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What IS "Healthy Competition" ... Cheap Gas? Cheap Drugs? Thoughts on Colorado State House Bill 1208

While waiting for my groceries to be rung up at the local King Soopers, I was doing everything I could to avoid being blinded by the 51 thousand shiny magazines covered with pictures of Anna Nicole Smith and Britney Spears. So, I glanced down to see a flyer taped to the little check writing platform. It caught my eye because it said "cheap gas" somewhere - and "cheap gas" is way more interesting to me than who is getting custody of a rich celebrity baby or how bald and sad a former pop idol is today. So, not having much time, as my groceries were almost completely bagged, I jotted down a little information on the "cheap gas" (State House Bill 1208), trekked through the rain to the car (that I had JUST cleaned...) with my 3 year old, stepped in a puddle, got in my car and headed home.

After dinner, I Googled "State House Bill 1208" and found a recent article in the Rocky Mountain News, by Alan Gathright, with the information I was looking for.

If you are like me, driving a little out of the way to save a few bucks on gas is worth it. Luckily, the closest gas station is at King Soopers. I like this, because for every $100 I spend at their store, I can save 10¢ a gallon on gas. We are a family of 4 and 3 are hungry boys, so I get plenty of gas savings ... Now, I have also noticed that Safeway, Sam's Club and Albertsons offer similar gas "discounts" to their loyal customers. I never really gave it much thought, until I read this article in the Rocky Mountain News.

Apparently, last year some of the smaller gas stations in Montrose, Colorado "citing a 70-year-old predatory pricing law ... won a $1.4 million court judgment against King Soopers for giving gas discounts to customers who bought groceries."

This then sparked a decline in stores like Wal-Mart and Target offering inexpensive generic prescription drugs to their customers. Were they afraid of the same fate?

Now we have Colorado State House Bill 1208 that would allow supermarkets, like King Soopers, and other "big box" stores, like Target, to offer "deeply discounted gas and prescription drugs" to their loyal customers. Basically, this Bill would "remove the illegality of the loss-leader (pricing goods below their production cost) from Colorado's Unfair Practices Act. The Act, passed into law in 1937, is designed to prevent merchants from using predatory pricing to monopolize the market." (Northern Colorado Business Report)

This Bill has already passed the Affairs Committee and is on its way up to the House for debate. The supporters of this Bill believe that it will "breed healthy competition."

Ok. Healthy competition. I am all for "healthy competition" - especially when it comes in the form of making prescription medicines affordable to those who need them.

But, I really don't know about the gas issue... I will go out of my way to save few bucks on gas, but what are the real repercussions?
Here are my dilemmas:

Will the "discounts" be so large that the "healthy competition" will only be amongst the mega stores and supermarkets? Will this Bill mark the end of the family owned/ franchised corner gas station? Are we going to "Wal-Mart" the country to death?

Will the "cheap gas" pacify the American gas guzzler, thereby hindering the need for the MUCH NEEDED alternative energy and fuel movement? Will it make us "forget" WHY we need to move away from oil?

OR ... (Here's a stretch...)

Will the "cheap gas" make the oil business less lucrative, allowing for expansion into other fields - like alternative energy/fuels?

Are we short sighted to ask for "cheap gas" or is it a necessary for "healthy competition" ... ? Well, until 1208 becomes a law (or doesn't) it will be "just" a bill...

Posted by Mariana Wagner ~ Colorado Springs REALTOR® on 03/10/2007 10:09 PM

Comments (20)

colorado, colorado laws, colorado state house bill 1208

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20 Comments on What IS "Healthy Competition" ... Cheap Gas? Cheap Drugs? Thoughts on Colorado State House Bill 1208

MAR

2007

What really bothers me about the price of gas is not the yo-yo pricing that changes daily, it's the tax. We are taxed so badly on gas and for what? It isn't going into the roads, as evidenced by Colorado Springs Department of Transportation. And as for bill 1208, we still live in America. Remember fair trade? Sorry about your clean car.

Dena - I know! Where DOES all that tax go? You are right, our roads and public transportation sure do not reap any benefits from it... Also, where does the term, "MONOPOLY" fit into all of this?

I agree with Dena on this one. I do detest wal-mart and anti-trust trade but awareness is the key. I go out of my way to buy from smaller businesses. Most of the time what you get ends up being less expensive than the Wally Worlds because the quality is better.

I wish more people were aware of the ramifications of making the big bigger without legislating us to death.

