Does the absolute lowest price win?

[DollDoctor]

I recently read a fascinating (and depressing) book called "Big Box Swindle" about how big box stores like Walmart, Target etc. are even more evil than you already thought they were.

One interesting thing was about how Wal-Mart (and other stores) use a pricing strategy called "Signposts and blinds." The "signposts" are those items that they figure most people know the price of, like a gallon of milk, loaf of bread, package of lightbulbs, etc. The store prices those items really low, in many cases below cost. These items represent about 5% of the store. The rest of the stuff in the store are the "blinds" and these are the items they make their money on. In many cases these items will be priced higher than the local independent merchants (if you have any of those left in your town.) But you walk into the store and say "wow, cheap milk, cheap bread, cheap lightbulbs" and it gives you the impression that everything in the store is less expensive, which is actually not the case. It's all psychology. And the fact that their marketing keeps repeating the phrase "low prices" adds to the illusion.

Food for thought.

 

[Denim Deb]

And that's why it's important to know your prices. There's a town I like to shop in near here. It has 2 super markets, an Aldais, a Big Lots and a Wal-Mart, all w/in a mile of each other. I'll start at the store that's the farthest from my house, and work my way forward. The last store, Wal-Mart, is right by the road I have to turn down to go home. And, this town is no farther away than any of the other places I can shop.

 

[Marianne]

I recently read a fascinating (and depressing) book called "Big Box Swindle" about how big box stores like Walmart, Target etc. are even more evil than you already thought they were.

One interesting thing was about how Wal-Mart (and other stores) use a pricing strategy called "Signposts and blinds." The "signposts" are those items that they figure most people know the price of, like a gallon of milk, loaf of bread, package of lightbulbs, etc. The store prices those items really low, in many cases below cost. These items represent about 5% of the store. The rest of the stuff in the store are the "blinds" and these are the items they make their money on. In many cases these items will be priced higher than the local independent merchants (if you have any of those left in your town.) But you walk into the store and say "wow, cheap milk, cheap bread, cheap lightbulbs" and it gives you the impression that everything in the store is less expensive, which is actually not the case. It's all psychology. And the fact that their marketing keeps repeating the phrase "low prices" adds to the illusion.

Food for thought.

I worked for a couple of food brokers years ago, my job was to represent different manufacturers and go from one grocery store to another, etc, over and over..for 10 years. I hate shopping.

Anyway, what you're describing is 'loss leaders' and every grocery store/chain has them, not just the big box stores. The stores aren't losing money, it's a money saving deal passed on to them from the manufacturers.

The big box stores actually screw the manufacturers. Walmart threw out Pepsi products for a brief period years ago as PepsiCo refused to lower their product cost as much as Walmart demanded. With the volume of business that Walmart has globally, that amounted to a HUGE loss for PepsiCo and they got in line pretty fast.

On the other hand, Walmart was instrumental in getting packaging reduced on items such as laundry detergent, etc. Less water added (now everyone has concentrates), so smaller packaging, more items per pallet, less shipping costs per item = better value for consumer. They say.

Again, because of the volume/buying power, they can often sell some items cheaper than what our local grocery stores can buy them. Does that make them evil? Not necessarily, in my book. I don't focus on not buying at Walmart, I focus on not buying from Proctor and Gamble, etc. and plain 'not buying' - I can live without it. But it's a choice for me to shop locally. I want that little store to stay in business. If they close, I'll have a long way to drive to get provisions.

The Walmart in our area hires people that other places wouldn't hire, employs people with enough work hours and offers health insurance. Sure beats many other places that cut work hours down so they didn't have to pay benefits.

Oh, BTW, costs of changing moulds for packaging runs in the $25K range per mould.

(I'm trying to forget all this crap, but it keeps resurfacing!!)