In the face of rising commodities costs, 99 Cents Only Stores (NYSE: NDN) has been forced into raising prices -- a difficult proposition given that the company's founders didn't take into account inflation when giving the company the name that has stuck with it for the past 26 years.In a rambling press release, CEO Eric Schiffer announced that "In response to dramatically rising costs and inflation, 99¢ Only Stores® is forced to raise its price by almost one full penny to 99.99¢, which is still just below a dollar."
Except that, no, it really isn't because U.S. currency does not come in denominations of less than 1/100th of a penny, and 99 Cents Only Stores will be rounding up. Depending on how it calculates the rounding, consumers will have to buy either 50 or 100 products to realize the savings from the 99.99 cent price point versus the $1 one.
I understand that 99 Cents wants to stay true to the name/motto, but this is pretty lame. Why not just raise the price to $1 and not insult people's intelligence by claiming that this is something other than that? It's intellectually dishonest to say that 99.99 cents is different from $1, because almost no one will spend enough in one visit to realize the savings.
Why do we have a weak dollar?
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Reader Comments (Page 1 of 1)
9-09-2008 @ 11:03AM
Raptoraddict said...
Gas has sold for $XXX.9 for ever. So now that the 99 cents store is charging $0.9999 instead of just $0.99 the author calls it dishonest and almost has a heart attack. What a non story. I guess it must be a little slow today huh!
9-09-2008 @ 10:05PM
dave said...
Zac, since when can you make a statement "almost no one will spend enough in visit to realize the saving". I have shopped there for years and I save even I just buy one item! Example, I get Doles prepack lettuce for "99 cent" (now .9999) while at a regular store it is 3.50 or more (sometimes on sale for 2.50). Saving? You bet. Brand name hot dogs 99cents , avg. $4.00 in store. Give me a break about savings.
9-09-2008 @ 11:51AM
BILL said...
Why do they use 99.99 .99 2.99 etc. who do they think they are fooling. A penny cost more to mint than it is worth. Discontinue this 99 mania and round it off.
9-09-2008 @ 4:45PM
david said...
i have triplet girls who are four years old and i am a big fan of the store. the extra penny certainly is not going to affect my spending there but if it keeps the store in business, i am all for it.
btw, i am not insulted by the price being raised to 99.99 cents anymore than i am insulting by gas prices being $309.9.
9-14-2008 @ 12:04PM
mister said...
Brilliant business move. They do not have to change the logo, signs or advertisements.