Wednesday, October 03, 2007

Why won't Wal-Mart price-match another Wal-Mart?

It's turning into Wal-Mart 101 Week here at BTC. A consumer affairs segment on a Tulsa TV station ran a shocking expose on how one Wal-Mart won't price match other Wal-Marts - or walmart.com for that matter. Watch the video here. via Consumerist

Normal, intelligent, I-don't-shop-at-Wal-Mart (and wouldn't if you paid me and held my first-born hostage) human beings might have questions about this policy. After all, aren't the prices for cheap plastic crap controlled (just like the temperature and lighting in the stores) from Bentonville? And shouldn't it be the same from one sterile big box to the next?

Not exactly.

The base price for items does indeed come down from on high.

Then, prices are then checked against those at competing retailers within a certain geographic area (it varies by store and by market - ours is five miles because we have at six Wal-Marts in town).

Let's say the base price on Wal-Mart light bulbs was $1.60. If there is a Target within five miles selling the exact same light bulbs for $1.50, Wal-Mart marks them down to $1.48. If there's no competition, the light bulbs remain $1.60.

Our store has the issue of "Why don't you price-match other Wal-Marts" all the time. We have three Publix stores, an Albertsons, a Kash-n-Karry and a barely-hanging-on Winn-Dixie within five miles of us. Our grocery prices are somewhere below the floor because of all the competition. But there's no general merchandise or hardware store within our competition area - other than a Dollar General and a CVS drug store. Thus, no reason to discount toys, coffeemakers, tools, garden supplies, etc.

The Wal-Mart Supercenter across town - the one we get asked to price-match ALL THE TIME - has a Target right across the road. Another one of the regular Wal-Marts we get price-match requests from is less than a mile from a Kmart and a huge Bealls.

Those stores are dropping prices in response to sales at Target and Kmart. They are most likely taking a loss on a $10 coffeemaker to get you through the door of the Wal-Mart (and not the Target or Kmart) in the hopes you will buy something else.

The prevailing thought (if you apply that term to the logic coming out of Bentonville) behind the certain-stores-will-mark-down-certain-things strategy is that, essentially, consumers are lazy.

Wal-Mart's "saturation" plan can include as much as one Supercenter every five miles - thus limiting the amount of pavement the suburban hausfrau has to drive over to get her milk, bread, eggs and bad Metro 7 fashion. If you only ever go to Store A, you won't know that store B has coffeemakers on sale $10 cheaper.

11 comments:

Wry Exchange said...

Oooh, price-checker for Wal-Mart sounds like a fun job. Do they just check the weekly ads, or do the poor workers have to take a clipboard with a bazillion page list?

Anonymous said...

The department managers go to the other stores with the Wal-Mart PDA and scan UPCs at the other competing stores and note what the price is. Lather rinse repeat for everything in the department.

If they are caught by the workers at the other store, they simply leave without identifying themselves.

This is completely legal because prices are facts, and don't fall under copyright. The other store can simply ask the Wal-Mart employees to leave, and charge trespassing if they don't.

Anonymous said...

I work in the back of my sotre, I am the dsd receiver/grocery reclaimations/secretary/ whatever else. I just have to say you have my respect for working in customer service there is now ay I would do it. Heck I would be shooting some customers, and some mangers for even allowing these idiot customers to bring stuff back after years of use or that WE DON'T EVEN SELL!!!! Hang in there and thanks for what you do.

BitterEmployee said...

I don't see why Wal-mart is getting all the crap for this reasonable policy because we do the same thing at Target. Granted, the sale prices are the same across the district, but base prices and clearance prices can differ from store to store, and we don't price match other Target stores or Target.com either.

I don't see why people get so upset about this, it makes total sense.

Keep said...

Fascinating! Although I figured all stores do this- we've been known to hold off buying something at one Walmart, because we'd be going to the next town over and that one always has it cheaper.

Andrew said...

Why do price-checkers have to sneak around like that in the US?
I used to work at Woolworths in Australia and we would have reps from all the other supermarkets around town come in with there PDAs.

Not only didn't they have to go Ninja, they signed in and out of the visitors book at the front desk and got a visitors sticker in case they were injured.

The ACCC (Australian Competition and Consumer Commission) would flip out and fine the company into last century if price checkers were chased out.

Anonymous said...

Other reasons would include differences in costs where the stores are. How much is the rent/lease/cost of the building the store is in, how much are the property taxes, how much are the utility and insurance costs.
Not all stores pay their employees the same, there is a base and then it's adjusted for the local area.

Lot's of variables, and it's nothing new....just business.

Anonymous said...

I ran into this just last month. I bought a tv from Walmart , because they were the cheapest. Then exactly 20 days later K-mart had the exact same TV fro $80 less. I brought in the receipt and the ad, I also verified that K-mart had the tv in stock. I was told by customer service that the ad had to be within 7 days. But your return policy is much more than that I argued. I also told them that I could return the TV then go to K-mart and buy the exact TV which they were holding for me. I just got blank stares. So I did just that. I went home packed up the TV in all the original packaging bourhgt it back. Went to K-mart bought the exact same TV and pocketed $75 after tax.

Mark said...

A customer service oriented company would honor the difference, so long as the customer has proof.

What really concerns me is Wal-Mart's joint venture with China. My organization, Wake Up Wal-Mart, issued a report that is very scary.

They don't monitor closely enough what's coming from places like China as much as they should. With more than 70 percent of its goods coming from China, they better start paying closer attention or expect more dangerous products to be on the shelves.

agent713 said...

That is fascintating! The things you learn here :)
~Heidi

Joel Maners said...

What I was shocked at was how Walmart's prices are sometime a bit lower than Sam's. Last year I picked up a copy of a book for my wife at Sam's. I ran over to Walmart to pick up a couple of things that Sam's didn't have and I just happened to look at the price for the same book. It was about 50 cents cheaper. Unreal.