Shop-Rite Supermarket will close a location this week. The store, in a West Philadelphia ghetto, will leave area residents in a food-desert created by Democrat city leaders and the soda tax they hit the city with.
They must have thought, “We’ll get more money to spend while looking like champions of the public health!” “They,” of course, are the politicians who voted for Philly’s soda tax. It’s an extra 1.5 cent per ounce on all sodas – even of the diet variety. In spite of first selling the measure as anti-sugar, it seems there was too much money on the table for them to exempt sugarless drinks.
A Coke and a Smile
It doesn’t take a retail economist to understand that a product that sells for a dollar or two (2-liter soda) cannot bear a tax levied of between 50% and 100% of its sale price. Anyone who can will simply buy the product outside the city limits, where there’s zero extra charge. A Shop-Rite 4.5 miles away from the closing location, outside the Philadelphia city limits and the grips of its craven politicians, is running the following sale on Sunday - (5) 2 liter Coke products for $5.97. That same purchase inside the city adds at least $5.07 in taxes!
What happened was what everyone knew would. The only people paying this tax are those who are too rich to care about the additional burdens to their grocery bill and those who cannot avoid it — those without cars, or the ability to fend off City Council’s hand in their pocket. Not enough people to keep this market open, however. The owners placed the blame on “Jim Kenney’s beverage tax” for the 23% loss in sales that has made the store unprofitable. Philadelphia Mayor Kenney led his fellow Democrats to pass the tax in a 13-4 vote. The measure was opposed by all three Republicans on the council.
Unintended Taxequences
The mayor’s office released a statement citing two ongoing ivy league studies that show beverage taxes do not affect sales. He did not offer a word on where the over 100 employees can now find gainful employment, or where those without cars will find regular, easy access to groceries priced competitively. Those people will now have to hike over a mile to get to a supermarket. And then there’s the building itself – what will the neighborhood look like when its shuttered? It’s not like high-end condos are going in.
...politicians who refuse to let the market do what it can so beautifully..
In their 2009 report to Congress, titled “Access to Affordable and Nutritious Food: Measuring and Understanding Food Deserts and Their Consequences,” the United States Department of Agriculture’s Economic Research Service called distances of a mile or more too great to expect people to walk for access to high-quality food. This meets the urban food desert criteria and is brought to you, like almost all food shortages, by politicians who refuse to let the market do what it can so beautifully: meet the needs of the people.
Here’s a point that can make you laugh or cry. One of the studies USDA relied on for its larger analysis uses the following list to determine if a store is desirable:
Classified stores as desirable if they had at least one item of
the following five and undesirable if it had none of the items:
(1) Diet soda (1-L or 2-L size)
(2) 1% fat or fat-free milk (1-quart, half-gallon, or 1-gallon size)
(3) High-fiber bread, low-carbohydrate bread, or both high-fiber
and low-carbohydrate bread (defined as 2 g or more fiber, 10 g
or less carbohydrate per slice, or both)
(4) Fresh fruits
(5) Fresh green vegetables or tomatoes.
A thriving supermarket can be the heart of a neighborhood. Where young people with zero experience get their first job. The elderly too. Not to mention the feeding of families and selling of groceries at the largest discount possible for the average shopper. No matter to Mayor Kenney and his merry band. If you want to make an omelet …
