High gas prices are a hot-button item for most Americans, as politicians and car dealers know fully well. Schenectady-based Price Chopper Supermarkets knows it, too, having launched a discount gas promotion for loyal customers three years ago that now is being cut back so the company can stay competitive in a heated-up grocery war.
Not surprisingly, consumers reacted angrily to last week’s news that instead of having to buy only $50 worth of groceries to save 10 cents per gallon, they’ll have to buy $100 worth. But they react with anger whenever they drive by their neighborhood gas station and notice that prices have inched up. Some even plunk down tens of thousands of dollars on a new car just to feel good about saving $5 or $10 every fill-up.
It’s hard to blame Price Chopper (except insofar as its promotion is why it’s now in hot water). It says it spent more than $250 million on the promotion since 2009 but now wants to shift its focus back to more competitive grocery pricing. That’s what customers really want, the company says, and soon that’s what they’re going to get. (We’ll see.)
Actually, many customers really want both low gas prices and cheap groceries. Some — like politicians who pretend they can provide gold-plated services without taxes — think it’s perfectly reasonable to expect both. (They’re the ones now threatening to take their business to Chopper’s competitors.)
But the truth is, there’s no free lunch (or gas). A company that spends $250 million on a promotion like this isn’t getting the money for it out of thin air. Where a government can always borrow (as the federal government has repeatedly), a company either has to raise prices, lay off workers or pay them less, cut stockholder dividends — or live with a lower bottom line.
In days of yore, soap companies gave away glasses or dishes; grocers used S&H Green Stamps; gas stations even gave away cash with scratch-off-style lottery tickets. Retail gimmicks continue to come and go, satisfying customers who think they’re getting something for nothing, and frustrating those who know better.