Saturday, April 30, 2016

What would you spend $624 on; The spending game

I work in six different super centers as a vendor/ merchandiser (I don't actually "vend" anything). The stores I work in are all part of a local large chain. I personally find the dynamics of each individual store quite interesting. One of my stores is a little bit hillbilly. If you walk down the main aisle at that store there tends to be more hunting and fishing items on display. One of my stores is in an area with a high population of Hispanic residents and you will find a  much larger variety of ethnic foods related to Hispanic cuisine at that location compared to the others. One of the stores is near a very large university and it is VERY geared towards college kids. One of the most interesting differences that I've found is that one of the stores, near a high population of Dutch descendants has these awesome Dutch pig in the blankets in the frozen foods department that none of my other stores carry. It took my awhile to realize why I could only find them at one store (and to figure out which store I'd bought them at).

Most shoppers are very unaware of the differences between stores. Besides small layout differences the average customer has no idea that one store will offer a larger variety of a particular item than another based on clientele. Most shoppers are also unaware that prices are a few cents higher on most items in a store depending on whether or not there's a Walmart across the street and also depending on the overall economic situation of the area. Lower income areas tend to have lower priced items throughout the stores. (The chain I work in began in 1934 (28 years before Walmart) and is credited with pioneering the modern supercenter concept. The owners originally wanted to keep the stores local (unlike Walmart). It is rumored that Walmart tried to buy the company which refused to ever sell, after which Sam Walton vowed to build a Walmart directly across the street from every single location of this chain. Walmart has been pretty successful in this vendetta. However a few stores are still without the competitor directly across the street and the prices on items throughout are higher at those stores by a few cents.) At one store a yogurt cup will cost 59 cents and at another, only a few miles away the same yogurt cup will be 65 cents. Most customers don't realize this. These subtle differences fascinate me.

I could be wrong but I imagine most if not all chains operate with this same model. Lower prices where there's more competition and in lower income areas, higher prices where there's more wealth and less competition. There are three stores in particular not very close to my home (closer to a big city about 40 minutes away) where a few of my friends shop. The price differences at these stores is actually pretty drastic even though all three stores are quite close together. I've talked to my friends about the price differences between the lower income area store (with a Walmart across the street) and the the higher income area stores (both don't have a walmart directly across the street).

My friends were completely unaware of the price differences until I pointed them out. BUT they both said the same thing, they prefer the higher income area store and "the small price hike doesn't seem like such a big thing." In fact one of my friends drives farther to go to the higher priced store. Mind you, I used to work at this particular lower income store once a week, for several years (it's no longer one of my locations). It's not a bad store and if you go during the morning/ afternoon it doesn't seem "low income" or unsafe. It is a bit older, not quite as clean and fancy and it does get a little more interesting in the evenings but the friends I'm referring to do shop in the morning/ afternoon.

For example's sake, if you had a cart with 40 items in it and the average cost was 10 cents per item higher (that would obviously balance out to where some items would be 2 to 3 cents more and others would be say 40 to 60 cents more) that trip would cost you $4 more at the higher priced location. If you shopped a similar trip three times a week your groceries would cost $12 more a week and $624 more a year. Now, most people honestly don't notice the subtle price differences. Literally, every person I've ever pointed these price differences out to has been unaware of them. But even once I've pointed out price differences people have almost always said, "I like this store more."

The way we shop, where we shop, and paying attention to every penny goes a long way if you actually care about spending $624 to shop in a "nicer" store as opposed to spending $624 on an actual thing (or having that extra $624 to put towards debt or savings). When we throw quick stops at a "convenience" store into the picture price differences can actually be quite drastic. Instead of 2 cent or 10 cent differences there will be several dollars worth in price differences. You really do pay for convenience at a convenience store.

What would you do with $624 (or more)? Do you pay attention to price differences in shopping centers where you live? This is just one little aspect to the spending saving game but it's an aspect that's incredibly intriguing to me and something that I don't think a lot of people pay attention to.

12 comments:

  1. Given your job and bent for being frugal it's easy to see that you'd notice these store's price differences.
    I've noticed this too.....my Weis and Rite-Aid stores in my teeny tiny town are higher priced on most items than Weis and Rite-Aid stores are in adjacent towns. That's because my little town is seen as more affluent than these other towns so we get gouged on price(well I don't at R-A because I never spend $ there lol). But the thing is, if I drive to those other town's stores instead, after factoring in time and car costs for the extra mileage, am I really saving $ by doing this?
    Interesting question.

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    1. LOL, "well I don't at R-A because I never spend $ there." You are awesome!

      I wouldn't encourage spending more on gas then on savings or wasting too much time to save $10 here or there :)
      That's obviously just another factor. Here though, there are stores galore. There might be something fairly unique about my part of the world. We have the two major super centers and honestly the different ones aren't very far apart. For example if I start at my southerly most location where I work I will drive directly past four other super centers on my way home (that's five super centers total) in 30 minutes. Along with those super centers the landscape is dotted with gas stations, convenience stores, pharmacies (there are at least five Walgreens in this 30 minute stretch), and smaller grocery stores as well (not super centers).

      It's not just this way with grocery stores. There is big competition for most retailers. Hardware stores for example, there are 3 major ones and a few small ones within this 30 minute range.

      Yes, I do drive all over for my job so I do have the luxury of choosing to shop at lower price locations without the vehicle expense factor but in general I think a good majority of people (obviously not all) have several different options for where to buy groceries. I'm not sure most people think of the subtle price differences between locations, or care about those price differences. That's sort of the bigger issue. Most people that I talk to don't actually care. I know several people who do actually drive a few miles further to go to the "nicer" store, where things do cost more. That's more what I'm referring to.

