a "rich" or "poor" neighborhood. Steve Kotvis Kenwood REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
