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Tuesday, June 23, 2009

Marketing at the SuperMarket

Many smart shoppers already know that grocery stores will feature sale items at a great price to get us into their respective store. These are called loss leaders. It is an example of a marketing in the grocery shopping business. And it is not the only one. But where a loss leader can save you money, the ones below will cost you more.

Items displayed on an end cap are NOT necessarily a sale item. This is called a Phantom sale. Manufacturers have a deal with grocery stores to feature their products prominently within the store, even if the items are not at their lowest price points. For example, Chips Ahoy! Cookies 16 oz are about $3.79 everyday price. A phantom price sales price of $2.99 will be featured on an end cap. But a Penny Pincher knows better! Wait a few weeks during the 12 week grocery sale cycle and the cookies will be on sale for $1.88 or $1.67 (3 for $5). How do I know this price point? I have access to a comprehensive pricebook from PYP and so do you! Check it out here.

Higher Priced Items are Placed at Eye Level. This is a general rule. To save money, get in the habit of scanning the tops and bottom rows of shelves. Be sure to use the Unit Price of items to maximize savings. See the shelf price tag- a unit price should be listed here, next to the item's cost. And watch your kids views, too. Higher priced items that will appeal to them are placed at their eye level.

Higher priced items are found in the middle of the store. Instead, shop the perimeters of the store. The perimeter is where you will find the fresher cuts of meat, bakery and produce. In the center aisles, one will find the processed and convenience packaged food items. Also, don’t pay for the convenience of pre-cut or pre-packaged items. TipHero has a great study where they discovered it costs $43/hr to have someone cut fresh fruit in those convenient bowls based upon $2.67/lb. Check it out! Very enlightening.

Bulk Items are Not Necessarily Money Saving Items, Anymore. Once Upon a Time, buying in bulk equaled savings. But manufacturers and retailers caught onto this and started offering larger sized packaged items at higher prices. Many times it is cheaper to buy the smaller packaged item on sale. To maximize savings, use a coupon.

You Don’t Have to Play the Numbers Game. Grocery Stores will use marketing ploys like “Get 10 for $10” and they sound appealing. However, you don’t have to buy 10 items. Before you do, ask yourself, “How many do I need in my food storage until the next sales cycle has this item at its lowest price point again?”

Using these tips will help you lower your overall grocery bill and pinch those pennies til they scream!


Anonymous said...

I never avoid these "loss" leaders. I don't understand why anyone would unless the price or gas to get to the grocery store and back is prohibitive. I am very blessed to live within 5 miles of over 7 grocery stores and so I have no problem going to a store buying their "loss leader" with a coupon and that's it. I would never avoid these items. I don't know who would.

Darla of SnellvilleShops said...

The key is to get in and get ONLY the "loss leaders," to buy ahead at the lowest price. If you buy other items, then you will pay more for them and that negates the savings. I think that's what was meant to be said in this article. I think a line of text could be missing.

That the end-of-aisle items are not necessarily a sale price is absolutely true. Very often, if you find yourself tempted to get something off an end cap, check out the other items of the same kind in the regular section. You will find more varieties, often healthier options that are also cheaper than the end of aisle "bargain."

The retailers do get money from the manufacturer's for the featured space. The retailer doesn't even have to worry if those items actually sell in that spot, they make guaranteed income from the manufacturers. It's sort of like advertising space.

Anonymous said...

My apologies to anonymous and everyone else. I posted my 2nd draft, NOT my final one. I have fixed my error. And thank you to Darla! You are correct. Loss leaders are always a good idea and I meant to contrast that.

Anonymous said...
This comment has been removed by the author.
joelevi said...

While you're correct MOST of the time regarding the "2 for $5" gimmack, recently I've seen more and more merchants throw in a "or one at regular price" or "less at regular price".

So if you DON'T get the full amount, you're not getting the savings.

It's not ALWAYS that way, but it's worth the extra 10-seconds to find out.

Just my two bits.



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