[Some anonymous poster asked me to crosspost this musing here. I don’t know grocery store economics, but if someone does, explain where I’m wrong, please.]
I was at Food 4 Less (or was it El Super), watching people bag their own groceries. What would it cost if someone was there to bag them, I wondered?
Let’s say it takes 5 minutes to bag a cart of groceries. So a worker can do 12 in an hour. They do this for, let’s say, 7 hours a day. There’s a half hour of breaks, and a lunch break, and meetings, so that’s why I say 7 hours.
Let’s suppose this bagger makes $12 an hour, which no bagger makes, but, let’s suppose. There’s taxes and other expenses like insurance, so, let’s say that they add 50% to the cost of hiring this person – $18 an hour, or $144 a day. That wage, spread over a day’s worth of groceries, is only $1.71 per cart.
Anyone who shops at bag-it-yourself supermarkets knows that they are a lot cheaper than the ones where they bag it for you. Everything is cheaper, and in my experience, you can save a lot of money. Certainly more than $1.71 per trip.
So, why don’t they just increase prices by 1% and hire a bunch of baggers? They would create some entry level jobs.
I suspect that it’s because the owners want to create a distinction between stores. You have Food 4 Less, and you have Ralphs, both owned by Kroger. Food 4 Less costs a lot less than Ralphs. The main differences between the two is the bagging thing, slightly more “gourmet” inventory, and “atmoshpere”.
“Self-bagging” has become a symbol of poverty, or at least of thriftiness. Conversely, not self-bagging. having a kid or the cashier bag them, has become a status symbol. By perpetuating this division, Kroger can increase profits at Ralphs.
There’s also the whole paper, plastic, or canvas issue. I know it’s not green, but I get plastic, because that’s all they offer at the self-bagging. I use the bag instead of plastic wrap when storing food.
Unemployment is high, especially in working class communities. What Kroger and other grocery companies with self-bagging stores, like Albertson’s Max Foods (and a Luckys in Alhambra), should do is add bagger jobs, and keep their prices low. Prices need increase only 1% to 2%, if they create $24,000 per year jobs with full benefits, and have the baggers do 12 carts an hour. The profit margins are there, so, the money’s there to make the job.
Realistically, they should be able to do this without raising prices at all, by paying minimum wages and full benefits, and making them do more carts per hour. That’s usually how they do it, because bagger jobs are the low-paid positions.