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To: Neeka who wrote (5647)1/21/2003 1:03:03 AM
From: Jon Koplik  Read Replies (1) | Respond to of 12247
 
The Discount Grocery Cards That Don't Save You Money

By KATY MCLAUGHLIN
Staff Reporter of THE WALL STREET JOURNAL

They are the three words supermarket shoppers have become obsessed with: "You just saved."

That is the phrase increasingly being chirped by grocery-store clerks these days amid the rapid proliferation of supermarket club cards. These programs are calculated to appeal directly to your inner penny-pincher: Swipe your membership card in the checkout line, and the next thing you know a receipt prints out saying something like, "You just saved $21.83." Message: You are being rewarded with deals so special, they are reserved for members only.

The programs, with names such as the Kroger Plus Savings card and Dominick's Fresh Values Club, are spreading quickly as the $398.2 billion supermarket industry scrambles to compete with discounters such as Wal-Mart Stores and Target. Even Albertsons -- which previously marketed itself with the slogan "no card, no hassle" -- is now rolling out its own Preferred Savings Card. Today, more than three-quarters of Americans have club cards.
CHECKING OUT
[The Cranky Consumer] • Do supermarket discount cards really save you money? We put five different retailers' club cards to the test. Here's how they fared.


But how much cash are you really saving by shopping at a supermarket that has a card, instead of a noncard store? To find out, we went shopping at both types of stores and talked to a range of card experts. We found that, most likely, you are saving no money at all. In fact, if you are shopping at a store using a card, you may be spending more money than you would down the street at a grocery store that doesn't have a discount card.

We learned this the hard way, by going on a five-city, shop-till-you-drop grocery spree. In each city, we shopped at a store using its discount card, and afterward went to a nearby grocery store that doesn't have a card and bought the same things. Then we rolled up our sleeves, unrolled our receipts and crunched the numbers.

In all five of our comparisons, we wound up spending less money in a supermarket that doesn't offer a card, in one case 29% less.

The bottom line: Sale prices -- which were once available to all shoppers -- are now mostly restricted to card holders in stores with cards and are called "card specials." In our experience, items not covered by card discounts tended to be more expensive than at nearby noncard stores. As a result, we paid more at card stores than at noncard stores.

Supermarkets strongly defend their programs. The cards let stores "target savings" to their most loyal customers, says Ertharin Cousin of Albertsons. In addition, some card stores say they aren't competing solely on price, but on things like selection and store cleanliness, too. "Kroger doesn't claim or advertise as the lowest priced supermarket in a particular market," a spokesman says. Stores also say studies based on short grocery lists -- such as the one we used -- aren't conclusive and that shoppers don't stick to lists, but make impulse buys when they spot good deals.

Still, according to industry experts, our shopping experience was typical, because cards are designed to make customers feel like they got a bargain, without actually lowering prices overall. "For many customers, the amount of money saved has not risen," says Margo Georgiadis, a specialist in loyalty programs at McKinsey & Co. The difference is that stores now make you carry a card to get the discounts, whereas before they just offered plain old sale prices.

Stores that don't have cards often cite fairness as the reason. "We believe that all customers should get the same price," said one executive at Treasure Island Foods, a small Chicago chain with no card program.

Cards do generate more revenue for stores, however. About 10% of shoppers at card stores don't use the cards, so they pay full price for things that are actually on sale. That is a windfall for stores because of the way grocery discounting works: Manufacturers -- not stores -- provide most discounts; the stores just pass along the savings. So, if you are paying full price for an item the store got at a discount, the store can pocket the difference.

For shoppers, none of this is small potatoes. The average grocery bill accounts for nearly 11% of a family's disposable income, or more than $4,500 a year.

A growing number of consumers are getting suspicious about card programs. Several limited studies by the grass-roots anticard group NoCards.org (www.nocards.org) have found that stores with club cards are pricier than stores without them, according to founder Katherine Albrecht.

Many people simply resent having to carry around and use the cards, according to E.K. Valentin, a professor at Weber State University who has polled nearly 1,000 card users in Utah. "Did they think prices were cheaper? No," he says. "They thought it was a gimmick." His research will be published this spring in the Journal of Applied Business Research.

To take a measure of the value the cards promise, we drew up a list of 20 or so items, including coffee, olive oil and laundry detergent. (We didn't buy produce, which can vary in quality.) While our method wasn't scientific, it did reflect a fairly typical weekly trip to the store. Then we went shopping.

In Chicago, we shopped first in a Dominick's, a unit of Safeway, where we signed up for its Fresh Value Savings card. Sign-up was simple: Like most stores it took only a couple minutes to fill out a form with our name, address, e-mail and phone. First we gathered the items on our list, a couple of which were on sale as card specials. As an extra test of the card, we snapped up five additional impulse buys, picked solely because they were card specials. (Among them: a diet lasagna that we figured we might need soon, considering all the food we were buying.)

