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Philly supermarket owner blames soda tax after he has to shut his store down

The owner of this ShopRite location says that people have been shopping in the suburbs to avoid the tax

Justin Sullivan/Getty Images

The owner of a ShopRite supermarket in West Philadelphia is blaming his store closure on the city's soda tax.

What's the story?

On Jan. 1, 2017, the city of Philadelphia instituted a steep tax on soda and sweetened drinks. The 1.5 cent per ounce tax caused major soft drink distributor PepsiCo to suspend all sales of six packs and two-liter bottles of soda in Philadelphia. Since its implementation, the soda tax has been blamed for job losses among retailers and beverage distributors in the city.

Jeff Brown, the store owner, said that the tax was to blame for a roughly 25 percent loss in his businesses. The store plans to close its doors on March 14.

According to WPVI-TV, Brown said that the new tax hurt more than just his sales of soda and other drinks. Customers were choosing to go outside the city limits, to stores unaffected by the soda tax, to do all their shopping.

"So the customers have a lot of choices outside the city where they can avoid this tax," he said. "They voted with their feet."

Brown owns 12 other supermarkets, and said he plans to transfer all 111 employees from the closing store to his other locations.

What did the mayor say?

Philadelphia Mayor Jim Kenney released a statement, denying that the soda tax was bad for business:

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. Here's evidence to the contrary: an ongoing study by three of the most reputable academic institutions in the nation (Harvard University, Johns Hopkins and the University of Pennsylvania) finds the beverage tax has not affected overall store sales, contrary to other public claims by this supermarket chain.

One last thing…
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