Welcome to the fifth installment of The Wal-Mart Weekly -- a new weekly column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.Last week I looked at Wal-Mart Stores' (NYSE:WMT) associates through three field trips to see what actual store employees were like, what they had to say and what impression they left with me as a representative of the company that employs them.
This week I'll be comparing prices on several items found at Wal-Mart and a few other retailers to see if Wal-Mart indeed has "lower prices." It's interesting to note that Wal-Mart does not advertise or promote that it "always has lower prices," but that it has "always low prices" -- which is a direct way of saying the retailer has low prices, just not the lowest price on everything, all the time. I've even known family members who take competitor's ads to Wal-Mart regularly and have the retailer match prices -- which they always seem to do. So, let's move on, shall we?
A little background
In what could be described as my second field trip for research purposes to Wal-Mart in as many weeks, I decided to look at several grocery items to determine where Wal-Mart's pricing sat compared to the competition. I had to almost completely focus on grocery items, since comparing general merchandise (exact same items) across retailers is exceedingly difficult these days (or so I found out). There are brands and lines made specifically for retailers by Chinese vendors these days, so one must find a brand name (and model) to really get a comparison that's 100% equal.
Sure, I could compare flat-panel TV prices across retailers, but there would be differences (in features, etc.) that would make a true comparison nearly impossible. I'm quite sure retailers want it this way to confuse customers and make it hard to compare pricing. I know that electronics manufacturers produce the exact same item for many retailers, with only small feature changes here and there, along with different model numbers to appease retailers who don't want consumers making "apples to apples" comparisons -- and hence, exposing the real pricing and related comparisons. On we go ...
Shopping like a normal consumer
Upon entering the first Wal-Mart store to do some competitive price hunts (one of two), I immediately went to the grocery aisle (these were Supercenters, of course) to pick out some very popular grocery items. I based this "popularity" ranking on my own experience of looking for certain grocery items on days when Wal-Mart grocery aisles are as packed as sardine cans.
I had already reached some conclusions by researching flat-panel TVs in Wal-Mart's electronics department -- three of the four models were ones I could not find at any other retailers in the area (Best Buy and Circuit City) and the fourth, an iLo model, must be exclusive to Wal-Mart, as iLo is a private label brand for the retailer (made by LG Electronics, at least for flat-panel TVs, I believe). When all there is to compare is a technology (plasma TV) and a size (42"), comparisons -- while still valid -- lose the cache of trying to "really" see which retailer has the lowest price at any given time on any exact item.
Anyway, here is the list of six grocery items I located at Wal-Mart that I would later compare to an Albertsons grocery store in the area:
Wal-Mart price, Albertsons price
- Honey Nut Cheerios, 18 oz. -- $3.39, $3.29
- Hunt's Ketchup, 24 oz. -- $0.88 , $0.99
- Kraft Macaroni and Cheese, 7.25 oz. -- $0.39, $0.49
- Naked Juice, 15.2 fl. oz. -- $2.38 , $2.99
- Silk Soy Milk, half gallon -- $2.49, $2.79
- Triscuit wheat crackers, 15 oz. -- $2.50, $2.79
- Hershey's chocolate bar, 1.25 oz. -- $0.33 , $0.50
Looking at pricing strategies
As I mentioned, Wal-Mart has had a habit (ever since I can remember) of never advertising "sales" or "specials" except during top shopping seasons like the end-of-year holidays. The chain simply displays an "everyday low price" on all items and does not use gimmicks like "double coupons" and frequent sales to lure in shoppers. Maybe it should, to help it revive flaccid U.S. sales. With grocery retailers like Albertson's, Kroger, Pathmark and Safeway constantly rotating "sale items" through circulars and in newspapers, I am pretty sure there are shoppers who plan shopping sessions around multiple retailers in order to get the best price on everything on that list.
