Cross-posted at the Writing on the Wal.
Many thanks to Damien Sullivan for directing me to this study by Zenith Management Consulting (.pdf) on Wal-Mart's not-so-low-prices. The key concept any Wal-Mart shopper needs to understand is the "opening price point," which Zenith defines as:
a very low-priced high velocity item placed in a highly visible spot in each store section. This creates a perception that since the first item is so very low-priced, the other items in the section are as well.
In fact, Zenith found:
Comparisons of the price of the other items in each section found that only 15% to 20% of the items Wal-Mart sells are actually priced lower than competing retailers. 80% to 85% of the items Wal-Mart sells are more expensive than other retailers. This is Wal-Mart's "price spin" - creating a strong perception of lower prices.
Don't believe it, Wal-Mart shoppers? You're not supposed to, but Zenith has done their homework on this one:
We did nearly half a million price checks in 300 Wal-Mart, Target, Kmart, and national chain grocery and drug stores to find out who really has lower prices.
Let's see some TV station do that! Really, I've been blogging about Wal-Mart's prices for over two years now and this is by far the best study on the subject I've seen. Here's how I ended one of those posts in March 2005:
If you think you save money going there regularly, Wal-Mart is playing you for a fool. There is no good reason to shop at Wal-Mart except that you have absolutely no other choice. . . .
PS While we're at it, there's no such thing as the Easter Bunny, you don't get all "A"s if your roommate commits suicide and there were no weapons of mass destruction.
That all still holds true today.
JR
