In the past few years, I’ve taught hundreds of workshops, all geared towards helping families become more financially stable with sensible spending techniques. These workshops are not geared towards minimalism, but towards helping the average family spend less of their income without sacrificing a single purchase- in many instances, making more purchases while still spending substantially less than before.
One of the biggest hurdles for students to overcome is the idea that big box stores provide the highest discounts. Many of these stores have recently admitted that they have changed their pricing models, all the while taking advantage of the customers that were lured in by their original low pricing structure. In fact, in the Ultimate Couponing workshop, we not only go over couponing, but where to find name brand products for less than big box stores. One of the biggest compliments we hear from workshop attendees is not the amount of money they are saving with coupons, but that they have actually regained a portion of their life that had been dedicated towards the supercenters.
What makes shoppers shop at big box stores?
1. Convenience. When someone tells me that shopping at a big box store is ‘convenient’, I want to scream. How is a store filled with screaming children, high prices, a packed parking lot, bumper to bumper foot traffic, and 30 minute checkout lines convenient? Especially when there is a Dollar General, Dollar Tree, Family Dollar, and a couple of grocery stores on the same city block?
2. Low Prices. Walmart stores opened under the ‘Always Low Prices’ logo. News flash! Have you noticed that their logo is no longer ‘Always Low Prices’?
To jump-start lethargic growth and counter the rise of competitors such as cheap-chic rival Target Corp., executives veered away from the winning formula of late founder Sam Walton to provide "every day low prices" to the American working class. Wal-Mart, the world’s biggest retailer by sales, instead raised prices on some items while promoting deals on others.
Read more: http://www.foxnews.com/us/2011/02/22/wal-mart-grapples-worst-sales-slump/#ixzz1QozRYA9c
What does this mean? Close your eyes and think back to the last time you walked into the store. You’re walking along, checking items off of your list and BAM! you run into a product display (that is purposely situated to make you stop and look at it) of spaghetti sauce, priced at just $1 a jar. While spaghetti sauce is not on your grocery list, you marvel at the price. You think to yourself, ‘Spaghetti sounds good, this is a great price. I’m going to grab a couple for dinner next week, even if it’s not on my list’. After throwing delicately placing these jars in your cart, you head off in search of pasta, parmesan cheese, frozen garlic bread, and salad dressing. You are still in shock over finding such a great price on the spaghetti sauce that you fail to notice that the price of these other items has risen. Why did they raise? Because the store was able to lure you in with this low price and with the new ‘basket pricing’ method, they are able to charge much more for some items, while taking a loss on just one.
Overcoming The Stigma
The problem? Shoppers still believe they have the lowest prices. Some of these shoppers haven’t set foot in another store in years. Others are looking at a handful of items at a grocer and realizing that yes, some prices at the grocer are higher.
One of the exercises in the Ultimate Couponing workshop asks shoppers to take a list of the items they buy the most and price them at a big box store, their local grocer, and a dollar store. The best prices can be found with a combination of the grocer and dollar store. In my area, the same package of Charmin toilet paper that is $4.99 or less, regular price, at the grocery store, runs from $14-$18 at Walmart? Many personal care items, household items, and even pet supplies can be found for less at the grocery- and don’t forget gift bags, over-the-counter medicines, cosmetics, and greeting cards, either. Have you ever noticed that their ads come out monthly and they NEVER put items on sale, unless another stores has done so? Why do you think that is? Because they don’t have to! You’re going there anyways, there’s no need to lure you in.
Big box stores make the majority of their profits on impulse purchases. These stores rely on flooding the shoppers brains with sensory overload. For argument’s sake, let’s say that your list is $10 cheaper at the big box store than the grocery. Hey, that’s $10, right? Not so fast.. when in a big box store, do you really stop at the items that are on your list? If you do, kudos, as you are a very disciplined shopper. For the rest of the world (myself included), that $10 can quickly escalate to $20, $40, or even $100.
Here’s a question for you: If you’re out of milk, where are you going to stop at to pick up a gallon? I’ve asked this to thousands of students, and over 90% of the time, the answer is… you guessed it, Walmart. Did you know that their milk is 50¢-$1.00 per gallon HIGHER than any of the other stores? EVEN the gas station! And just how long does it take you to spend that extra buck? About 30 minutes before it’s all said and done. And do you just stop at the milk? Doubt it! Do you enjoy going there? Probably not.
A Genuine Reader Dilemna- What about those items that are cheaper?
A former student approached me recently to tell me that she was still having problems saving money, after taking nearly the full lineup of Gateway to Saving workshops.
She is trying to live on a tighter budget, due to the instability of her husband’s job, while working part-time. This is an extremely responsible move, as she is socking away his income into savings and attempting to make ends meet with just hers.
She has been very successful with her couponing, shopping the sales, stocking up on items, and spending much less than before. Sounds great, right? Well, she had a slight problem. You see, there is a handful of items on her list that are cheaper at the big box store. However, when she would make the trip after them, $10 worth of items would quickly escalate into $40. If she were doing this just once a week, that’s $160 a month!