Meanwhile, Wal-Mart doesn't advertise "sales" (except on special occasions) and lets the "everyday low prices" angle do the talking. Is this enough? Perhaps it is not. But, to a point, it doesn't need sales, as evidenced from the seven grocery samples referenced above. The problem? This marketing angle is stale and boring, even though in this case it is right on target.
Wal-Mart's actual prices -- what is the deal?
Something else I noticed was the oddness of actual Wal-Mart pricing. I never did see a price ending in ".99" while shopping. Instead, I saw prices ending in what seemed to be random numbers, like ".38", ".62" and ".76". I've read (and I believe) that Wal-Mart prices items throughout its stores (not just in grocery) in apparently random (but actually carefully selected) numbers to give the appearance of lower prices. The thinking is psychological and subliminal: Customers will think Wal-Mart really is giving them the absolute lowest prices when the price tags don't always end in the standard ".99". This makes perfect sense from a psychological marketing perspective.
Turning the tails on other retailers, all I saw were prices ending in ".x9" on almost every item (unless it was on sale), with the price ending in ".x8" or ".x7" sometimes thrown in for good measure. By the way, that "x" stands for some other number, like 2, 4 or 9. Common retail practice is to price items with the ending of 9 so as to not tip the consumer's mind into the next dime-based price bracket -- and therefore, influencing their thinking.
It does hold true after all
From this experience, Wal-Mart's claim of "everyday low prices" really does hold true from a grocery perspective. The retailer does have everyday "low prices," but perhaps that image is not enough for the retailer to continue goosing more sales from existing consumers and winning new (and former) customers into its stores. Prices alone, as we all know by now, are not the only criteria for informed shoppers these days. Style, experience, image, traffic -- all of these items can play into gaining a customer and making him or her loyal to shopping at a particular location. Ask Target about this after the second-largest discount retailer saw impressive quarterly gains all last year compared to year-over-year fiscal quarters.
Next week, I'll be looking at Wal-Mart's image problem on multiple fronts right now, and how the retailer can fix things (if it is not too late). I've mused on this in past columns, but there is so much to a much-needed Wal-Mart image makeover that a dedicated column seems appropriate. Until then, have a great week!
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Weird-Mart: Tales of the Bizarre from the Walmart Aisles


Reader Comments (Page 2 of 2)
3-30-2007 @ 12:57PM
paula wheeler said...
I agree with #9. I resent being treated as if i stold something. It has happened to me twice. The first time i had bought clothes for my grand child, the next time i bought a tv and coffee pot. Both times i was waited on by a cashier .
3-30-2007 @ 1:41PM
Judy said...
Al of these stores are business's and have to make a profit. A smart consumer will note that walmart compts other stores ad's if u take the time to bring them in with u. and they used to post them on the wall for u. But I like to shop other stores as well for sales and better quaulity, sometimes. But Shoplifting is and has been and probley will always be a problem so when shopping be aware that if u aren't, then it is only a minor thang to be checked.If u are really insulted, then try to shop where they don't mind being ripped off. The lines are the worse thing about shopping anywhere. But they do try and now have self check out machines. I spend a lot of money at walmart and kroger and some other. But the noise levels at walmart can be a turn off. and the crowds. But Kroger can be as well.and both are 24 hour stores.
3-30-2007 @ 1:25PM
Nikki said...
I also have a budget of $250 a month for a family of four, I do shop at Wal-Mart for the majority of my groceries. But I also shop at Publix (i'm in Florida) for my meats and harder to find items that Wal-Mart does not carry. I do have to say that about 50% of the employees I encounter are rude or nasty and the other half is pleasant. I shop at the newest WalMart in my area, because the other one is filthy and in time I'm sure this one will be too. I go around 1-2am during the weekdays to avoid the crowds (never during the day on the weekends unless I want to be in there for 2-3 hours). I have been shopping there since I was 18 and am now 28, that's ten years of savings, I can't even begin to add up what it must be. But I do agree that there are a lot of "blind" items that are marked up. and as far as the clothing goes, I'll buy it for my daughters for play clothes cuz it's cheap, but most of the time it shrinks and falls apart (usually they grow oout of them so fast it doesn't matter). And I buy other basics there, like socks, shampoo, razors and make-up and get a good price on them, a lot lower then the drugstores in this area. Wal-mart for me does have a lot of downfalls, customer service is a nightmare, bathrooms are usually so bad my daughters can't even use them without gagging, and at night a lot of items are still being restocked (which I understand). I know a lot of people who work for the company and most of them are very unhappy with there jobs. On top of that only one Walmart in this area has a stop light at the entrance/exit (it happens to be the furthest one from me), and getting into and out of them is also a nightmare. I advise people to always shop around, as far as conserving gas, if your day is gonna lead you near other stores, stop by them then. clip coupons and learn when the other stores have their regular sales.
