Philadelphia's Soda Tax Just Killed a Grocery Store

Shoprite owner says he's lost 25 percent of his business since the soda tax made sugary drinks significantly more expensive.

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A grocery store in West Philadelphia will close in March, and the store's owner says the city's soda tax is to blame.

Jeff Brown, who owns several Shoprite stores in the Philadelphia area, says his location in Haverford has seen a 23 percent decline in sales since the soda tax was implemented in 2016. The tax adds about $1 to a two-liter bottle of soda, and more than $2 to a six-pack of cans. It applies not just to sodas but to sports drinks, juices, and other sweetened beverages.

The store's impending closure means that residents of the area will have one fewer option for buying soda, yes, but also milk, eggs, vegetables, and other essentials.

"I built these stores to help people live healthier, longer lives," Brown tells Philly.com. "This is taking a success and destroying it."

The location of Brown's grocery store is a significant part of the story—and demonstrates an important problem with the city's soda tax. On the map below, I've highlighted the location of the soon-to-be-closed Shoprite within the city limits of Philadelphia, which is shaded red.

Google Maps

As you can see, customers with cars who might have previously shopped at Brown's store could easily dodge the soda tax by driving to the west or south and leaving the city. Or if they already lived across city lines, they may have stopped coming into Philadelphia and found an alternative grocery store.

This isn't just a hypothetical. A report published last year by Catalina, a market research firm, found that soda sales inside Philadelphia city limits have fallen by 55 percent since January 1, when the tax took effect; sales outside the city have grown by 38 percent.

The city seems to have little sympathy for Brown's plight—or for that of his employees or customers. In a statement to Philadelphia's CBS affiliate, a spokesman for Mayor Jim Kenny (who championed the soda tax's passage) said Brown was trying to "scapegoat" the tax as a justification for closing his doors, and argued that "the tax has not had any impact on sales." To bolster that second point, the mayor's office also pointed to a Harvard study released last year that he said showed the soda tax did not reduce overall sales at Philadelphia-based chain stores.

But that's a little misleading. For one thing, what the Harvard study actually found was that beverage sales at Philadelphia grocery stores had fallen by 57 percent since the soda tax was imposed, but that stores' bottom lines were not hurt because most were passing 100 percent of the higher costs on to consumers.

For another, it's disingenuous for the mayor's office to claim that the tax had no impact on sales when the very point of the tax is to impact sales—under the premise that people in the city will be healthier if they purchase and consume fewer sugary drinks. This is a little bit like President Donald Trump's advisers claiming that consumers aren't noticing the higher prices created by tariffs. If that's true, then the underlying policy has already failed. Both tariffs and soda taxes are meant to alter consumers' behavior, and they cannot do that if consumers don't notice the costs.

It's also worth noting that the Harvard study was bankrolled by Bloomberg Philanthropies, a nonprofit connected to former New York City mayor (and first ballot entrant into the Nanny State Hall of Shame) Michael Bloomberg that has advocated for the Philadelphia soda tax and similar taxes in other cities.

There are, of course, myriad reasons why a particular business might fail. Maybe Brown's store was already on the rocks before the tax came along. But it seems reasonable to think that the combination of the tax itself and his store's location, so close to the tax-free suburbs, was a significant blow. For the mayor's office to suggest otherwise adds insult to injury—and demonstrates, yet again, that Kenney is committed to blaming the victims for his own failed policy.

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  1. “It’s also worth noting that the Harvard study was bankrolled by Bloomberg Philanthropies, a nonprofit connected to former New York City mayor (and first ballot entrant into the Nanny State Hall of Shame) Michael Bloomberg that has advocated for the Philadelphia soda tax and similar taxes in other cities.”

    This guy’s ego and ambition known no bounds.

  2. Soda taxes are asinine, but this sounds like BS. How much of his business was soda?

    1. Likely very few people came in just to buy soda before the tax. After the tax, those going elsewhere to avoid the soda tax are likely going elsewhere for everything, not just a separate soda run.

    2. The point is now how many soda sales he lost; it’s that people who used to come to the store for all their shopping saw no reason to split their shopping in two — who the devil would buy soda at one store and then drive elsewhere for everything else? People just went to some other store outside the tax area for all their shopping.