“The problem is, that I buy things that I will actually use. I can justify all of my purchases when I make them. I’m not buying friviolous items.” she said. “But when I get home, I realize that they weren’t an immediate need, nor a necessary item.”
What did I tell her? That sometimes it will actually save you more to spend more. By spending an extra $10 on those items elsewhere, she can eliminate the additional $30 she spends while saving. Even though she has product to back up each dollar spent, her wallet is lighter, and light wallets STINK!
Are you falling into the same trap? Here’s my solution. When you get home from that trip, put away perishable items and leave the rest in the sack- either in your car, closet, or somewhere out of sight. The next day, before you retrieve the bags, grab a pen and paper and try to write down everything you purchased. If you struggle, and you will, jump in the car and return them.
Walmart is Set to Open Neighborhood Market Stores in Springfield
In Springfield, Walmart has recently announced that they are opening two new ‘Neighborhood Markets’. A Neighborhood Market is Walmart’s attempt at a smaller-scale version that focuses mainly on grocery items. Wait- wasn’t it just a few short years ago that they decided to close nearly every small store in the chain and turn them into a Supercenter?
The most serious competitor to Wal-Mart is turning out to be dollar stores. Analysts quoted in a Wall Street Journal article believe at least some of the chain’s woes can be laid at the feet of the dollar store segment. They’re like flies buzzing around the great lion: small, agile and too numerous to swat. ……
Dollar stores aren’t a new threat to Wal-Mart. They’ve been steadily building their presence for as long as Wal-Mart has been building supercenters. It’s an open secret that one of the early strategies used by dollar stores was to open right in the shadow of the looming Wal-Marts, with the goal of siphoning customers who wanted low prices but not the crowd or the hassle of navigating a huge store.
Switching away from Everyday Low Pricing, implementing the ill-conceived “Win-Place-Show” merchandising strategy, over-rationalizing SKUs in the “Project Impact” plan, and related moves over the past few years, have put a dent in the retailer’s armor.
Read more of this article here: http://whrefresh.com/2011/02/22/wal-mart-earnings-reveal-weaknesses/
While a Neighborhood Market is designed with much less stimuli, leading to less impulse purchases, it still isn’t good for local business or consumers. It saddens me to see that one of the locations chosen is directly across from Smillie’s, a staple in Springfield’s history.
Not to worry, if you’re a fan of one of the big box stores, you can still save. By knowing your prices and avoiding impulse purchases, savings can be tremendous, but for many of us, it’s difficult to change the way we process information.
Stores such as Walmart and Target offer pricematching. This simply means that they will match any competitors advertised price. Walmart has a much simpler pricematching policy, all you need to do is take the ads (now, their policy says they don’t even need those) from the other store through the checkout with you and you’ll receive the discounted price when you show the cashier the ad. Target requires you to pay for all of your merchandise up front and take your receipt and ads to Guest Services to receive adjustment. Both of these stores have exclusions, make sure to read and print their pricematching policies. Take these with you in case any questions arise.
To save any money at all, regardless of your store of preference, you’ve got to know the prices of the items you use, both at your frequented stores and their competition. If you’re taking a store’s word for it, you’re probably missing out on some great deals and a whole lot of extra cash!
The opinions expressed in this article are strictly my own and are only intended to provide readers my personal views, supported by published facts. This article was not written with foul intentions, but to raise awareness on pricing structures and sensible shopping strategies. For more information on these marketing trends, please click on the links provided throughout this article.
I would LOVE your input on this article! If you have any comments related to the article or any experiences you’d like to share, please use the comment form below.
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{ 7 comments… read them below or add one }
I generally avoid Walmart, but family tends to send me gift cards. I just got a flier this week that said several stores in the area just added an Appliance Market. It looks kind of fancy with shiny new refrigerators, stoves, etc! Are they trying to compete with Sears??
I hadn’t yet heard of that, but I wouldn’t doubt it!
Did you know that you can use those gift cards to purchase other gift cards or even prepaid cash cards? Just pick one up in the checkout line and pay with your gift card.
Great Article! We have saved so much money just by staying out of Wal-Mart! We get Wal-Mart gift cards all the time too, I never thought about using them to purchase other gift cards at the check out!
Great article!
I suffer from the overstimulus at Wal-Mart. I ABSOLUTELY MUST have a list or I will buy all kinds of stuff I don’t need immediately (even though I’ll use it later) and still miss a couple things I went in for. I despise the place, but It is still the most convenient place for me to shop. I have 2 small children, and getting them in and out of the car several times is such a hassle. Some days, it’s worth the extra money I end up spending. I do try to shop Walgreens and Aldi’s first, then send my husband to Wal-Mart with a list. His simple man-brain can shop there better than my overstimulated, multi-tasking, thinking into the future mom brain.
Bill Smillie sold his store to Price Cutter.
Great insight. Thank you for sharing.
Since taking your class I have limited my trips to Walmart drastically!! I love not going there. I know it is important to know prices and you mentioned in one of the classes to keep a price book. My biggest question is, should the price listed for the item be before a coupon is used of after?