Social Question

kevbo's avatar

Does $1 ketchup (that used to cost $2.42) make you feel better?

Asked by kevbo (24165 points ) May 24th, 2010 from iPhone

I can’t help but question the timing of Wal-Mart’s latest, aggressive, discount campaign and whether it’s meant to placate the teabagging and otherwise disgruntled masses in the face of all the other crap news we’ve been dealing with.

Do you think this might be the case, or is it something more benign such as old fashioned leveraging to run everyone else out of business or just trying to be a bright spot for its customers?

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28 Answers

njnyjobs's avatar

It’s a marketing ploy on the part of Walmart so they can herald the fact that they roll back prices. Of course, the items they roll back prices on are not the stuff consumers will get out of their way to realize the savings. They use those roll back priced items to lure consumers into the store and once there, they know that the impulse-buying trait that most people have will raise their margins ahead of the loss from the price leader items they advertise.

john65pennington's avatar

Where is you sense of American “drag-u-in” spirit? do you really believe that Arkansas born and bred WalMart would do such a thing? of course not, they just happened to luck into a warehouse of Heinz ketchup thats almost outdated and just wants to pass the savings over to its loyal WalMart customers. nothing wrong with that, is it?

By the way, is it just me or do you also discover that WalMart fails to remove outdated merchandise from its food shelves?

jrpowell's avatar

It is simply a loss-leader. Come in for cheap shit that you buy every four months and leave with a shiny DVD player. I went to school for this stuff.

marinelife's avatar

It is simply marketing in the face of the recession.

syz's avatar

I’ve never understood the point of Wal-Mart’s “price rollback” ad campaign – why not sell it at the lower price to start with? It’s not like the producer has suddenly refunded part of the purchase price. The price is the price. So does that mean that Wal-Mart has artificially high prices to start with?

See? Stupid ad campaign.

kevbo's avatar

@syz, ostensibly it could be because manufacturing and distribution costs have been reduced over time due to efficiency measures (such as sending everything to China or reducing packaging).

mrentropy's avatar

I bought ketchup at Walmart last night, but I didn’t see any for $1.00.

SeventhSense's avatar

I don’t imagine this is political. Discounting things like ketchup at a time when people are purchasing more due to barbecues is just good business. People save money but they are buying twice as much as in the winter so it’s relatively painless for the manufacturer and distributor. Also like mentioned even “lost(edit loss?) leaders”, which I don’t imagine this is because ketchup is relatively cheap to make in bulk, get people into the store and spend more. Surveys say 40 percent of our purchases at the grocery are impulse buys.
So they may come for the ketchup but they’re leaving with a cooler and a lawn chair to boot.

aprilsimnel's avatar

I don’t eat ketchup. Also, no Wal-marts in NYC!

I saw your question and thought, That’s just a loss-leader, innit?

kevbo's avatar

@aprilsimnel, I’m sure that’s true, but they’re going to have 10,000 loss leaders this summer. (I guess I should have mentioned that in my original question.) It just seems odd to me.

The world’s largest retailer has been trying to shore up its discount image by advertising it will be rolling back prices on roughly 10,000 items, mostly food and other staples.

xRIPxTHEREVx's avatar

Walmart is trying to take over the world!

I am a strong supporter of small businesses and shop at them whenever I can. It’s good to go to a little mom and pop shop where people are knowledgeable about the products they’re selling, rather than going to Target and having someone shrug their shoulders at my question. Even if it means paying a little more, I love keeping small businesses alive.

aprilsimnel's avatar

My goodness. 10,000 items? So! Prices on many foodstuffs and staples are artificially high, then. That’s the first conclusion I’ve come to, based on that link.

njnyjobs's avatar

Another reason why they can afford to roll back prices on certain packaged food items is because these products have been probably sat too long and the shelf life is wasting away. The reduced cost for the transportation of this products due to steady decline of fuel prices the past year helps in lowering the selling price. I wouldn’t be surprised if prices of other packages go rolling back to higher prices once the effects of the BP Oil spill in the gulf starts to haunt all of us.

