Paying the Price

When sophomore Elliott Robinson moved into Eigenmann Hall last year, he was thrilled to find a campus convenience store located in his building's foyer. He was startled, however, when he perused the receipt from his first foray into C-store shopping. \nThat bag of beef jerky he'd been coveting? \nEight dollars.\nHad Robinson sauntered across the street to the Village Pantry at the corner of Tenth and Union streets, he would have found the same product for two dollars less. In fact, he likely would have found a number of products -- ranging from batteries to Pringles to maple syrup -- for at least a fraction less than the C-store. The only drawback is not being able to use his campus access card and meal plan to buy the goods.\nRobinson's concern is one widely shared by many undergraduates living in on-campus housing, and it's not a new issue. Debate over products sold at campus outlets is ongoing and has been for several years. Sandra Fowler is used to student dissent over seemingly sky-high prices in campus convenience stores.\nAs director of dining services for Residential Programs and Services, she's dealt with public concern over C-store prices, which at times is double those of local chains, such as the Village Pantry and Kroger, for years. She meets routinely with the campus Meal Plan Committee, consisting of the six presidents of IU residence centers, six dining administrators and one student at large -- a task she says she "truly enjoys." \nFowler said the reason University prices are often substantially higher than those of other convenience stores and chains like Wal-Mart and Kroger boils down to buying power: the University -- which caters to thousands of local consumers as opposed to the millions served by nationwide chains -- can't buy items in bulk to the same capacity as their "competitors."\n"When the VPs and the Wal-Marts buy products, they're buying for the entire Midwest region," Residence Halls Association Vice President of Student Affairs Jonathon Greene said. "Vendors charge a higher price because we're not buying in a volume comparable to that of Wal-Mart or Marsh."\nTo help students and parents grasp the cost breakdown of where each penny of their food dollars goes, RPS issued a brochure last year breaking the total cost into percentages on a "pie" chart.\nAccording to the brochure, 39 percent of total revenue goes toward purchasing food wholesale. Thirty-three percent covers labor costs, while 13 percent contributes to "administrative overhead." Repair and maintenance accounts for 6 percent of the total budget, and 5 percent is shelved away in a reserve fund for future repairs and renovations. The remaining 4 percent accounts for paper and cleaning supplies and miscellaneous needs. \n"We have to include in the cost of every item enough to cover all of these other costs," Fowler said. "Many retail establishments don't have to cover all these other costs. We're not for profit -- we're for break even."\nRPS currently operates on an approximately $20 million budget, the bulk of which is garnered specifically from the 9,000 to 10,000 students typically living in the dorms each year. \nGreene stressed that RPS is a non-profit organization, which means the budget must balance at the beginning and end of each fiscal year. Greene, who also chairs the RPS/RHA Meal Plan Committee, said while there may be ways to tweak the pricing structure, the resulting changes would likely cause just as many concerns as current meal plans. \n"There are two ways RPS makes money -- from students paying for their rooms and from the meal plans," Greene said. "There are a lot of costs behind the scenes that students don't realize."\nThose costs include paying janitorial staff, residential assistants, residence hall managers and C-store employees.\nFowler agreed.\n"The only money we have is what students pay to live here," she said.\nGreene said he understands the student position. He's had experience on the Meal Plan Committee since his freshman year, when he sat in as a proxy. As a sophomore, he served as president of Wright Quad and said roughly 10 percent of his residents complained about C-store prices.\n"They'd say RPS had freshmen living in the dorms as a captive audience and thus could charge outrageous prices," he said. "But after working with the Meal Plan Committee, I realized the prices are set by who we get the food from."\nRunning out of meal points is a problem students often encounter as a result of high prices. Sophomore Lizzie Oldberg lived in McNutt Center last year and said she ran out of meal points before the end of the spring semester, forcing her father to add points to her Campus Access card every few weeks.\n"I tried to eat well during my freshman year, but all of the healthy foods -- the vegetables, the fruit, the sandwiches -- were high-priced," Oldberg said. "Before the year was over, I was out of meal points. It's like you're sacrificing health for meal points."\nFowler claims RPS tries to keep "staple" items like milk and bread stabilized at comparatively lower costs than other C-store items. Because these are products many students buy on a regular basis, IU is able to buy them in bulk.\nGreene said the prices of many such staples aren't increased at all, but he could not speak as to which, saying he "didn't get to look at the price sheet too often."\nOldberg feels this wasn't true, however.\n"I feel like any food or drink students were eating every day were of a higher price than they should have been," she said.\nA cost comparison of IU to other Big Ten universities revealed that RPS prices are the third lowest in the system, however. Furthermore, the IU structure features food court-style dining in addition to the traditional option favored at most Big Ten institutions.\nIU made the move to expanded dining options in 1996, and convenience stores hit in 1999, making IU the only Big Ten university offering C-store plans. The new options allowed students to use meal points at places like McDonald's, Chester Fried Chicken and Sbarro.\nThe University maintains a contract with all franchises contained in residence hall food courts. McDonald's, for example, receives all funds garnered from meal point purchases and then pays a commission percentage of those proceeds back to RPS. Taco John's and Sbarro maintain a licensing agreement with RPS, which ends up being more profitable for the University on average. Under this agreement, RPS trains the franchises to operate according to RPS standards, and all money goes directly to RPS. The department then pays a commission to the franchise.\nFowler stressed that the meal plan prices themselves have not increased over the past five years. When IU operated a strictly traditional dining structure in which students had the option of eating a certain number of meals per week and any money left unused was discarded, meal participation by students was 55 percent. Approximately 99 percent of all meal points are spent with the current extended options plan, she said.\nHowever, "we'll be the first to acknowledge that many products are expensive" at C-stores, Fowler said.\n"We realize, frankly, that there are items in the C-stores that students could get cheaper elsewhere," she said. "Items that aren't marked up as much mean we could get a better cost on them, and that depends on the manufacturers."\nRobinson said he definitely would have considered living in the dorms another year if prices were lowered in C-stores and food courts. Robinson currently rents a house off-campus and buys most of his groceries at Kroger.\n"I liked dorm life, but in college, money is so important," Robinson said. "If you have no money, you have no weekend. I think they know that because we have meal plans, they can rip us off a little bit."\n-- Contact senior writer Holly Johnson at hljohnso@indiana.edu.