Spreading the word about superior purchasing deals

17Oct12

There’s a particular brand of cottage cheese that I really like. For years, I’ve paid around $4.50 for a large container, exempting the occasional sale. So when a grocery store near me cut the regular price to about $2.50, while other places continue charging $2 more, I began buying all my cottage cheese there.

This pricing disparity made me wonder: how could one store afford to charge more than 40% less than the others? Surely the margin isn’t anywhere near that big. Thus, my guess is that the store near me negotiated a vastly better deal with the supplier, perhaps agreeing to purchase an enormous amount of product every week in exchange for far lower per-unit prices than other buyers in the area are paying.

If this is the case, the retailer could even go one step further, and tell customers the reason why the price is now so much lower than before. I’ve actually seen similar messaging in flyers from another grocery chain, where they explain how they’ve managed to keep prices low or reduce them over time. Granted, not all shoppers will be interested in the story behind low prices. But those who pay attention to the changes in pricing over time will be eager to learn some of the rationale behind this type of price reduction, and will think highly of a retailer that’s always pushing to keep groceries affordable.



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