Is “Low Prices” losing its meaning?

22Apr09

Some retailers have been touting their “Low Prices” for years, and generally the claim seems to be true. Those who position themselves on something besides price alone tend to emphasize product quality, personalized service, and other factors. But lately, I’ve been noticing more full-priced stores touting a somewhat misguided low price message.

Take Staples, for instance. Do they sell high-quality products? Sure. Good service? Yeah, the staff are usually quite helpful. But low prices? Well, not really. I’ve seen products in the local store that cost almost 40% more than the local Walgreens or CVS (which aren’t exactly known for low prices themselves). And the Staples house brand doesn’t seem to offer any bargains either.

This raises the question: does a store have an obligation to back up its low price claims by selling a basket of goods for less than some accepted benchmark? I doubt there’s any law or regulation requiring it. But touting low prices when that’s not really your thing creates a disconnect for consumers. When a store proclaims that it offers low prices, people expect to be getting a good deal, and may even purchase some things at surprisingly inflated prices without noticing. This may drive margins higher in the short run. But eventually they’ll notice the ruse, and cut back their spending at the stores in question.

Ultimately, people will lose their confidence in low price claims, and the phrase will become meaningless as a positioning statement. After all, if everyone promises low prices but there’s no consistency in who actually delivers them, consumers need to look deeper to determine where the best values are.



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