A recent post by Myscha Theriault at the personal finance blog Wisebread.com got me thinking about our “friendly” local grocery stores.
In the article she discusses things that frustrate us all about our local supermarket. Particularly how supermarkets will:
Dramatically increase the price on a favorite item.
Change the location of an item in the supermarket so it becomes difficult to find.
Stop carrying some of your favorite items for seemingly no reason at all.
I can totally relate to this article because I’ve had the very same gripes on several of my shopping trips.
The simple fact is that supermarkets really have no interest in making our lives more convenient.
Yeah they say they do. They advertise their friendly atmosphere, vast product selection, and super low prices. But the real truth of the matter is that your friendly supermarket is a big business whose sole existence for being is to make a profit, not to make our lives any easier.
In fact, your convenience gets in the way of their profits. Making things more convenient for the shopper directly interferes with them making more money.
Let me explain.
If your grocery store was truly concerned with making things more convenient for you they would place the basic staple items you need closer to the entrance.
This convenience would allow us to quickly grab what we needed and go. But how many times have you gone into the store for a quick trip to buy some butter or bag of sugar and come out with a cart full of groceries?
Supermarkets purposefully place the essential staples not at the front of the store, but far in the back. As a result, we pass through row upon row of edible temptations. In fact, nearly 40% to 50% of all of our purchases inside the store are impulse purchases!
If your supermarket made it convenient for you by placing all of the staples at the front of the store, they would lose all the profit they collect as you make your way to the back to purchase your essential items.
If your grocery store was truly concerned with making things more convenient for you they would place the items we use together near each other.
Why are the hot dogs on one end of the store and hot dog buns on the other end, the salad greens in one place while the the salad dressing sits in another?
Well it again relates to the issue above. By making us travel across the store to get the buns for our hot dogs we’re more inclined to make impulse purchases, spend more money, and increase the store’s profits.
If your grocery store was truly concerned with making things more convenient for you they would keep sales items in stock.
Lets consider the super cheap “loss leaders” that supermarkets use to lure us into the store. The simple fact is that if you don’t get to the store during the first two days of the sale the sale items are frequently out of stock. But to make it convenient for us by keeping store shelves fully stocked of sale items would cost the supermarket profits.
Many of these super cheap sales items are sold at a loss to the supermarket (ie the term “loss leader”). Their only purpose is to lure you into the store. Once a customer is in the store there is not much of an incentive to stock a product the store loses money on.
If your grocery store was truly concerned with making things more convenient for you they would keep check out lines short.
Long check-out lines. Why does it seem that grocery stores have some magical formula where the number of check-out lanes left open is directly proportional to the number of people in the store so that even at 11pm we are kept waiting in a check-out line?
Simply put, long check-out lines create a captive audience more likely to purchase that candy bar, bag of chips, or magazine sitting right in front of us. In fact, per square foot, the check-out area is one of the most profitable locations in the entire store!
If your grocery store was truly concerned with making things more convenient for you they would keep sale prices simple.
As I mentioned in my last post, supermarkets make sale pricing unnecessarily complicated – 3 for $7, buy 2 get 1 free, 4 for $7. Determining the individual price of a sale item is like taking a 5th grade math test.
Grocery stores have discovered that we simply spend more when prices are advertised this way. With a 3 for $7 sale, for instance, its often easier for us to just place 3 items in our shopping basket than divide 7 by 3 to determine the individual price of a sales item.
They don’t want you to easily figure out the sale prices of individual items … you might realize you’re not getting a great deal after all.
The take home lesson: Supermarkets are in the business of making money. Making things more convenient for us costs them potential profits. And let me be clear there is nothing wrong with a business wanting to make money. We live in a capitalist society.
The key is for us to realize this so that we keep more money in our pockets. By understanding supermarket tricks and tactics we simply save more.
Update: We’d like to thank Counting My Pennies for including this article in the Carnival of Pecuniary Delights personal finance blog carnival.