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NEWS
[ Wednesday, Jan. 29, 1992 ]

Convenience charges more
Good location, higher prices characterize downtown stores

Collegian Features Writer

The "convenience" in convenience stores frequently indicates more than just a good location -- it also signals higher prices.

A comparison of 10 grocery items at five local stores reveal that stores further from downtown State College generally have lower prices.

"As a consumer you're paying for a certain amount of convenience," said Paul Anderson, professor of marketing.

Profit for nationwide grocery stores comes from about 1 percent of total sales, so these stores rely on volume to make money, Anderson said. But smaller stores have to make a comparable margin of profit from a smaller inventory, which results in higher prices, he added.

The biggest reason prices downtown tend to be higher is because rent is so expensive, said Ray Agostinelli, general manager of McLanahan's Self Service Store, 414 E. College Ave. McLanahan's probably pays three times the amount per square foot than a store farther away pays for rent, he added. People often blame high prices solely on the store, but added that other factors carry influence as well, he said.

"It's convenient to everyone -- the landlord knows that too," Agostinelli said.

Joe Williams, store manager of Big Top Market, 138 E. Beaver Ave., agreed that rent is a big problem for stores with key locations.

Smaller stores also don't have the buying power that bigger ones do, Williams said.

Bi-Lo may be able to buy a truckload of produce from California, but McLanahan's doesn't and can't buy that kind of bulk, Agostinelli said. McLanahan's buys a lot of its produce from local merchants, he added.

Off-campus dweller Michael Barrett (junior-marketing) said he shops at Bi-Lo because it is newer and has a better selection and prices. However, Barrett said he occasionally buys things from Uni-Mart, because one is located in his apartment building.

But downtown stores take advantage of students, Barrett said.

"They know they have the students in a spot where they can charge a little higher," he said.

Among downtown stores, Big Top's prices are relatively lower because it is an affiliate of Weis Market.

The store changed names last semester, because it does not have the electronic cash register scanners of newer Weis stores which enable them to ring up pre-programmed specials, Williams said. Because the Beaver Avenue store was not compatible with adding scanners, the management changed the name so the store is not responsible for specials, he added.

Richard Pasewark, director of advertising for Giant Foods, said his corporation charges the same at all their stores, regardless of location. The Giants in Harrisburg are priced the same as those in State College, he added.

Anderson cautioned that people willing to forgo the supermarket for a walk down the street will pay for it.

Jennifer Coleman (junior-English) lives in South Halls and shops at McLanahan's because she only buys a few items like milk and juice, she said. Because she doesn't have a car and eats in the dining halls, Coleman said prices are not a big concern.

Cost isn't always determined by prices, Anderson said. Ultimately what people will pay sets the cost, and if a store has a good location and willing consumers there's no reason to lower prices, Anderson said.

Representatives from Bi-Lo and Uni-Mart could not be reached for comment.

 

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