# Why are groceries in poor neighborhoods more expensive? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 9, 2013, 4:35pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784 "2013-10-09T16:35:30Z")\ **Posts on this page:** 10\ **Page:** 2
**Author:** ![Amateur\_Barbarian](https://avatars.discourse-cdn.com/v4/letter/a/59ef9b/32.png) [@Amateur\_Barbarian](https://boards.straightdope.com/u/Amateur_Barbarian)\ **Post date:** [October 10, 2013, 6:02pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/21 "2013-10-10T18:02:04Z")
> [@svd678](#): > > “well regulated capitalist system?” surely you jest. A hardware store owner once told me his wholesale purchase price was higher than the retail sale price in the big store. Non sequitur, unless your contention is that Joe’s Hardware being able to buy products by the case for the same price that Home Depot pays by the warehouse represents “good regulation.” Otherwise, it’s capitalism in action. The buyer that makes Black & Decker $100k profit in one transaction gets a better deal than the one that makes them $20. ---
**Author:** ![nearwildheaven](https://avatars.discourse-cdn.com/v4/letter/n/90db22/32.png) [@nearwildheaven](https://boards.straightdope.com/u/nearwildheaven)\ **Post date:** [October 10, 2013, 6:07pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/22 "2013-10-10T18:07:30Z")
> [@svd678](#): > > “well regulated capitalist system?” surely you jest. A hardware store owner once told me his wholesale purchase price was higher than the retail sale price in the big store. That’s one reason why independent yarn and craft stores don’t stock Red Heart. 😃 ---
**Author:** ![AtomicDog](https://avatars.discourse-cdn.com/v4/letter/a/ac91a4/32.png) [@AtomicDog](https://boards.straightdope.com/u/AtomicDog)\ **Post date:** [October 10, 2013, 9:11pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/23 "2013-10-10T21:11:33Z")
Sooo…why is gasoline more expensive in poorer neighborhoods? After all, a poor motorist can easily drive to where gas is cheaper. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [October 10, 2013, 9:13pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/24 "2013-10-10T21:13:49Z")
> [@Frylock](#): > > In my experience, grocery stores in poor neighborhoods have higher prices and lower quality. Why is this? Before we can theorize on what might cause this, we need to establish that it is true. “In my experience” isn’t sufficient. Got something more tangible? ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [October 10, 2013, 9:31pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/25 "2013-10-10T21:31:58Z")
> [@DMark](#): > > For that matter, go to any airport, get past the security check in, and then compare prices of the Burger King, Starbucks or any well-known fast food places to those same chains in your local neighborhood. They aren’t fools and know that have you by the balls with no other options. That’s what I was about to say. No dollar menu at an airport McDonalds, and everything’s marked up 1.5-2x what it normally would be. Same thing at sporting events and movie theaters if you think about it. Another thing to consider is that grocery stores aimed at poor people in mixed or at least not overwhelmingly poor areas DO tend to have lower prices. The Fiesta hispanic markets near me in Dallas are clearly targeted at low income hispanic immigrants, but they’re by no means the only grocery stores in the area. The prices are extremely low though. Clearly nobody’s trying to soak the poor out of spite in this situation. So I’d guess it’s some combination of charging what the market will bear (and the market will bear more if competition is low), and cost-increasing factors like theft, vandalism, high worker turnover, etc… that tend to happen in poor areas. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [October 11, 2013, 2:43am UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/26 "2013-10-11T02:43:14Z")
> [@svd678](#): > > “well regulated capitalist system?” surely you jest. A hardware store owner once told me his wholesale purchase price was higher than the retail sale price in the big store. Wait, you think we’re supposed to regulate economies of scale? And just anecdotally, I’ve found prices on a lot of stuff CHEAPER at local hardware stores. Certainly not everything, but stuff I expected to get hosed on were not just cheaper but substantially cheaper. I go to local hardware stores in the hopes they stay open because the big box stores generally aren’t helpful and I have to walk all over the store for hardware. Cost is not the only reason for shopping. Service comes at a price and usually it’s worth it to get help on a project. That applies to many types of stores. ---
**Author:** ![robert\_columbia](https://avatars.discourse-cdn.com/v4/letter/r/e79b87/32.png) [@robert\_columbia](https://boards.straightdope.com/u/robert_columbia)\ **Post date:** [October 11, 2013, 5:23pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/27 "2013-10-11T17:23:48Z")
> [@JerrySTL](#): > > Another thing to consider is that food is often highly subsidized in such neighborhoods with food stamps, WIC, and other programs. What this means is that there is a moral hazard in operation here. When one person has decision making power as to what to buy but another person is already obligated to pay for it, the person making the decision is less likely to care about getting the best price and merchants marketing to those people know it and can set their prices as high as the law will allow. WIC, I believe, was intended to be flexible for people in different areas and able to accommodate local food price conditions. E.g. that tropical fruit is going to be really expensive if you live in Alaska. Stores stretch this idea as far as they can - yeah, it’s that expensive, that’s what I charge, don’t like it, find another store, yeah. A similar thing happens with medical insurance - if you know you will be covered then you are more likely to seek tests and treatment that might otherwise not be considered “necessary”. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 11, 2013, 5:38pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/28 "2013-10-11T17:38:25Z")
You think people on food stamps don’t pay attention to what things cost? They’re not unlimited. ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [October 11, 2013, 5:47pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/29 "2013-10-11T17:47:14Z")
With population shifts from inner cities to the suburbs, there are bigger suburban stores that buy in greater bulk and can offer greater cost savings, compared to smaller outlets in the inner city (plus the aforementioned greater costs of security in higher crime areas). If one could demonstrate that equivalently-sized stores in poorer and more well-off neighborhoods that have equivalent costs of doing business disproportionately jack up prices in poorer areas, the argument that racism/exploitation is involved would carry more weight. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [October 11, 2013, 7:00pm UTC](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784/30 "2013-10-11T19:00:34Z")
> [@DMark](#): > > Competition, plus supply and demand. > > Yes, poor neighborhood grocery stores charge more, but then again, so does ANY grocery store that is the only one around for miles. > > Go to some resort area, or on an island, or some small town in the middle of nowhere, or anywhere that only has one place for miles to buy milk and bread and other basics, and I will show you a final tab that will make even Mitt Romney blush when having to pay it. > > For that matter, go to any airport, get past the security check in, and then compare prices of the Burger King, Starbucks or any well-known fast food places to those same chains in your local neighborhood. They aren’t fools and know that have you by the balls with no other options. The difference is the possibility of competition. I can’t go to the movie theatre and start selling cheap popcorn in the lobby even though I would make a killing. Food and Stuff can open a grocery store in any poor area where there is a open lot for sale. If the margins are so great in poor areas they would be fools not to. The idea that exploitation explains higher prices requires there be a shortage of greedy business people. No one who likes money would open a grocery store in a rich area if they could make more money opening it in a poor area. The situation is changing as crime levels continue to drop and stores such as Aldis open up. This new kind of grocery store makes money by using smaller stores, vertical integration, renting shopping carts, and providing Hobson’s choice for most items. [Previous page](https://boards.straightdope.com/t/why-are-groceries-in-poor-neighborhoods-more-expensive/670784.md?page=1)