If you have recently visited Acme, you may have been shocked at how high the price of your groceries were. This probably made you question why Acme is so expensive. So to help you answer this question, I did some research and dug into exactly why Acme is so expensive.
According to a Consumer Checkbook survey in Delaware Valley, Acme’s prices were about 12% higher, in comparison to 12 other popular grocery chains. There are 4 main reasons why this is. Below are the main factors as to why Acme is so expensive compared to other stores.
Why Is Acme So Expensive
Below are the main reasons why Acme is more expensive compared to other supermarkets and grocery stores:
- Acme is Unionized
- Size of Company
- Specialized Departments
Acme Is Unionized
One reason why Acme has higher prices than other grocery stores is that they are unionized. Unionized employees demand higher pay, better benefits, etc. Generally speaking, unionized employees cost companies more money in comparison to non-unionized employees.
In order to cover these extra costs that come along with being a unionized company, most companies cut costs elsewhere as well as raise costs of their products. This could be one of the reasons why Acme is more expensive when compared to other grocery stores.
Size Of The Company
Another reason why prices tend to be a bit higher at Acme Markets is likely due to the size of the company. Acme has about 163 total locations, which is quite low when you compare it to the thousands of locations that places like Kroger and Walmart have.
This small size means that they are not able to utilize economies of scale as efficiently as other grocery stores can. In other words, because of their smaller size, they are not able to purchase in as large quantities as other stores, thus making their cost-per-product a bit higher.
As a result of their costs being higher, they are forced to charge a bit more when they sell their products to customers. This is another likely reason for Acme’s more expensive prices.
Acme Has Pharmacy Costs
Grocery store pharmacy departments have very high costs to the overall store. There are two main factors as to why this is:
- Pharmacy Employee Salary Costs
- Higher Medical Product Prices
To start, salaries for supermarket pharmacists are about $125,000 per year. This is about 2 to 3 times as much as any other grocery store employee gets paid. While they require significantly more schooling, it is still a high cost to the grocery stores.
The second reason why these prices are a bit higher is because grocery store pharmacies aren’t able to negotiate prices as aggressively because they are much smaller in size. Because their operation is pretty small, they are not able to work out lower prices with their suppliers.
Acme Is A Subsidiary
In 1999, Acme was purchased by Albertsons, another large supermarket chain. So, this means that they are a subsidiary of Albertsons Co.
Because Acme is a subsidiary to a larger company, they likely have to split their revenue with the parent company. Many subsidiaries have some form of revenue split with their parent company. This means that a portion of the money that Acme makes has to go to Albertsons.
This additional cost is likely another factor in why Acme’s prices are a bit more expensive; they need to make up the costs that come along with being a subsidiary company.