01
Tax Mechanism
800%+
Increase in the tax rate on grocery and retail businesses
25%
Profit lost for grocery and retail businesses in San Francisco
How Does Prop D Work?
Grocery stores already spend almost every dollar they bring in just to keep the business running. An 800% increase in this tax is a major new cost many stores can't afford to absorb.
Prop D makes Safeway unprofitable in San Francisco
If Prop D had been in effect in 2025, Safeway’s 13 San Francisco stores would have owed roughly $4.1M on an estimated $1.4M in local profit, turning profitable neighborhood grocery stores into unprofitable ones.
Looking at the FY2025 SEC filing for Safeway’s parent company, Albertsons, we can see Albertsons reported a company-wide net profit margin of just 0.26%. This means for every dollar someone spends at Safeway, the company keeps about a quarter of a penny.
Based on Albertsons’ company-wide averages and adjusting upward for urban store volumes, those 13 locations likely generate somewhere around $500 to $650 million in annual revenue. At the company’s razor-thin margin, that translates to roughly $1.4 million in profit from SF operations.
How we estimated this
Albertsons does not disclose city-level revenue. SF revenue is estimated from 13 stores at an assumed $40–$50M per store (above the $36.7M national average, adjusted for urban pricing and volume). Profit is estimated using the company-wide 0.26% net margin. Individual store profitability may vary.
Safeway’s estimated SF revenue
~$550M
Est. from Albertsons FY2025 10-K
In Albertsons’ most recent SEC proxy filing for fiscal year 2024, then-CEO Vivek Sankaran received $15.2 million in total compensation. The median Albertsons employee, a full-time hourly worker, earned $32,057 per year, creating a CEO-to-worker pay ratio of 475:1.
At 475:1, Safeway falls into Prop D’s 400× to 500× bracket, triggering a gross receipts tax rate of 0.748%on San Francisco revenue, up from the current 0.080%. Because Prop D taxes total sales revenue rather than profit, Safeway would owe an estimated $4.1 millionin Prop D taxes on its 13 San Francisco stores, despite earning only about $1.4 millionin estimated SF profit today. Under Prop D, those stores would operate at an estimated $2.7 million annual loss.
Note on proxy
We use the 2025 proxy statement, which covers fiscal year 2024, because it is the most recent proxy filing currently available. The 2026 proxy statement has not yet been filed and will be the first to include Susan Morris’s full-year CEO compensation and updated pay ratio.
$4.1M estimated Prop D tax on Safeway’s 13 SF stores
Prop D taxes on Safeway’s SF stores are estimated to exceed current SF profit by roughly 3×.
See how Prop D hits real companies
Amazon, Google, Meta, and Tesla all fall below the 100:1 pay ratio threshold and would pay nothing under Prop D. Prop D’s pay-ratio formula rewards the compensation strategies of the ultra-wealthy (stock ownership, $0 salaries, one-time grants) while penalizing the business models that employ large workforces of hourly, minimum-wage, and part-time workers. The companies that get taxed hardest aren’t those with the most egregious CEO pay. They’re retail and food service employers whose high ratios are driven by large part-time workforces with low median pay, not by unusually excessive executive compensation. Many of these are the grocery stores, restaurants, and pharmacies where San Franciscans buy everyday essentials.
The tax is blind to a company’s ability to pay. It hits a grocery chain running on a 0.3% profit margin at the same rate as a tech giant with a 33% margin. For low-margin retailers and grocers, that incremental tax can consume a disproportionate share of already-thin profits, creating pressure to cut labor costs or raise prices, costs ultimately borne by San Francisco consumers and workers.
Select a company below to see how much Prop D would reduce their estimated profit from San Francisco operations.
Select a business type
Select a company
Key report finding
Grocery and retail stores are hit harder because Prop D taxes every dollar sold, while these businesses keep only a few cents in profit from each purchase.
So what happens next?
Grocery stores operate on an average of 1.3% profit margins. An ~800% increase in this tax doesn’t leave room for absorbing the cost. Stores are forced to respond: either by passing costs to customers, or by cutting back on operations. Both paths lead to harm.
Path 1
They raise prices
24–40% of Prop D costs are passed on to San Franciscans through higher everyday prices
3–4× lower-income families are hit harder by Prop D than wealthy households
Path 2
They cut costs and downsize
1,500 San Francisco businesses at risk of downsizing or leaving because of Prop D
7× wage losses in retail compared to the SF economy-wide average