MAR

2007

You are Right, Renee - Awareness IS key. Carole Cohen wrote a small post abt WalM that sparked quite the discussion in the comments. The whole thread is well worth the read, and really explores some of the ramifications of BIG. Herein lies the double edged sword, though ...like you mentioned, how many laws need to be made, how many legislative intrusions need to bombard their way into our lives in order to keep BIG under control and save our small businesses? It is frustrating.

Mariana,

Your post touched several trigger points in my world; many of them in some way connected to bills we have been following in our own state legislative session and on city council during the past few weeks. Unfortunately, I don't think any of them have simple and easy resolutions. Many of the issuues are being tabled, and some of them should be. Whether passed or tabled, I am afraid that we will continue to debate and discuss many of them for some considerable time.

We just have to be aware and pay attention.

Mariana, I enjoyed reading this and the comments. I also enjoyed the YouTube. I think that was probably from before your time but it sure did take me back to my childhood. Conjunction junction, what's your function?

Unlike my favorite Vegas REALTOR Renee, I don't detest WalMart. I admitted on Carole's post that I love it. (don't hate me Renee!) I don't go there for everything. I shop according to my needs and sometimes I hit the big guys (CD's, office supplies, etc.) and sometimes I hit the little guys (fabric store, bagels).

I'm not sure if any of my shopping habits originated in Cuba (where I'm from) where I watched Mom stand in line for days to buy something that hadn't arrived yet. I've seen grown people cry walking into one of our mega-retailers because it's mind boggling the amount of things we have available and back home they have literally nothing. I'm talking about actual tears. Neither extreme is good. One place doesn't have what they need. Another has so much most don't appreciate it.

I really do understand Renee's thinking. I had a small business of my own many moons ago and part of the reason it unfolded was that I couldn't compete with the big guys on pricing. But that was only one of the reasons. I'm not holding any grudges.

Sorry I wrote so much!! Enjoy your Sunday all =)

Maraiana, I really loved this post. Great topic and very well written. Love the video too. I'm on this fence with is issue. I do feel for the little guy that will be affected by this but I'm also a firm believer in free enterprise. I for one would not quit going to my local corner gas mart just to save few bucks elsewhere. I'm all about the convenience.

Broker Bryant's Star of Excellence

Mariana - great post, and I'm with BB on this one - I feel badly for the small businesses, but I'm also all for survival of free enterprise. And like Maggie, I love Wal-Mart - so much under one roof and most at great prices. I do still frequent other stores, too - just depends on my needs and where I am when I need to pick up a few things.

Ann

Eloise- Sometimes I think that it is a Catch 22 - There are too many facets to this issue. And how are we going to come to any decision that everyone is happy with? I guess we never will. But you are right - BE AWARE. Thank you.

Maggie- Of course I am old enough to remember School House Rocks! I watched it all the time. I'm not THAT young... :o) (Three -Oh! It's the Magic Number. Yeah it is ... It's the magic number!) But you bring up a very good point ... PERSPECTIVE. My experience is on the other end of the spectrum, where I have seen WalM devour smaller businesses - new ones as well as well-established ones. I have felt it very personally. There are SO many ways to look at this, and I am always willing to consider new opinions ... so I am very up in the air right now.

Bryant- Thank you for the star and for your comments! I am up in the air - above the fence, too. I am WAY into free enterprise but I also know that starting a business is already a recipe for failure and businesses like WalM make it even harder. Where does the American Dream start and stop? Or, like with the internet and real estate, will small business owners need to readjust the standard business plan - think about things differently - have different kinds of goals? WalM and others like them, are called "Big Box" stores. I guess small business owners need to THINK OUTSIDE THE BOX ... Hmmm... Great. I have just created a WHOLE new topic to think about all day...

Ann- Thank you. I know - There ARE a lot of benefits to stores like WalM. Sometimes it is a balance - it is easy to be altruistic to the point of insanity, too ... which does no one any good.

Maggie <mymostexcellentmiamirealtorfriend>: Of course I only respect your opinion and won't detest you at ALL for that. I do go to Wally World only on rare occasion because on occasion I don't want to drive half way across the valley to a Joann's or fabric shop (I sew too!) for thread. I spend as little as possible and limit my trips. Going there gives me hives - and I am not joking! What are you saying you are a "former" small business owner? You are one now, silly girl! I like to go in to small places where they learn your name and smile. It is a great way to make connections and acquaintances. I didn't realize you were from Cuba so WOW! Hats off to your family making their way here! Now call me silly for watching "Hogan Knows Best" in Miami (I am so MIami/Florida stupid) but doesn't Miami have a ton of open air markets? I would learn Spanish (like they tried) just to go to those markets! THat is right up my alley! Buenos Dias Mi Amiga! Maybe someday I can make it down there and you can take me there!