Then we went around the corner and bought the same items at Treasure Island, a local chain. We expected to pay more there -- after all, it has no discount card, and we had always considered Treasure Island to be pricier because of its gourmet selection. But in fact, we paid 5% less at Treasure Island -- $89.97 compared with $94.77 at Dominick's. Our five impulse buys at Dominick's were all more expensive at Treasure Island, but Treasure Island made up the difference with its own sale prices on other items.

In Dallas, we shopped at Albertsons, where more than a third of the items on our list turned out to be card specials. We figured we'd save big. Things got even more interesting when a cashier asked us on a date. He was handsome, but you can't buy groceries with flattery. We paid 8% less at the SuperTarget a few miles away.

But that is nothing compared with how much we saved at a discounter outside Atlanta. We first shopped at Kroger using its Plus card. Then we went to a Wal-Mart Supercenter and tried to buy the same items. This turned out to be tricky, because Wal-Mart didn't have everything we wanted. (They were plumb out of our preferred trash bags, for instance.) But for the items that did match, we paid 29% less than we did at Kroger.

Executives for Kroger and Albertsons called it unfair to compare their stores with discounters such as Wal-Mart and Target because those stores compete on price alone and tend to be cheaper. Several chains also pointed out that their cards do more than offer discounts on food. Safeway, for example, offers a way to earn airline frequent-flier miles; Albertsons card program makes donations to local schools.

In Brooklyn, N.Y., we shopped at a Key Food store with its Keysavings Club card, and at a nearby Associated Food Stores market, which has no card. Key Food was only a few pennies more expensive, but we can't credit the Keysavings card for the low prices. That's because not a single thing on our list was offered as a card special. Key Foods executives declined to comment.

The only shopping trip that made us feel good about club cards was to San Francisco's Marina Safeway. There we spent about $4 more than at independent Cal-Mart a few minutes away, but we also walked out with considerably more food. That is because nearly a quarter of the items on our list were offered as two-for-one deals at the card store. We were able to drive home with, among other things, two sacks of flour and two dozen eggs -- enough to keep us eating quiche practically forever.

A spokesman for Safeway and Dominick's, which are both units of Safeway, said that if we had bought slightly different items or sizes we would have saved more money at Safeway.

• Cranky about customer service? E-mail us at cranky@wsj.com

Copyright © 2003 Dow Jones & Company, Inc. All Rights Reserved



To: Neeka who wrote (5647)2/4/2003 1:28:57 PM
From: Jon Koplik  Respond to of 12247
 
WSJ on squirrels zapping out electric power lines.

February 4, 2003

Fried Squirrel Fails to Find Favor With Public Utilities

It's a War and the Squirrels Are Winning As Electrocuted Critters Cause Power Outages

By BARBARA CARTON
Staff Reporter of THE WALL STREET JOURNAL

Robin Folcik was reading the newspaper at her breakfast table one Sunday last August when the lights blinked, smoke poured from the sockets, and a charged buzz came over the room, making the hair on her arms stand up.

"I thought my house was blowing up," recalls Ms. Folcik, a waitress in Southington, Conn.

An inquiry into the matter by Connecticut Light & Power found "remnants of a squirrel" and shards of a ceramic electrical switch at the base of utility pole #85324. The conclusion: The critter had electrocuted itself and, in so doing, triggered a massive power surge that blew out appliances and television sets all over the neighborhood.

Like many other utilities around the country, Connecticut Power says it's having trouble these days with squirrels causing outages, damage and outraged customers. Utilities in recent years have stepped up efforts to fight the acrobatic rodents -- buying everything from predator urine to baffles that look like pizza pans to fend them off.
[Cover of Comic Warning of Dangers of Squirrels]
A Celina Utilities comic book raises public awareness about the dangers squirrels pose to public power.

It's a war and the squirrels are winning. It's escalating as the electrical grid spreads and more wires are closer to more animals whose natural habitat has been destroyed. About a thousand miles of high-voltage transmission lines are added each year in the U.S.

At Pepco Holdings Inc., a 1.8-million-customer utility in Washington, D.C., squirrel-related outages rose to 999 last year from 702 in 2001. Pepco is busy installing $5 insulators -- they look like Coke cans -- around live wires that feed into overhead transformers. The insulators are meant to keep the animals from perching atop grounded transformer tanks, then unwittingly touching a live wire -- in which case it's lights out, both for Pepco customers and bushytail.

Pepco views its efforts as merely "a holding action," according to spokesman Robert Dobkin, because "there's nothing squirrels can't get by."