3-30-2007 @ 1:43PM
RhondaJ said...
I hate going to our local Walmart. It is always crowded and there is never a place to park. Also I find Walmart irritating because it has shut down a couple of local stores where you didnt have the hassle, the never ending check out lines and parking. And here is another issue to Walmart, I can drive down the highway to another Walmart and get cheaper pricing on the same items. Seems as though Walmart price competes against itself.
3-30-2007 @ 1:44PM
Joe Martin said...
We have a new realy plush Safeway in our area which replaced an old one. I cannot buy anything there at regular ptice. Their prices are nothing short of rape. I must drive 22 miles to buy at WMT but it is well worth the trip when I need several items. I have to go to the WMT area anyway from time to time. I get sick and tired of discount cards, coupons and gimicks. Everyday decent prices that don't insult your intelligence make shopping more pleasant.
3-30-2007 @ 1:44PM
Sarah said...
Here in Georgia I always shop at MY Walmart. But the beef I have with them in my town is not enough check out help. I like the self check out best but it dont seem fair to have to pay the higher price and me having to do it myself. Especially the elderly. We should get some kind of discount.
3-30-2007 @ 1:51PM
John said...
Having worked for wal-mart for almost 10 years, I would have to say that alot of their pricing is lower than other chains. However I can also say that their pricing has policies to them that keep the prices from ending in numbers such as 9 or 5. Not only that, but as was pointed out the retailer does play psychological games on consumers. Their entire RollBack program is a prime example of tricking the consumer. Jacking the prices of these rollback items up for anywhere from 1 day to a number of weeks then dropping it back down to their "roll back" price gives the illusion that the prices are infact going down. Anyway I think this is a great way to keep the retail giant in check so keep up the good work!
3-30-2007 @ 2:14PM
Beverly said...
I do not shop at Walmart if I don't have to. I got so tired of the long lines and rude employees. Their aisles are almost impossible to get through because of eployees stocking the shelves with their big carts in the way. They also have things one time and then you go back to buy and they don't have it any longer. Bad experience for me everytime I went.
3-30-2007 @ 2:55PM
Anita said...
There are three Super-Walmarts withing a 25 mile driving distance from my house. The closest one is the newest, but you cannot tell it. The parking lot is littered, and shopping carts are always all over. When you walk into the store, it smells odd. The floors seem to be dirty, shelves are always messed up, and you can never find a sales person willing to help. Needless to say I avoid shopping there. The second Walmart is hard for me to find - so I don't bother. The third Walmart (and the oldest) is the farthest one away from me. It is clean, smells fresh, and is orderly. Staff is always willing to help you. The parking lot is always kept clean and the carts are frequently picked up. Prices in all three are the same - I've checked. Guess which one I buy groceries from???
3-30-2007 @ 3:54PM
Dadu said...
Wal-Mart prices are definately the lowest. The problem that I am confronted with is they can't keep their shelves stocked. They frequently discontinue item that I use and I have to go to anoyher store to purchase those items. Sometimes I don't think it's worth going to Wal-Mart.
3-30-2007 @ 7:52PM
er said...
I just wish the walmart employees had teeth where I live. I do not shop at walmart, its dirty, long lines, and the savings is not worth it to me.