SeventhSense's avatar

@kevbo
You have to remember that Sam Walmart revolutionized shopping by lowering profit margins but increasing volume one hundred fold. Selling a million items at ten cents profit each is still better than selling one hundred thousand at 90 cents profit each. And with the volume and purchasing power they have at this point no one can even compete with them. Many of their manufacturers are actually dependent upon them and would be out of business because they are dependent upon these massive contracts. Walmart can essentially hold them hostage if they don’t meet their terms. They actually force domestic businesses to outsource labor to foreign companies in their insatiable desire for lower costs.

kevbo's avatar

Sam Walton?

… which is another way of saying that they more or less control the market for consumer goods, and there are a lot of pissed off, anti-incumbent consumers lately. Hence my question.

ragingloli's avatar

At my local supermarket ketchup permantently costs €0.89, about $1.12. And that is not even the lowest price. Aldi has 500ml ketchup for about $0.90 permanently.
The secret is that our supermarkets only carry their own labels and only 1 or 2 variants of any given product so their margins can be lower. They also do not waste money on decorations or even shelves. They put it in the market as it was delivered.
Food prices here are so low that Walmart failed to get a hold and had to leave the country after never being able to make profit.

MissAnthrope's avatar

@ragingloli – That warms my heart. I hate Wal-Mart so much.

susanc's avatar

@ragingloli – where are you? I want to move there.

ragingloli's avatar

Germany. Here is how it looks like inside our supermarkets.
Oh, and Walmart’s loss leader tactic, that is selling certain products below cost, is an illegal practice in Germany, so they could not do that either.

MissAnthrope's avatar

Honestly, it bothers me when things are really cheap, like too cheap. I’m often thinking, How the hell did this cost less than a dollar to make? All I can think is exploitative labor practices in other countries and that doesn’t make me feel good.

ragingloli's avatar

A really big chunk of the price is created by the retailers themselves. There are a lot of things that walmart does that simply are not necessary and which supermarkets in Germany have largely abandoned.
Things like:
-dedicated advertising departments, we do not need that.
-dedicated customer support departments
-employees that do nothing but stock shelves, unnecessary, just get rid of the shelves and pile the products in the big boxes they were delivered in.
-employees that bag your groceries, total waste, let the customers do it themselves
-free grocery bags, wasteful, let customers pay for the bags and let them reuse them
-employees that do nothing else but collecting shopping carts in the parking lot, useless spending, just let customers insert a deposit into the cart, so they are encouraged to bring back the carts themselves to get their money back.
-fancy decorations and lights, you do not need that, customers come to buy stuff, not look at your decorations
-having too many variations of certain products, this will invariably lead to many products just incurring loss while diminishing the sales of the others. Only stock the ones that sell best, only stock a few variants, and sell a lot more of those
-paying with credit cards, credit card transactions come with a fee, a cost that will have to be added to the price of products. disallow credit cards and save the cost, lowering the prices for consumers
All these are cost incurring things that our supermarkets do not do, thus they can shave it off the prices of the products without having to force suppliers or employees into slave labour.

Jeruba's avatar

@ragingloli, it’s no surprise that you’re an expert on how it’s done in Germany. But you must also be very familiar with American supermarkets and shopping practices in order to know exactly what they’re like and what the big points of contrast are. How do you come to know American marketing so well if you’ve never lived here? Is it a subject that you can study in school?

ragingloli's avatar

@Jeruba
Aldi has markets in the US and they took their German practices with them across the atlantic. The comparisons come straight from US consumers who shop at Aldi in the US. You can read them all across the internet.
That and the fact that when Walmart came to Germany they tried to introduce some of their practices here too, like employees bagging groceries for customers, which of course german customers outright rejected.

SeventhSense's avatar

@kevbo
Yes Walton, I stand corrected…of course not to be confused with these Waltons
Good night john boy :)

SeventhSense's avatar

@ragingloli
Germans don’t like their groceries bagged?

ragingloli's avatar

@SeventhSense
We do not. We like to do that ourselves.

Jeruba's avatar

Interesting, @ragingloli! Thank you.

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