    3. “Soda taxes are asinine, but this sounds like BS. How much of his business was soda?”

      I’ll be happy to answer after you show me your books for your grocery store.
      People who ‘know’ how much a business makes and how easy it is to make a profit are a source of constant amazement to those of us who actually do so.

  3. The store’s impending closure means that residents of the area will have one fewer option for buying soda

    IMPENDING SODA DESERT!!

  4. BREAKING NEWS: Filthacrapia Elects Mayor From Pool Of Available Assholes, Mayor Acts Like Asshole

    1. +1 million

    2. And he’ll be re-elected by an overwhelming margin, regardless of how much he screws over the voting public.

      Just like Nutter. And Street. And Rendell. And Goode….

  5. West Philadelphia born and raised…

  6. I grew up in this area, yes, West Philadelphia born and raised. There is an Acme in the suburbs, less than 3 miles away in a straight line. I’m sure Overbrook residents who drink lots of soda drive there to do all of their shopping. It is a shame for those who have to walk to the store. Kenney is an idiot.

    1. ^^THIS^^

      Former Yeadon/Lansdowne here – There’s an Acme in Yeadon (Church Street), and a Pathmark in Upper Darby (Baltimore. Pike). Both easy to get to from West Philly with or without a car (SEPTA buses saturate eastern Delco).

      It would be interesting to know if they’ve seen a spike in soda sales.

  7. soda sales inside Philadelphia city limits have fallen by 55 percent since January 1

    SUCCESS!

    That was the point, right?

    1. Well, ideally, the parasite doesn’t kill the host.

      1. Mayor Kenney apparently thinks the parasite was good, and the host killed himself.

      2. Technically, if it doesn’t harm the host, it’s a symbiote, not a parasite.

        1. Symbionts are any pairings in a close, long term relationship. Parasites are symbionts which benefit from harming their partner.

  8. I lived in Philly in the early 90’s and would go to the Shoprite in the evenings and wander the aisles until they put the donuts on sale and then buy up a dozen and eat them all. It was the store around 46th street, if I recall correctly. This story makes me sad. Also I would buy a gallon of milk. Never soda. Who drinks soda? It’s just empty calories. No one needs soda.

  9. In a statement to Philadelphia’s CBS affiliate, a spokesman for Mayor Jim Kenny (who championed the soda tax’s passage) said Brown was trying to “scapegoat” the tax as a justification for closing his doors, and argued that “the tax has not had any impact on sales.”

    The policy must work! Don’t believe the evidence! Lies! All Lies!!!!!

  10. Well if he can’t be profitable without exploiting the health of his customers then he shouldn’t be in business

    / Leftist

  11. “A report published last year by Catalina, a market research firm, found that soda sales inside Philadelphia city limits have fallen by 55 percent since January 1, when the tax took effect; sales outside the city have grown by 38 percent.”

    Why won’t the proles do what we tell them is good for them?

  12. Can u get busted for smuggling sodas across the border? Like if you make a run for a bunch of your neighbors to make the trip worthwhile and bring back a bunch of mountain dew, like 10 cases or something?

    1. Nope. No tax stamp on sodas.

      But I wouldn’t try selling loose cans inside the city limits.

  13. It is an outrage that sugar free drinks like diet pepsi and monster absolutely zero are included! what kind of scam is that? how can a sugary drinks tax apply to non-sugary drinks?. are the sugar free drinks a gateway drink to the sugared ones?

  14. Well, that’s a prime example of how these policies kill business…
    https://aladyofreason.wordpress.com/

  15. what the Harvard study actually found was that beverage sales at Philadelphia grocery stores had fallen by 57 percent since the soda tax was imposed, but that stores’ bottom lines were not hurt because most were passing 100 percent of the higher costs on to consumers.

    Huh? The stores are passing along the tax on 43% of their previous soda volume, so their bottom line isn’t hurt? The lost 57% of soda sales didn’t contribute to the bottom line?

    1. It’s shit economics. What someone decided is that volume doesn’t matter, as long as you’re making the same profit-per-sale. As if the only cost of operating is the cost of the product or some shit.

  16. Democrats make the dumbest laws.

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