3-30-2007 @ 4:01PM
ihateshopping said...
I am amazed at all the comments about Wal-Mart!! I live in eastern Mass. & we don't have stores that stay open past 9:30 PM, we don't have food [superstores or whatever they call them]--local store has 2-3 short isles of a small amount of canned goods (bargain brand tuna, generic soup & a few canned veggies, etc), an even smaller selection of soda and a freezer that barely ever has any items in it, items are past their expiration date or items look like they were drop-kicked into the freezer case. Of course, being good Americans, we have a full array of snack junk food. I have noticed that almost all the "food" items [sans the snacks] have damaged packaging so I'm wondering if we're getting the cast-offs from other stores--dented cans, smashed boxes, etc.
I am so very disappointed with Wal-Marts. I used to be a regular shopper but I've really cut back on my trips & spend less on each trip. When I do go, I pretty much stick to drug store & household items (cleaning products, etc; stuff that I know the prices of elsewhere). Our stores are not all that old around here. We were one of the last metropolitan areas [Boston] in the country to get Wal-Marts. Even Target ignored us until this past Oct. when they put up a small store about 10 miles down the road in a questionably safe neighborhood. Went once; been there, done that & won't do it again.
The closest Wal-Mart store, which is probably the largest of the 4 that are reasonably close by, routinely runs out of very standard, common items (i.e. aspirins, vitamins, certain types of pet food, 1-gal. bottled drinking water, certain sizes of batteries (AA/AAA), etc.). They not only run out for a day or two, it can literally take months for some items to reappear. If you can actually locate someone in the store to ask, they tell you "I don't know", "it's not my department" or "we never know what's going to be on the truck tonight...", or don't speak English so they kind of just stare at you until you walk away.
My closest store is absolutely filthy; I'm not talking a few dust bunnies under the clothes racks. We're talking real dirt, piles of dust, greasy floors & shelves, etc. I doubt the floors see any water unless someone spills it by mistake. At least half the time when I visit, there are cardboard boxes & pallets of merchanise piled up quite high & lined up along every main corridor in the store; I guess they more or less stock shelves all hours, except when they are closed. It is damned inconvenient to try to manuever around them & I believe many times they constitute a fire hazard. God help them if an emergency evacuation is ever required. People will be stranded & tripping over everything if the lights went out.
You want to see filth? Visit the cosmetic department. Merchandise is strewn all over the floor and/or haphazardly balanced on rickety shelves. Lipstick & eyeshadow containers are open & the contents smeared all over the shelves, displays & floor. Body lotions & potions, bath oils, fragranced liquid body wash, etc. are opened & tossed and spilled everywhere. Almost everything you touch is slippery and/or wet. When it's damp outside, it smells in there. Wal-Marts should consider moving the cosmetic department to the ladies room...
Another poster was commenting about the level of noise in the store. It is awful. Every few minutes, the help screams into the microphones & the noise is echoed by tinny & crackling loud speakers. If that's not bad enough, they're now doing it in two languages. Every TV, DVD player, computer game & radio in the audio department is blasting away. There are huge closed-circuit Wal-Mart televisions hanging from the ceilings all over the store blaring away. By the time I leave the store, my ears are ringing & I'm practically deaf.
There are numerous outdoor birds now live in the store & have been there for some time. I often wonder where their droppings land...I hope they don't fly over the food too often. Oh well, hopefully the birds keep the mice out.
Since many others already voiced complaints about it, I'll skip over the 15-25 minute long lines & disgusting bathrooms that are minus hot water, missing toilet seats, leaking toilets &, of course, no paper towels.
Then there's the carriages. No longer than a year ago, my local store got brand new shopping carts. Right now I'd guess perhaps 10-15% roll properly, move more or less in a straight line, don't squeak like the metal subway wheels do on the metal tracks & don't abruptly come to a screeching halt causing one to run smack into the handle. Don't count on being able to put your kid in the little seat. Most of the child seats are broken, seat belts missing & the plastic bottom parts are missing, cracked or shattered & have sharp edges. I'd guess half the carriages have had an encounter with a vehicle in the parking lot judging by the dents. One good thing, you definitely get a good upper-body workout attempting to push a reluctant carriage around the store.
