Special Deals at Whole Foods
Jared Wolfe, one of the students working with me, took the following pictures at Whole Foods a few days ago. They illustrate amazing creativity in defining what the term “a deal” means.
1) Regular price is $1.99 and the Sale price is? Two of the same item for $5 — which according to Whole Foods’ quick calculation is a savings of $1.02. Amazing.
2) Regular price is $3.99 and the Sale price is? $3.99 — thankfully this time they did not add any amount to the savings.
What I am wondering is how many people just look for the orange tags and the Sale signs without even looking at the details. I suspect that this is very common, particularly in a busy and hectic grocery store and particularly when we buy many items that each of them by itself is not very expensive.
The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
How many people who pick up on the 2 for 5 “deal” will actually not buy the product if they had intended to prior to knowing the inconsistency? I would buy it and just make a mental note that my suspicion that whole foods = whole paycheck is valid.
I always check the individual item’s price and compare it against other offerings. In Australia we have compulsory per 100gr price on every food item applicable which helps too.
@Ergun; there’s no reason to believe that Coles/Woolies/Aldi wouldn’t routinely ‘misprint’ a shelf label with wrong information, often it would go unnoticed, most customers wouldn’t even bother to go to the service manager, but just skip the dubious ‘discount’.
the price/gm is a huge step forward in saving money and comparing product value, but I have seen several examples where even that information was misprinted — also, the mixed weights they use are somewhat deceptive ($/100gm, $/kg, $/item in multipacks, $/l). IGA hasn’t even looked at these, probably because they realise they would loose more than they gain from providing this service. I imagine many manufacturers are already working on techniques to sidestep this comparative pricing data, such as adding water to cans/jars, using heavier packaging materials, putting more filler ingredients, etc.
Is this even legal? It’s clearly either a mistake or a blatant attempt to confuse customers.
Unfortunately, this practice is very common among many retailers. The blog Consumerist has featured upside down “deals” and “price cuts” for several years. Here’s a few examples:
http://consumerist.com/2011/05/target-redefines-price-cut-to-mean-price-raise.html
http://consumerist.com/2009/02/walmart-and-by-save-even-more-we-mean-weve-raised-prices.html
http://consumerist.com/2009/02/how-a-sale-works-at-target.html
http://consumerist.com/2010/04/study-walmart-price-cuts-are-actually-price-hikes.html
http://consumerist.com/2009/08/target-charges-you-more-for-free-bonus.html
Yes, this would not be legal in Australia.
I´ve was going to a ski resort in Sweden and a similar offer in the skipass pricelist.
The essential is that if you buy a variable skipass (You can use it 2 days of 4 in a row). It activates a day when you pass the gates the first time for the day, but still it can only be used for 2 days. The price is 76 Euro. It´s supposed to be a good deal if you´re having 2 restdays on a four day vacation.
If you buy a singleday skipass the cost is 36 Euro. And for 2 days it obviously 72 Euro. Any 2 days that season.
I wonder why anyone would buy that variable skipass?
It´s not as obvius as your example because the prices is specified in to different pages!
Variable pass
http://www.skistar.com/en/Are/SkiPass/Our-Ski-Passes-and-prices/Variable-SkiPass/
Regualar pass
http://www.skistar.com/en/Are/SkiPass/Our-Ski-Passes-and-prices/Prices-SkiPass-Are/
Dan,
No doubt you’re familiar with Robert Cialdini and his work on influence. I’m one of his trainers and during our workshop I cite a study done on the familiar yellow tags that say, “Everyday Low Prices.” Sales double on items where the tag was used but the price was not changed. People use that as a trigger and naturally think they’re getting a better deal than normal. With that in mind, your post today doesn’t surprise me at all.
One more thing I’ve seen on personal level. When dining out I frequently hear, “Would you like to try X beer, it’s our specialty beer this month.” When I ask what the special is (2 for 1, 16 oz for the price of 12 oz, etc.) I usually find out there’s no “special” it just happens to be the featured beer of the month or week. However, I’m sure many people order it under the assumption they’re getting a deal.
We have lived in the Us 6 years and still my wife can’t get her head round when they offer 2 for $5 you can buy 1 at $2.50, so consequently she always buys two. In the UK it wasn’t done that way, the deal usually meant of yoiu only bought 1 item you paid the regular price.
I have noticed though that our local Publix are always putting ‘For Sale’ in red on items that aren’t reduced. It seems pretty underhand to me.
Tim, did you try to talk to the manager of Publix and ask him this question? and if his answer is unsatisfactory, call the corporate office (http://www.publix.com/contact/ContactUs.do) and tell them that you are concerned about this particular practice in this particular store and would like someone to clarify what’s going on. Take the issue into your own hands, become proactive, and you may be amazed at the results (which will most likely come with a gift card in the mail from Publix). Publix has no reason to look into the issue, in fact they don’t even know it exists, until you, their customer, tell them about it.
Look at these recent news:
http://www.energypublisher.com/a/BRLUNBECEI29/66178-GoDaddy-changes-stance-on-SOPA-after-customers-bolt
where customers of very large internet corporation have forced it to change their position. Do you think it would happen if everybody remained silent? If you want something changed, then it’s nobody but you who has to initiate the change.