Longmont Power & Communications, which serves 35,000 customers north of Denver, says that more than 90% of its significant outages are caused by squirrels, which cut the power 393 times in 2002, up from 349 two years earlier. The increase took place despite measures Longmont has taken to thwart squirrels by banding utility poles with slippery, hard plastic.

In the past two years, the municipal electricity system in Tullahoma, Tenn., spent more than $25,000 on "Varmint Shields" -- dark-gray plastic disks that look like barbecue grills -- so squirrels can't cause trouble at various hot spots, including transformers. But the utility considers the effort a "limited" success, given that it has reduced squirrel outages to 136 in 2002, from the 148 it reported in 1997.
TELL ME A STORY
Read selected excerpts from the anthology "Floating Off the Page: The Best of The Wall Street Journal's 'Middle Column.' "

Last year, the Tullahoma utility proposed that a trade association of Tennessee Valley Authority utilities do a study called "Why Squirrels Eat Aluminum Connectors." The TVA nixed that, citing plenty of existing industry reports considering possible preventative steps. One mulled whether painting utility poles red might ward away the animals and concluded that it wouldn't.

What customers don't understand, say exasperated utility workers, is that the cute little forager is an obsessive foe. A squirrel's teeth grow six to 10 inches a year, unless the rodent has plenty to gnaw on. And as everybody knows, squirrels are agile, and they can jump.

Squirrels follow paths that they have taken before on their way home or to an acorn stash, and have an internal navigation system for following a route over and over, using remembered objects to plot a fix with singular determination. "A squirrel thinks, 'This is the way I've gone all my life, and just because you built a substation, don't think for one minute I'm not going to go there,' " says Sheila Frazier, who advises utilities as a senior project manager for Energy Consulting Group LLC of Marietta, Ga.

Darrell Floyd, a transmission specialist for Southern Corp.'s Georgia Power, once tried staking fake owls on a few substations to scare squirrels off. He says when utility crews revisited one of the sites a week later, they found a squirrel perched happily on an owl's head.

Falling trees and branches obviously cause plenty of outages, too, but dealing with squirrels is "so aggravating" to utilities, Ms. Frazier says. "You've got to drive forever to some place, replace the transformer -- and the worst problem is you know in your heart it's a squirrel, but you don't often have a fried carcass to show anybody because predators have already snatched it, and customers are crying bloody murder."

Linemen are so fed up with the animals, they "even yell at me when I slow down to let a squirrel go across the road," says David Schmidt, a manager at Celina Utilities, a municipal power system in Celina, Ohio.

Many utilities say trapping squirrels is too expensive. Shooting them is costly and in many places restricted. Immigration will quickly repopulate an area where squirrel numbers have been reduced drastically.

Thus the development of anti-squirrel gear is surging. In one report on outages, the Electric Power Research Institute, a nonprofit analysis group in California, called the squirrel "Public Enemy No. 1.

Entrepreneur Douglas Wulff, of Columbia, Mo., hopes for a hit with his $50 "Critter Pole Guard." Introduced last year, it looks like a string of polypropylene bratwurst that wraps around a utility pole. When a squirrel tries to clamber over it, the bratwurst spins and tosses the animal off.

"Squirrels are us," says fence maker Fred Smith, who claims sales of his electrified substation barrier have climbed to $1.4 million since he introduced it four years ago. In Chicago, Joe Seid, sales manager at Bird-X, Inc., is pushing products such as the $95 Transonic IXL. Based, he says, on "psycho acoustic jamming" principles, it blasts "high intensity" sound waves that can't be heard by humans but sound like jackhammers to squirrels.

Among other things, Connecticut Light is trying vented bottles of fox urine hung every 10 to 12 feet along substation fencing. A quart sells for $37.99 from Predatorpee.com, in Bangor, Maine. But the pungent vials didn't help avert last summer's power surge, which the utility is still trying to clear up.

More than 100 customers have sought damages for ruined appliances, and many have already received compensation, including Ms. Folcik, who protested that she lost two TV sets, a Sony PlayStation, two video-recorders, an air conditioner, a stereo and speakers, and a treadmill.

Customers want the utility to spend more on maintenance, and have taken their case to the state's Department of Public Utility Control. The utility claims that a squirrel was responsible, and no device on the market could have prevented what happened. But some angry customers don't buy that story and have suggested instead that "perhaps C & P maintenance crews were responsible," DPUC records say.

"I thought, 'A squirrel? Oh yeah? Again?' " says Ms. Folcik. "It has happened before, and they always blame it on a squirrel."

Write to Barbara Carton at barbara.carton@wsj.com

Updated February 4, 2003

Copyright © 2003 Dow Jones & Company, Inc. All Rights Reserved.