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The Ten Things Your Supermarket Won’t Tell You story from yesterday has been posted at Digg, where the members have shared some great comments. Here are some of the best.
One supermarket employee notes:
There’s no privacy risk with loyalty programs. At the store I work at, your address is only used to send you thank-you coupons and crap from us, and your phone number is only used to look up your card in our system should you forget to bring it.
Which is backed up by another commenter:
I worked in the Marketing department for a large supermarket for several years. I can tell you unequivocally that the loyalty card programs are there for the supermarket to maintain their margins (which are the lowest of all retail formats, usually less than 3% markup on almost anything). Yes they also get quite a cost savings by selling the data to advertising companies, but the general gist is so that they can spend less on advertising and send pertinent deals specifically to you (micromarketing at its best). As a general rule, all supermarkets are run on the cheap, and are always looking to save a buck. The neat thing is that many are moving towards a personalized email/circular idea that offers items YOU buy when they are on sale, saving you time and effort.
Some commenters offer gross anecdotes:
This is a true story, it’s also why any meat I buy comes from a professional, independent butcher: A year ago a ocal supermarket got fined for having a legally blind guy working at the head of the meat dept. He didn’t even see the flies buzzing around and shit unless customers complained. Apparently couldn’t smell either. And the supermarket didn’t even fire him, they transfered him to another store.
The most disturbing thing I know about supermarkets are the chickens they sell. You know that chicken you buy for cheap? The reason its so cheap is because its mass-produced in chicken factories…usually you can see the marks on the chickens. They’re called “hock burns” and are caused by acidic conditions from the waste(shit and such).
Others discuss esoteric points like slotting fees:
Adding my two cents about the slotting fee point:
Not only this is true, but the most expensive shelve to “get” for the companies is the one easily accessed. For example, notice how often the well-known brand of ketchup is located near the bottom, and some no-name ketchup brand is near the eye level.
Furthermore, I dont know about the US, but here in Canada there is an invasion of grocery store’s own brands on the shelves. For example, Loblaws/Provigo owns a series of products called “President’s Choice”, which mimicks the well-known brands using usually cheaper ingredients, or just using batches that didnt fully pass the QA test.
What you may not know about this: the grocery stores are paid back by the grocery’s headquarters depending on how much this self-owned brand sells.
To sum up: not only that store’s brand is usually cheaper for the customer, but the local store are being paid to put it on the shelves. Makes you wonder how really cheap/bad quality those products can be!
This commenter has some interesting observations:
I was in the grocery business for a long time. I think the busier stores are usually the best for freshness. Canned goods hardly ever get rotated so some of those in the back are pretty damn old but most things last a real long time in those cans.
A few more interesting things: I’ve seen very few bad produce isles. The stores know that if it looks bad it won’t sell. When you walk by the seafood counter it shouldn’t smell like fish.
The big money is made in the surrounding departments like the Bakery, Meat, Pharmacy, Frozen Food Aisles, etc. The main aisles are less then 3% profit margin. There are a lot of items they actually lose money on. For example, Miracle Whip, Velveeta, etc seem to be popular ones. These are loss leaders. And they are usually items people seem to remember the price of.
One fellow says that many of the items on the list are true, at least at his store:
As a current employee of Safeway, I can tell you that a lot of these things are true. I am a cashier that works graveyard stocking shelfs and doing price changes. Since I have started changing prices i have noticed a lot of tricks that Safeway uses.
1. The sale price can only be .50 less the the full price. sometimes its more.
2. Everything at a grocery store is close to double the price of Walmart or Target.
3. I have seen the actual price go up to make you think your saving money with the sale. (Safeway brand sodas use to be on sale for $1.00 full price was $1.19 for a six-pack now they are 1.49 and they are on sale for 1.25.)As far as dates go, as a shelf stocker, we dont have enough time to pull everything off the shelf and check the dates. a lot of the time the stuff in the front gets pushed to that back of the shelf. which means the stuff in the back could be expired.
Please note that I’m no alarmist about grocery stores. I don’t think they’re evil. The orginal article made some interesting points that could help people save money, so I posted a summary.
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June 29th, 2006 at 6:32 pm
Everything at a grocery store is close to double the price of Walmart or Target.