Just before Thanksgiving I decided to start some Christmas arts & crafts & thought I'd check out Wal-Marts. Silly me, I guess I'm a slow learner. Anyway, I went into the darkest corner of the store in search of the arts, crafts & fabric section which is, in the best of times, not well stocked, unless you're really into el cheapo plastic flowers & greenery. There wasn't a Christmas item to be seen. Curious, I asked the lone clerk if they were going to close the department. That was the only reason I could think of for having almost nothing to sell related to Christmas or merchandise in general. The answer was "oh, the woman who used to work regular here quit October 1 & no one wants to work back here 'cause there's nothing fun to do". Huh?
In the past 4-6 months I have noticed something I didn't think possible. Wal-Marts (& many other "Mart" stores) have always sold some items that are brands no one ever heard of & these items are usually priced accordingly (you get what you pay for). Common things such as household tape, no-name paper towels & light bulbs, etc. When they finally restocked I don't know where they found the items, but the quality had actually deteriorated to a new low, even for Wal-Marts. It's junk, pure & simple. Gives new meaning to the phrase "from bad to worse". I always thought they were pretty much selling the bargain-basement stuff anyway, but no, there's a even lower level & Wal-Marts now carries a complete line of crap.
I began to notice this last fall after the back to school supply stampede was over & the shelves were bare. When the items were restocked, practically all the name brands were gone. Now I'm not a brand snob. I don't particularly care who's name is on most items but I do have one requirement: the product should be comprobable & do a decent job. No way with these "new" items! The brand that has replaced Scotch tape doesn't stick to anything but itself. At home a new stapler fell apart as I tried to dislodge it from it's theft-proof [& probably bullet-proof] protective plastic wrapper. The new light bulbs burned out at such an alarming rate that I've thrown them all away before something catches fire.
At Christmas I purchased a generic box of wire ornament hangers. I never thought to consider the quality (of course they were only selling one brand). Hangers are hangers, right? Everyone uses them once a year to decorate the tree. When I got them home & I went to hang up a small, lightweight plastic ornament the wire was so flimsy that the hook part became straight, then broke into 3 pieces when I tried to fix it. These things were, perhaps, 1/4 the strength of a cheap paperclip (which I ended up using as a substitute). Give me a break! If there is a price increase from the manufacturer, pass the extra nickel onto me instead of using a lousy, less than worthless substitute. I'd rather pay a little more & actually be able to use the item vs bringing an item home & promptly chucking it into the trash.
Sam Walton must be spinning in his grave. How can a successful, world-wide conglomerate with profits in the stratosphere function in such an alarmingly piss-poor way? Have they no pride? If they keep this new "strategy" up, before long, they will have no customers. Or the customers will be those they'd rather not attract.
Everytime I see one of their commercials on the TV I wonder where they filmed the ad. Certainly not at any Wal-Marts in my neighborhood. And, I live in a nice neighborhood. Just once I'd like to shop at the store they show on the TV; it surely must be a television studio set. It's way too clean, uncluttered, quiet. The merchandise is neatly displayed. The isles are free of piles of boxes, obnoxious displays & it appears that two carriages can actually pass each other without practically having to stand inside the cart while the other one goes by. There's a greeter at the door who's under 95 years of age. Must be Wal-Mart Heaven.
At least they've dismissed the rent-a-cops they had standing guard at the door during the Christmas rush. What a joke, Tweedle-dee & Tweedle-dumb at the door pretending to perform some kind of security function. The thieves aren't at the door; they're in the back of the store, using all the boxes piled up everywhere as good cover while they shoplift so much stuff they fairly waddle out.
Give me a break!
PS - to the comparison shopper/author of the original article:
Please be advised that wherever you are doing your shopping, believe me compared to MA you've already got all the bargains you deserve.