Mariana: The reason why the big have allowed to swallow the small is FEDERAL regulation and tax incentives so you are right about the double edged sword. The small cannot keep up with the big on regulation and the big take advantage of so many tax loopholes and incentives that the small cannot survive. I owned a daycare for many many years and I was licensed for the largest in-home daycare (I even had a couple of employees) and it was so hard to compete witht he big franchised types because the regulations were different as far as caregiver to child ratios. I found that extremely unfair and it was hard to compete as far as rates go. They could take more children for cheaper amounts while I had to charge more. I just had to go way far out of my way to prove that we provide better quality to justify the price!

Renee- My Mom owned a neighborhood health food store and qualified for a small business grant. But "they" pulled the grant from her when "they" found out that a WalM was slated to be built just a few blocks away. My Mom's store went under and it really crushed her. I do not want to be a grudge holder, but it IS a bit personal to me. And the whole "outsourcing" issue is another thorn in my side. But it is what it is and we must adapt, right?

Mariana: I don't know that we must adapt but if we take our dollars and spend them somewhere else it can send a clear message. Unfortunately there is not enough awareness for it to make an impact. I am too much of a realist to think that my little boycott of Wally World will put them out of business or even make an impact. Another gripe I have is China. While some people find it spectacular that China is doing so well they (or was it we?) completely ruined our manufacturing sector by our lust for their cheap Chinese goods. Now they are in a boom phase and oil & building materials are spiking because of it too. I think the media doesn't cover it because of free trade agreements and politics!

Sorry I have gotten way off the beaten path but this is a great subject Mariana!

Having worked as a publisher's representative to small and independent bookstores, I was able to witness first-hand their devastation with the advent of the big box bookstores and Internet bookselling. Losing many of these bookstores, which were unable to compete on price with the new wave of stores has been a loss for their respective communities culturally and economically. While it's not always evident at the outset what the long-term impact will be in our communities when we buy gas from Megastore, Inc. instead of Mom and Pop's corner service station, loss of individual businesses in our communities has been underway for a long time now. It means less and less businesses to underwrite the local marching band and Little League teams and more disconnection of businesses from the communities that they serve. I'm not sure whether this trend can be reversed, but if we strive to consciously make local choices, we can show our support of the communities we live in.

Renee - You are very right. There is NOT enough awareness and too many people do not really care. Then there is Sams Club, whose motto is "We are here for small business" ... Oh! The irony! And China?!? Don't even get me started ... ... ... Do you think that they will send us a Thank You card?

Irene- You put it brilliantly! We, as a nation, can be so short sighted when it comes to things like this. I guess since Realtors cant be outsourced or WalM'd to death, then it is now up to US to sponser youth sports and school events. Hmmm.. THAT is really something to consider.

MAR

2007

I agree with some of the things already said, and I am all for cheaper gas too with how much I drive but the KS gas stores up here are a little more distant for me. So I haven't used the discounts there & will continue to support the smaller owned stores and am happy with that choice regardless of the distance....but I still have to wonder who is paying the difference for these lower gas outlets? Someone has to be. Does this mean my groceries will cost more in the stores offering these discounts? Just another angle to think about....

Hi Steve- That is a good point. I DO wonder, but it probably has more to do with quantity sold. If they sell enough of anything, it will pay for itself.

Hi Mariana, Yes, quantity makes up the cost - but don't you think these corporate giants are doing this for advertising sake, not from the goodness of their hearts? They are making money, whether its at the pump or in increased store sales, and that is the only reason they are doing it. My corner gas store is highly competitive in price and I'll stick with him if the bill passes. My favorite little butcher just closed its location closest to me and I hear its because another larger grocer bought the whole strip mall, so I'm doing what I can to support the small local businesses whether its gas, steak, lenders, or whatever.... The smaller businesses are what bring character and originality to each of our communities & so I think it is important to try and do what we can to support them.

You are right - it is the small businesses that DO bring character and originality to the community. THe more people understand the ramifications, the better it will be. IMHO

oh Mariana.. i'm too tired to think. so i'll comment on the litle bill video. i loved that growing up! :)

I'll have to come back and read this blog.. your blogs require thought! yikes!! what a thought! please done be mad! now i have to remember to come back. i hope i dont forget.. oohhh,,, DOH!! let me try to spell kumquat twice..

MAR

2007

Mariana,

Your post causes pause. It is very easy to look at things we would all love to have especially if we could get them at a reduced cost. But isn't that exactly the reason why we have more and more people unemployed every year in this country?

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