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Corrosive pricing.


by Doyle, Mona
The Shopper Report • May, 2007 •

Shoppers perceive pricing that's higher than they were led to expect as cheating. Whether or not it's deliberate, they usually think it is and would rather shop at stores that didn't do it. At the same time, while many affluent shoppers have made conscious decisions to pay more for good food as a way to maintain their weight and stay healthy, others are doing a slow burn as they see prices creeping up in many categories--and a fast burn when they believe the price increases are wearing camouflage.

Partly because of their long association with intense price competition, supermarkets take the most blame for pricing that corrodes customer relationships. Instead of building loyalty, frequent-shopper cards corrode relationships whenever a shopper forgets to use them or meets resistance to expecting card prices even without presenting their card.

Shoppers who discover that they paid $3 to $4 dollars more than the signed price for each of the half-gallons of ice cream they bought feel cheated and are mighty unhappy with the store. If they go back to the store with their sales slips and shopper cards, they won't have trouble getting their overpayment reversed. But it takes time and money, and they are angrier with the store than with themselves for forgetting. This happens with too much frequency to shoppers who are busy, preoccupied, having senior moments, or talking on cell phones while checking out. (By the way, many libraries now refuse to check out customers who are talking on cell phones. Supermarkets might consider doing the same.)

An interesting new study of 6000 shoppers from a company called Alix Partners (www.AlixPartners.com) found that 'honest" prices are more important than lowest prices to today's shoppers. "They resent needing to hunt for bargains, but even more, they really resent being taken advantage of, being deceived, or being made to work to receive real value. What they crave: consistency, honest prices, and fair value--even if, in many cases, that means paying a little more."

Many shoppers would rather shop at stores that don't have loyalty cards. These stores include Costco, Wal-Mart, Target, Whole Foods, and Trader Joe's. All of these stores have prices that shoppers trust. And all of these stores are making lots of money.

Supermarkets also share the blame for size changes that deceptively cover up price increases. The manufacturers may be doing the shrinking, but retailers seem to support it and allow their customers to be deceived.

* "I hate that healthy food costs so much more than unhealthy food. By the way, I forgot to tell you about my complaint Campbell's soups. It really irritates me that prices are raised so dramatically for less sodium in their products when they should have had this under control long ago. It appears they are forcing us to pay more to eat more healthfully."

* "I hate it when companies 'fool' unsuspecting customers who are suddenly getting less for their money. I try to avoid buying those products and the stores that support this kind of thing."

* "Decreasing the size is a very subtle way of increasing the price and getting away with it. Why is a gallon of oil now 101 ounces?"

* "I think Jewel Food Store prices are really too high. I can't stand to shop there anymore."

* "Price deception at supermarkets has been getting worse for several years, since the ice cream makers cut half gallons to 1.75 quarts and the supermarkets supported the change by advertising the pictures instead of stating the size. Stores like Whole Foods have higher prices, but they don't cheat."

* "Wishbone's Salad Spritzers are an ingenious way of charging a LOT for a tiny bit of salad dressing. It makes sense by helping you use less fat and calories, but the price per ounce is obscene. I asked a store manager about the price, and he told me I wasn't supposed to think about it that way. Now we have thought control too!"


COPYRIGHT 2007 Consumer Network, Inc Reproduced with permission of the copyright holder. Further reproduction or distribution is prohibited without permission.
Copyright 2007, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.
NOTE: All illustrations and photos have been removed from this article.


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