Average prices:
Kraft Mac & Cheese: $.79 - $.89 (on sale might get as low as $.60 - $.65)
Triscuit: $3.29 - $3.59 (on sale they occasionally sell for 2 for $5)
There's no such thing as a $.33 or $.50 cent candy bar around here. They start at $.75; a sale is 3 for $2.
Most expensive store: local Albertsons chain called Shaw's/Star Market.
To the person from NH who said prices were consistent in the area: HA!
Quincy MA Stop & Shop: sale on Scott toilet paper, 20-roll pkg $9.99.
Braintree MA Stop & Shop (neighbor of Quincy): same sale, same week, Scott 20-roll pkg $10.99
I wish someone would do an article about why prices are so blasted high in selected areas around the country. And, why businesses (like Albertsons) think it's OK to price gouge. I know. I know. The reason is: because they can.
3-30-2007 @ 4:52PM
RLV said...
It would be interesting to compare Walmart to a Super Target.
3-30-2007 @ 5:58PM
Rita said...
I am a former walmart employee. Walmart does not always have low prices. That's just a gimick. Kroger which is next door to the Walmart that I worked at for the most part had cheaper items. Everyday at work customers would come in so that we could price match their grocery items with the advertisment. I have a family of 5 with one on the way. So I do a lot of shopping around for clothes and groceries. And any little bit helps so it's best to shop around.
Also with walmart they can't keep cashiers. The customers take their fustrations out on the cashiers for no reason what so ever. Cashiers have no control over what something rings up or the fact that the lady in front of you had 50 coupons.
3-31-2007 @ 4:43PM
MrOpinionated said...
WalMart..A real cancer on the American Dream! We stopped going to WalMart 3 years ago,and haven't noticed any real differences. For one thing,our nearest WM is 6miles away. The nearest True Value,Ace Hardware and Shopko are 3 miles away. If you'll be honest you'll figure in the drive time you waste,wear on the car,added gas usage,etc. Plus,you're supporting your real 'local economy','local business owners' that when times get tuff they knuckle down,unlike WM that just closes up shop!I'm totally disabled,but refuse to support the Chinanese worker's state,and others over our own worker's feeding our families! Wake up shoppers. Most,and finally last,WM is selling seconds or remakes,not 'new merchandise'! We bought our first 'new computer' at WM only to find data over 15 yrs. old hidden on it! Button on shirts are much smaller.Often don't stay buttoned.I'll buy defective AMERICAN MADES before I spend a cent at WM! MrO!
3-31-2007 @ 9:43AM
prayermom67 said...
I appreciate that Walmart hires elderly people and those with special needs too. Also, I have worked for an organization and Walmart was a constant donor to this charity for the underpriveledged. I find Walmart to be generally lower in prices, but can find better deals on sale items at other chains.
4-02-2007 @ 6:25PM
Joe said...
Anyone remeber when WalMart used to push "MADE IN THE USA" and actually created jobs in America? Instead of now, where they encourage American comapanies to open up factories in China...
4-03-2007 @ 9:52PM
Floyd Holmes said...
I worked for Lincoln National Life Insurance Company from October 1, 1973 thru January 1979 in Denver, Colorado.
When I left I was told that I was not vested and therefore was not entitled to be credited with the time I served them, nor was I fully vested.
During the above time periods Lincoln National Life Insurance Company had a Defined Benefit Plan in effect.
4-05-2007 @ 6:57PM
Judi Vandever said...
We have 2 Wal-Mart stores here. I've only shopped at the older one, but the employees always treat me almost like family. I shop from the weekly grocery sale paper. I take my list to Wal-Mart and they WILL match prices on everything I want. But...I don't go to Wal-Mart very often anymore. Either there are only 2 available cashiers (out of 20 check stands) or there are several cashiers with way too long of lines. Maybe they should slow down on the building of new Wal-Mart stores and concentrate on the cleanliness, popularity and functioning of already existing stores.