Ohio University’s markets tout convenience when it comes to their proximity to student dorms, but some of the wares the on-campus stores are peddling empty students’ pockets much more quickly than a trip to the grocery store.
The Nelson, Jefferson and Boyd campus markets provide students with varying inventories and multiple ways to pay for products a short walk from their dorm room.
However, OU charges higher prices than private-sector businesses — Wal-Mart, 929 E. State St.; Kroger, 919 E. State St.; and Seaman’s, 305 W. Union St. — without paying private-sector costs.
For instance, one serving of chicken-flavored Ramen noodles costs $0.75 at Nelson Market, $0.40 at Kroger and $0.44 at Wal-Mart. A large bag of Doritos costs $4.29 at Nelson Market, $3.29 at Kroger and $2.68 at Wal-Mart.
OU markets, in total, profited in fiscal years 2011 and 2012, according to Culinary Services data.
During the 2010-2011 academic year, Culinary Services budgeted $7,116,632.63 for Campus Markets and ended the year with $1,347,142.42 in revenue, an 18.9 percent profit.
In 2011–12 academic year, $8,172,096 was budgeted for markets, an increase of 14.8 percent over 2010–11, and the markets had $237,750.53 left over at the end of the year, a 3 percent profit.
OU’s markets are considered part of the overall Culinary Services budget, and therefore, any profit they generate or lose is compensated for elsewhere in the budget, said Gwyn Scott, associate vice president of Auxiliaries.
Scott also added that market profits are reinvested in other areas of the Culinary Services budget, such as renovating the dining halls on campus.
Auxiliaries at OU must remain “revenue neutral,” Scott said, meaning its operations cannot perform at a loss, and that under this business model, the markets can’t take a loss overall.
“The markets generate a positive bottom line, but they don’t generate profit,” Scott said. “They’re part of the big picture, and all of the costs that a market generates are not held against their unit.”
The markets have other costs associated with their functioning that are only reflected in the overall Culinary Services budget, she added.
Culinary Services decides each summer how much to budget per market, projecting costs and revenues for the coming year. Any profits or losses the markets incur stay within the Culinary Services budget and do not go to OU’s general fund, Scott said.
According to the data, Culinary Services cut more than $230,000 from its budget for Boyd Market this year compared to last year.
Mixed results concerning profit, though, do not assuage some from believing the markets should be charging the lowest prices in Athens.
“The university has an advantage over the private providers because of the tax advantage,” said Richard Vedder, an economics professor. “Things are severely stacked against the private operators and in the favor of the university so (the markets) should be lower priced.”
Vedder cited the fact that though the markets pay sales tax, they do not have property and income tax costs or other costs, such as rent, associated with their business, all of which private sector businesses have to pay for with their revenues.
Despite tax advantages, OU’s markets charge prices that are higher on average compared to those of Wal-Mart, Kroger and Seaman’s, according to Culinary Service’s spring price comparison study.
“I feel that our prices are better than the on-campus stores,” said J. Seaman, co-owner of Seaman’s. “The convenience of the on-campus markets for customers without cars or limited transportation is difficult to overcome.”
Though students are not a large portion of Seaman’s business, he said he still believes his prices are competitive with all local stores while offering the best quality in Athens.
Scott said the markets do not have the buying power of larger stores, which can contribute to higher prices.
“We are part of making OU an exceptional experience,” Scott said. “Price is something that is easy to have issue with. Everybody wants it for less than they have to pay for.”
Anthony Pruni, an East Green student senator and sophomore studying political science, believes that even though the campus markets are a convenient option for students, a conversation needs to happen about letting students use their meal plans off-campus to save students money.
“The markets are great, but they have limited hours, and when everything closes, there are students up well beyond that point,” Pruni said. “Students want to branch out. The biggest thing students want is to use their meal plans off-campus.”
dd195710@ohiou.edu
