Citing the city’s controversial beverage tax, an Overbrook supermarket is slated for closure in three months.
After 30 years of serving the community, the ShopRite supermarket located at 67th Street and Haverford Avenue, has announced it will close on March 14.
“Since Mayor Kenney implemented this beverage tax, this store has lost about a quarter of its business and it’s gotten worse over the last couple of years,” said Jeff Brown of Brown’s Super Stores, which owns 13 Philadelphia –area supermarkets.
“This store now loses a lot of money and we’re not in a position to keep it going,” he said. “The Haverford store is down $7 million a year in revenue. People go outside of the city to buy their beverages and when they are there, they do their whole shopping order. With that kind of loss in sales, now the store loses a lot of money every year. It’s the unintended consequences of the policy. It’s a failure. It was not well thought out.”
According to Brown, the store’s 111 employees will be able to move to other locations in the city.
“The people in this store have been with me for a long time and we plan, when the store closes, to transfer them to our surrounding stores but ultimately there will be another 100 jobs losses, but not the people in the store because they are senior [employees],” Brown said.“We will slow up on our hiring and hopefully attrition will allow us not to lay anyone off, but we will be down another 111 people after we do the transition.”
He noted that the beverage tax is taking a negative toll on his other supermarkets located throughout the city.
“I have other stores in the city that lose money because of this beverage tax and if the beverage tax was repealed it would save a lot of hardship on a lot of people,” Brown said. “That’s what needs to be done. The truth of the matter is we have tried for two years to come up with some way to mitigate the damage of this beverage tax. We’ve tried a lot of different things and it doesn’t seem to be any way to overcome it.”
ShopRite will offer Lyft ride sharing services in an effort to help consumers affected by the closure.
“We put these stores in neighborhoods to try to correct a food desert problem and we have vulnerable customers we are concerned about, so for 2019, we are going to provide them with Lyft services to transport them from this neighborhood to our Parkside store,” Brown said. “We’re going to absorb the cost of that just to help our customers with this problem.”
In an emailed statement, Mike Dunn, the mayor’s spokesperson, said the beverage industry has not presented evidence that the tax has impacted sales.
“It is no surprise that Mr. Brown has decided to scapegoat the Philadelphia Beverage Tax, but neither he nor the beverage industry have yet to present any evidence that the tax has had any impact on sales,” Dunn said a statement.
“Here’s evidence to the contrary: an ongoing study by three of the most reputable academic institutions in the nation (Harvard University, Johns Hopkins University and the University of Pennsylvania) finds the beverage tax has not affected overall store sales, contrary to other public claims by this supermarket chain. In fact, just a few months ago ShopRite’s website showed a total of more than 400 job openings.”
He said since the tax took effect, wage tax revenues in the sectors most affected by the tax have been strong, while unemployment claims in those sectors have been down and the City has seen the opening of several groceries and markets since the tax took effect – including the largest-ever Wawa.
“Clearly, a good number of retailers have confidence in their ability to operate a profitable grocery in Philadelphia,” Dunn said. “They have the ability to adjust their inventory to accommodate shifts in sales volumes. And it is unlikely that the viability of one product line should be so damaging to a grocery store with a wide variety of products. Also remember that the beverage tax is a job creator, with 278 new PHLpreK hires since inception.”
“We are always concerned when a retailer is ‘struggling.’ But folks need to look at the reality of the situation – not the rhetoric of the industry.”
“Remember — the soda companies, the bottlers and the beverage industry at-large are multibillion-dollar companies. They don’t have a need to pass this tax on. They can pass a portion of it on, or they can cover the cost themselves. The fact is, it is the industry that is not showing any sympathy toward their own retailers. “
Councilman Curtis Jones, who represents the 4th District where the supermarket is located, said, “We’re very concerned” about the closing of a store that has been a “valuable asset in the community.
“We don’t want to have consumers in Overbrook and Overbrook Park not to have choices.”
There are at least five grocery stores in Jones’ district, which includes the closing ShopRite.
The councilman said he was aiming to hold a meeting with Brown and the mayor’s office in an attempt to save the store.
“I am going to enter into meetings with him [Jeff Brown] and the administration to talk about how that site will be utilized and hopefully we can do a Hail Mary to keep it open,” Jones continued.
The announcement about the closing comes at time when City Council was expected to hold hearings on the sweetened beverage tax and its finances. City Council’s next scheduled session is Jan. 24, and a hearing was expected to be scheduled sometime after that.
City Council passed the soda tax by a 13-4 vote nearly three years ago and it remains among Kenney’s top legislative accomplishments.
The closure of the Overbrook ShopRite in March would come weeks before the May primary, when Kenney is seeking a second term. The entire 17-member City Council is also up for election.
When asked whether the closure could be political, Jones said, “I don’t know the answer to that. I do know Jeff [Brown] to be an honorable businessman. And he has issue with that tax.”
Asked if he still supported the sweetened beverage tax, Jones hedged.
“I’m going to look at the [sweetened beverage tax] hearing and listen to what’s going on to see what the intended and unintended consequences are,” he said.
In November the Rev. Jay Broadnax, president of the Black Clergy of Philadelphia and Vicinity, called for repealing the tax, saying it has a regressive and disproportionate effect on African Americans and the poor.
In response to the announcement, Anthony Campisi emailed a statement on behalf of the Ax The Philly Bev Tax Coalition.
“This tax is claiming a supermarket that served a working-class neighborhood for 30 years. This community is losing an economic engine and a mainstay of the neighborhood where families shopped and worked,” the statement read.
“Make no mistake: This closure is the inevitable result of a tax that has drastically raised prices on thousands of beverages and has driven Philadelphia shoppers to the suburbs. This news is the clearest evidence yet that the beverage tax is wrong for Philadelphia families. Our elected leaders need to implement policies that lift families out of poverty — not create new food deserts that deprive residents of access to groceries.
“It’s time City Council and Mayor Kenney listen to their constituents, who overwhelmingly oppose this levy, and repeal a tax that is hurting Philadelphia’s neighborhoods and depriving its families of jobs.”
(Staff Writer Michael D’Onofrio contributed to this story)