To save customers from doing mind-bending calculations in grocery aisles, a handful of retailers are adding the final, after-tax prices to liquor shelf tags in Washington.
“We learned very quickly it’s tricky and difficult for people to figure out,” said John McKay, executive vice president of Costco Wholesale, which will add final prices on name-brand liquor products in the next 60 to 90 days. It already displays after-tax prices on private-label Kirkland Signature liquor.
The Metropolitan Market chain is in the process of doing it, and Safeway is considering it.
Beginning June 1, when large retailers began selling liquor in Washington, most posted signs showing customers how to calculate taxes themselves. It involves adding 20.5 percent for liquor sales tax, plus a liter tax that varies depending on the size of the bottle. In some cases, those taxes can double the initial retail price of the liquor.
The nonprofit Tax Foundation shows Washington’s liquor taxes as the highest in the country in 2010 – roughly $26.45 a gallon, compared with $24.63 in Oregon, $10.96 in Idaho and $3.30 in California.
Mike Hargreaves, owner of Tacoma’s Stadium Thriftway, said “We are already there.”
“We’ve always had all of the taxes posted. We want people to be totally informed. We’ve been working on this since the very first.”
Likewise is Karen Ferguson, owner of Ruston Liquor Store, trying to keep her customers totally informed.
For Ferguson, however, the process is more cumbersome. She is typing each of the price tags individually.
“I put it there big and bold,” she said, “so the customers don’t flip out.”
Some have indeed flipped out, she said Friday. They are angered mostly at what they perceive to be higher prices than they paid before the state exited the business of retail liquor sales.
“We explain it to people who are having issues. We get beat up every day. People yell at us every day,” Ferguson said.
Issaquah-based Costco, which wrote the initiative that voters passed last fall to privatize the state’s liquor system, already shows after-tax prices for its private-label liquor. Employees manually print those signs, because the prices don’t change often.
Prices on name-brand liquor, though, can change frequently, and Costco does not want employees at each of its 27 Washington warehouses manually rewriting the signs each time it happens, McKay said.
So, the company is reconfiguring its sign-printing system to allow it to show multiple taxes and the final price. It will take 60 to 90 days before customers see the new shelf labels, he said.
Metropolitan Market is updating its labels to show after-tax prices, too, said vice president of marketing Brad Halverson.
It will continue to list pretax prices as well, so customers can compare with competitors more easily, he said.
Safeway is reconsidering its shelf tags on liquor as well, said spokeswoman Sara Osborne. Factors include possible future adjustments to liquor taxes, shelf tags at other retailers and the fact that taxes are not shown on other taxable items at Safeway.
Fred Meyer and QFC, both owned by Kroger, do not intend to make similar changes. Said Melinda Merrill, a Fred Meyer spokeswoman: “I haven’t heard from our customers about it at all.”
Total Wine & More added final prices to shelf tags this week. President David Trone of Total Wine said his chain initially programmed its computer system to show after-tax prices. But on June 1, most competitors displayed and advertised their lower, pretax prices instead.
Fearful that its prices would look expensive, Total Wine reprogrammed its system to display pretax prices. “We told IT (information technology) we goofed,” Trone said.
Now he’s rethought the shelf labels again and this week began displaying taxes and after-tax totals for liquor, like Bartell Drugs did all along.The News Tribune’s C.R. Roberts contributed to this report.