I love this blog and I’m all about financial acuity, but this is the sort of dangerous conclusion reached by the narrow-minded thinking that often goes hand-in-hand with penny pinching.
My mother used to buy oversized containers of laundry detergent. I’d explain that I understood smaller containers cost more per ounce but that I didn’t feel it was money wasted. “For my extra 14 cents, I’m buying the ability to lift these smaller bottles of detergent without pulling a muscle.” We had the same discussion about a box of 200 trash bags: “For my extra 45 cents, I’m buying a smaller box that fits inside my kitchen drawer. The bigger box is cheaper, but I don’t have anywhere to put it.”
Same principle here. Yes, my local grocery store costs more than Wal-Mart, but that isn’t money wasted. I’m investing in my local economy — but I’m also buying accountability. My local supermarket has fewer customers than multinational Wal-Mart, so each individual customer’s voice carries more weight. They care what I say.
When my local store decided to stop carrying Hodgson Mill corn meal, for example, I complained and they reversed their decision. Everyone in my neighborhood likes certain candies at Halloween, and I don’t have to worry about my supermarket abandoning those brands because 20,000 customers in Kansas and Missouri stopped buying them.
Learn to distinguish between being aware of how much you spend versus always searching for the lowest price. One is smart. The other is narrow-minded and destructive.
June 29th, 2006 at 8:53 pm
I’ve heard that grocery stores only make a 3% markup, but I can’t see how that could possibly cover their costs. I also can’t see how that’s true from the standpoint of my involvement with cooperatives that have markups of 20-35% and are still consistently less expensive than the grocery store. Something’s not right.
June 29th, 2006 at 9:29 pm
People that claim that grocery stores only use their “loyalty” cards to send out coupons truly have no clue what they’re talking about. Catalina Marketing in St Pete FL boasts this on their web site:
“In the retail industry, Catalina Marketing retrieves about 250 million transactions per week, across more than 21,000 grocery stores. On behalf of our grocery retail clients, we manage one of the six largest databases in the world, containing the purchase histories of over 100 million household IDs.”
Still think grocery stores aren’t making money by tracking you with those cards?
June 30th, 2006 at 7:39 am
I second cribcage’s feeling about Walmart. I also add in that the price difference you find at Walmart is lost in the amount of time you spend in line. Even when I do a monthly supermarket trip, I can be in and out in an hour. If I attempt the same thing at Walmart, it takes more than an hour just to get through the line since they never have enough cashiers, prices are always wrong and everyone in line in front of you has to have prices rechecked, and so on and so on. Saving money is great, but only if it doesn’t cost me a more valuable commodity: my time.
June 30th, 2006 at 7:58 am
I’d take a lot of those Digg comments with a grain of salt. President’s Choice is Loblaws/Superstore’s *high-end* brand; their discount house brand is No-Name. President’s Choice products tend to be a bit more expensive than the big brands but tend to be a bit better quality as well.
I don’t understand his point about how the store preferring to sell house brand products means the house brand must be low-quality. It seems to me that they’d prefer to sell house brand because they’re able to pocket all of the profits instead of sharing some with Heinz, and because getting customers hooked on a high-end house brand means those customers won’t be able to go to a competitor to buy the products they like.
(Also, any story that begins “this is a true story” probably isn’t.)
June 30th, 2006 at 8:08 am
[...] Cribcage took exception to a comment I posted yesterday. In the further discussion of things your supermarket won’t tell you, I quoted a Digg-user who works at a grocery store: Since I have started changing prices I have noticed a lot of tricks that Safeway uses. […] Everything at a grocery store is close to double the price of Walmart or Target. [...]
July 3rd, 2006 at 7:31 am
Supermarkets will turn over all the information attached to your loyalty card to the authorities upon request.
One man was convicted of a crime because police used the loyalty card database to show that he was at a certain store at a certain time.
May 20th, 2007 at 1:19 pm
Nice try, Lazlo. Which “one man” and where? You are full of it. Anyone can get a brand loyalty card from ANY store with false information, no ID required. This would never be valid in court.
The information collected is used for demographic information (what do you buy, what will you buy more of).
If you are dumb enough to give them your correct info, they send you coupons based on previous purchases.
Stupid conspiracy theories presented as fact have no place here, only confuse the issue.