From: Subject: Date: April 21, 2005 3:53:51 PM CDT Hankblog

Tuesday, March 08, 2005

The Wal-Mart myth

My DD links to this article from the International City/County Management Association about the impacts Wal-Mart has when moving into a community. The part that My DD excerpted I found quite interesting:

How does the number-one retailer maintain an image of low prices? First, by actually making sure its prices are lower than its competitors, at least on key items. These items are called "price-sensitive" items in the industry, and it is commonly believed that the average consumer knows the "going price" of fewer than 100 items. These tend to be commodities that are purchased frequently.

A mid-size Wal-Mart supercenter may offer for sale 100,000 separate items, or stock-keeping units (skus). Wal-Mart and other major retailers believe that the general public knows the going price of only 1 to 2 percent of these items. Therefore, each Wal-Mart store shops for the prices of only about 1,500 items in their competitors' stores. If it is ever found that a competitor has a lower price on one of these items than Wal-Mart, the store manager will immediately lower his or her price to be the lowest in the area.
Read the whole thing. Interesting. And it makes me feel better about trying to avoid Wal-Mart at all costs and know that I'm not really costing myself that much more to do it.