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    2. Well the grocery stores in the town South of here carry more Hispanic type foods, as does that Walmart, b/c there is a large Hispanic population there. The same chain stores in the town West of here carry more Polish type foods as that town has a large % of older people of Polish extraction.

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  2. Interesting analysis. I live outside of a small town with a Walmart which does have higher prices than other Walmarts. I do shop there even though I could drive 45 minutes to a larger city and pay quite a bit less. The reason I shop there is because I don't want to sacrifice my weekend to drive there to save a few bucks. I work full time and I want to spend my free time hanging out with my kids or gardening or whatever. Plus, I do like supporting the local Walmart and other grocery store because I want to keep them in business and support the jobs in my town.

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    1. I do not think I'd drive 45 minutes to go to a cheaper store. 45 minutes is a long drive if it's not necessary. Gas and vehicle costs alone probably wouldn't be worth it. And time is very valuable. If you're wasting precious time to save money, then in many cases you're not saving money.

      I'm referring to people and places where there are several options of where to shop. If there is a 5 or 10 minute difference and one location is cheaper, over time it really adds up. But most people don't think about their grocery pennies adding up like that. Most people shop at the store which has newer signs and fixtures or shinier floors or a smaller population of questionable people. (I'm not encouraging anyone to feel unsafe but I work at a few locations where there are "interesting" individuals. The majority really aren't unsafe in any way. They're just different. But people avoid such locations because of different customers. Believe me there are stores I would never go to because they are unsafe.)

      Over all, a lot of people are spending hundreds of dollars more a year in pennies worth of price differences because of the store they chose to shop at, which may be 2 minutes away from a much cheaper store.

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    2. I can't say I've ever noticed such differences here (UK) except I think that the small convenience versions of the larger chains are more expensive (or don't stock the value ranges). I wonder if the fact that we also have on-line grocery shopping will also mean that the supermarkets standardise their pricing? Variations would be harder to sustain if customers can check on-line. Interesting.

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    3. I have no idea what it's like over there, obviously. The price differences within a chain are often subtle. Like I said, most people that I've mentioned them too had no idea that one store ran considerably more expensive than another.

      I wonder if by you there are still price differences but on-line shopping would have it's own standard price. It's honestly pretty difficult to keep track of the differences without paying close attention. Between sales and price changes it's difficult for someone to ever notice that one store sells the same item for more or less.

      For example take two of my stores, milk is priced depending on supply. A few weeks ago one of my stores was selling a gallon of milk for regular retail $2.59 but another was selling it for $2.89. There was a sale on milk last week for $2.50 a gallon. The sales always run the same in a market because of flyers so all the stores around here would have had the milk at $2.50 no matter what regular retail is. BUT this week milk went down in price. The $2.59 a gallon store is now selling a gallon of milk for $1.99 and the $2.89 store has it for $2.29. This kind of thing goes on a lot with lots of items all over the store.

      I try really hard to buy most things on sale which takes some of the "location" issue off the table but if I were to buy milk (about three gallons a week) not on sale at the more expensive location that's about $50 extra a year just on milk.

      Sorry, I've been giving ridiculously long responses to everyone on this post. You'd have to make a list of specific items and go to a few locations and jot down their prices to know if stores/ a chain vary prices depending on competition and clientele.

      Yeah, convenience stores are always way more expensive here. I can't bring myself to stop at one even "just" for milk or butter because everything costs SO much more there (but I am at the grocery store 5 days a week so it'd be pretty ridiculous if I "needed" to stop into the convenience store).

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  3. I live in an area like you do where options are everywhere. I fall somewhere between the 2 schools of thought. Though I can find anything within 1 mile of my home, I have noticed price differences just 4 miles away. If I am in that area doing something else I tend to shop there, but because of traffic (and traffic lights) it often takes 20 minutes to drive those 4 miles and I am unwilling to give up that much time to save a few cents every time I go to the grocery store. Since I have the luxury of having 4 stores to cherry pick within a mile of my home, I think I save both time and money.

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    1. See, for me this conversation takes a weird turn because I work within a 20 mile radius and have a plethora of stores to choose from without "going out of the way." I'd say that in a normal situation I'd be just like you. Making the most of what I had while trying to save time and money.

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  4. Some people don't understand a few cents here and there add up. Those same people complain they don't have money for anything. I would buy a plane ticket but I save all my beans for travel :) I scrimp and penny pinch to make it happen and it does. I don't splurge on coffee out, I don't buy new clothing (only thrift store duds, really fabulous ones that cost lots of money new but pennies on the dollar used) and I cook at home 99% of the time.

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    1. I think a lot of people don't understand that a few cents here and there add up, or they're in denial about it. Sometimes I can even be in denial about it and I try to keep this reality at the forefront of my mind regularly. It's like we almost have this malfunction about us, it's part of the living in the moment phenomenon where even though we know "pennies do add up" we are able to deny it or completely ignore the fact because they aren't adding up RIGHT NOW.

      I write posts like these mostly for myself, just to cement in my mind that every penny counts. That $624 will be gone just like that (theoretically) if I forget to pay attention to small differences in price like 59 cents for a yogurt vs. 65 cents.

      I believe that in reality we lose a lot more than $624 a year by paying more for items that we could get cheaper. You do it the right way though! Not wasting here and there on this or that and buying something for much less than regular retail, that is really the way to be. I really try to be that way too. And for the most part I really like it. There's very little that I feel I'm missing out on because of my penny pinching.

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  5. Super interesting topic, because I do agree that pennies add up, but I am definitely a "I like that store better, so I shop there" person.

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