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There is a great piece today posted on the Yahoo website about the retail pricing game.  I spent over 20 years in retail and can assure you that was the case then and I believe it’s probably even worse now.

One of the things they talk about is loss leaders.  The best example that I remember is milk.  Back in the seventies, we paid about 50 cents more per bag than we sold it for.  Granted, some of that was recovered through volume rebates that resulted in a very slim margin.  The reality is that we made so much more profit because we sold the milk that cheaply.  Because most at the time used a lot of milk for families, they would often follow the milk and purchase the balance of their grocery order there.

Margins on cheese, produce and meats often were in excess of 30% resulting in a much higher overall profit because we “led” with the milk.

Read the article on Yahoo called: 4 Pricing Strategies That Increase Your Spending.  It is very revealing.  You think you are in control but are you really?

Now you have an awareness.  I suspect you just may actually start saving more money by paying attention to the strategies the retailers are using.  Now, pay attention as we go through this Christmas shopping season!

Make it a great day!


P.S.  What am I thankful for today?  I’m thankful for my experience in retail.  I’m thankful I no longer work in retail!  I’m thankful that I am lucky enough to be able to do some shopping for Christmas.

What are your thankful for today?

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