What’s the ‘scoop’ on grocery prices in Sitka?

What heals a heart more than ice cream? What if the heart is broken, or broke? It’s a treat to be sure and a bit pricey, but in Sitka it’s even pricier. In the next installment of food reporting for our series, “The Cost of Living in Sitka,” KCAW’s Katherine Rose decided to track her favorite ice cream up the west coast to see what it costs down south and where the price spikes on its journey to Sitka.

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I’m walking around a Sitka grocery store doing my most expensive weekly chore, stocking up on food for the next seven days.

“Get whatever coffee you want, I don’t care,” I tell my boyfriend Adam.
“Do we have coffee?” he asks

Adam and I shop for groceries together, and we split the cost right down the middle. We’ve gotten shopping on a budget down to a science over the past few months. But one treat we sometimes afford ourselves is ice cream. Well I do, at least.

“I used to eat ice cream all the time,” says Adam. “Now that I’m lactose intolerant, I can’t eat it at all. Luckily there are a lot of dairy alternatives, they just cost a lot.”

But even plain old ice cream is kind of expensive in Sitka. We look for the deals. But if I really want to treat myself, I buy a huge tub of my favorite: Tillamook Rocky Road ice cream, made in Oregon. Sometimes it’s on sale, but generally a ½ gallon of Tillamook Rocky Road costs $7.99 at Seamart and $7.79 at AC Lakeside in Sitka. But what does it cost down south?  

I called my mom in Berkeley, California. The price? $4.99. Moving North, I called a grocery store in Tillamook, Oregon, the ice cream’s origin city. $4.99. Further north still, I got the lowest price from a familiar voice in Washington state.

“This is Ed Ronco, and I am at a Safeway in Centralia Washington, about an hour and a half south of Seattle. Ah, let me open up the case here.”

The case creaks as he opens it and peers inside.

“There it is. It is $5.99 per container UNLESS you’re part of that saver club that a lot of supermarkets have, and then it’s 3.99 for a container.”

$3.99 is the regular price as long as you’re a member of the grocery store’s super savers club. That’s half of what it costs in Sitka. So why is the price of an Oregon made product nearly double in Sitka what it costs in the lower 48?

“Doing business on an island when you’re 850 miles away from a wholesaler, that’s a big deal,” says Roger Hames. He’s the Chairman and CEO of the Hames Corporation, the third generation of leadership for the family grocery business. They operate Seamart, one of two large grocery stores in Sitka. The other is AC Lakeside. Hames says he doesn’t want to put all the onus of price on the freight, but shipping costs play a key role in determining where grocers set the price of an item.

“You’re paying for, most of the time, the pallets, the cardboard, the cans,” Hames says. “It’s all heavy.”

Most of Sitka’s groceries come in on the barge through a north/south route from Seattle to Ketchikan, and then Petersburg. Sitka is not visited by the mainliner for incoming freight, so all its goods are brought by an extra shuttle barge twice a week from Petersburg.

“That extra barge that Alaska Marine Lines runs year round as a second barge is costly to us,” says Hames. “Freight adds 10 and 11% of our grocery products- is freight, is a freight factor. That has to be passed onto the consumer. We can’t absorb something like that.”

Everything arrives on that barge, including my favorite ice cream.

Then it’s transported to SeaMart and AC Lakeside by truck. Then onto the shelves where grocers set retail price. Hames says that is not a static process.

“Tillamook Rocky Road ice cream is X, and of that cost, 14.7 percent of that cost is freight,” Hames says.

So, freight is key. But what other factors might determine an item’s cost to the grocer and subsequently the price for the consumer?

“I grew up in Northern California in Sonoma County. Started as a bagger for a family owned store. Worked with some great people, so I kind of stuck with it,” says Greg Dahl. He’s been working in grocery stores his whole life. The manager at AC Lakeside, he says every single ingredient in a half gallon of ice cream could impact its price.

“To make ice cream you got milk, cream, sugar, eggs are in there. Just an egg can cost more because of people’s eating habits halfway across the globe.”

And while the global food market plays a huge role in what shows up on Sitka’s shelves, Dahl says cost drivers at the local level are absorbed by the grocery stores too.

“There’s taxes and card fees and electricity and payroll. There’s all sorts of things we have to pay for here in Sitka to run a business,” Dahl says. “Since February this store has spent an extra $12,000 or $13,000 just on electricity – on top of what we usually pay – because of the rate increase. That’s a lot of money. Margins are pretty thin in the grocery business, so that $12,000 really takes a toll.”

With the most recent electric rate increase, both Seamart and Lakeside absorbed the added cost and did not pass it on to consumers. Both Hames and Dahl said keeping prices fair was important to them, not only to stay competitive, but also for the well-being of the community. And Dahl says it’s tough, as the last in a long line of players that determine the cost of food. To the consumers, the grocers are the face of rising prices. People always have to buy food. When they see the costs go up on their local shelves, they start to wonder why.

“Profiteering in Sitka? That’s not happening. There is competition here, not only between the two main stores, but also Juneau. We have Costco and Fred Meyers there. So we can’t be totally out of the ballpark in prices here in Sitka,” Dahl says. “Because people have that option to out-shop. And of course there’s online marketplaces, like Amazon.”

Well, this is almost true. Amazon Prime does not protect ice cream from melting. I guess I’ll have to keep getting my fix locally. But the next time I dig into a pint of rocky road, I think I’ll give a bit more consideration to the marshmallow and the nuts. Where did they come from? What factors drove the cost? And should I really be eating this entire half gallon by myself?