I would like to say that people are good at maths, but they really are not, when I worked at blockbusters, we had to sell ice cream, the promotion was “ice creams 50%off” and I was doing sort of ok, so I decided to word it “buy one, get one free” and I made top salesman that month. It was the same price per unit. But people know that free is a good deal, while 50% of something still equals I have to pay.
@Mr. Flores the 50% off is a better deal, you only need buy one item, so I can see why your sales improved when people started buying double the number of icecreams. though I conceed there may have been a subconscious advantage to using the word ‘free’.
You are right!! 50% off is the best option, but then we get this options everytime, for example the buy one and the other one is half price, you are effectively getting a 25% discount, but 50% off is more attractive than 25% off even though you end up paying more money.
I love the mixture of metric and imperial measures … 454 g of mushrooms (packed) for 2.49 and 2.99 per pound loose. I have a “skeptical” alarm that goes off with “deals” and I see this quite often.
Its also common to find larger packs more expensive than smaller packs per unit. Its amazing to learn the “games” retailers play when you do the household shopping. It should be a mandatory activity for economists.
It’s impossible for me to escape WF without spending $200. Therefore, I don’t care anymore. I’ve probably paid $100 for an orange a few times; conditioned to take the abuse.
I usually go to market with the calculator …. finding always cheats in the toilet paper section ….. of the same brand!!!!
Spain is not different.
The key is always the smaller print on the regular tag– how much per oz, lb, etc. However, I do notice errors even there sometimes (which is easier to see when comparing, say, three types of crackers by same company). I tell my spouse to never just get what’s on sale– always look at the breakdown on the tag (but double check the logic).
My local regional health grocer sometimes has errors in the small print– but think it’s born out of confusion (data overload plus general populace problem with numbers– esp noticing errors) rather than a nefarious plot to trick customers.
I do think it’s fair for grocers to vary how they present prices. Having worked produce for a co-op, know that sometimes have to price things by the each or by the pound in order to carry an item successfully. (reminds me of the killing to save others train conundrum– weird how same choice differs with presentation). Don’t think would consider trick sales part of that strategy, however.
This is clearly a mistake – the “2″ should have been a “3″, which would then equal the advertised savings. My guess is that if a customer pointed it out, Whole Foods would have adjusted the price. I recently ran a few errands, stopping at Target and Whole Foods. My husband called to ask me to pick up 5 pounds of sugar. I didn’t want to make an additional stop, so I bought it at Target, thinking it would be more expensive at Whole Foods. Wrong! The same bag was 50 cents cheaper at Whole Foods, and it was not on sale. It’s a challenge when our minds are multi-tasking and we’re in a hurry, but it really does help to be aware of prices, and to speak up when a “deal” really isn’t! I’ve found most merchants to be quite accommodating.
3 for $5 vs 3 for $5.97 is only a savings of 97 cents.
I think it was actually a savings of -$1.02 and someone missed the fact that it was higher.
I think it’s just a case that many people just can’t do mental arithmetic or are just too lazy and clever marketeers see that. Good luck to them if we’re too stupid to pick up on these matters.
I’ve seen that other stores too, including Walgreens, and I agree..I think people just look at the ‘sale’ signs and do not take time to look at/ calculate the monetary benefit (if any) that they are receiving.
I am one of those unfortunate people who gets immediate sensory-overload in the grocery store and walks through in a daze trying to get out of there as quickly as possible. Being gluten-free means that I always look for little tags with extra information, but I don’t often process them as much as I ought to. Thanks for the “food” for thought.
I once confronted a store manager about a deal like this, insisting that they ring up my two items as distinct individual items. He refused, and I told him nobody was going to buy more than one at a time, then. He proudly told me that tons of people buy in pairs because of the “deal”, and they all think they are getting a bargain, so who am I to spoil their happiness.
@ Ergen Although indeed such practices are illegal in Australia, alas labeling foods as local when indeed they are not has been going at Coles and Wollies for way too long. Perhaps this is a discussion for another place and another time, but such a deceptive approach deserves recognition: http://www.theage.com.au/business/supermarket-food-labels-mislead-shoppers-20111225-1p9ld.html
That’s pretty bad. I’ve frequently sees sales where a smaller item (say, four batteries) is on sale, but a larger item (say, eight batteries) is not, and it’s cheaper to buy an equivalent quantity of smaller items than it is to buy the bigger item.
When you think about it, Whole Foods’ 2-for-$5 pumpkins are the same thing as the smaller pack of batteries being on sale, but not the larger one. But I think most people are horrified by the pumpkin scenario, whereas we’re more used to the batteries scenario.
I’m sure this is simple mistake rather than intentional deception. The particular employee who calculated the discount pressed wrong button on the keyboard, that’s all.
And we indeed don’t notice it – first of all because it’s uncommon and we usually don’t scrutinize this particular aspect of the price. Second, because a customer, I look at the final price and compare it to the price I perceive as fair – such as what I paid for this or comparable product in the past, or what I paid in other stores. I could not care less about what the store calls “regular” vs. “sale”. In fact I probably wouldn’t even notice it.
Another trick: The sticker says $2.50 per cantaloupe and right beside it is a yellow sticker with bigger font that says 2 for $5!
My first job was in a grocery store in the late 80s. I worked there off and on for several years, working my way up to low level management. This sort of stickering technique was a pretty common tactic even then. We’d often have an item on sale one week, the next week it would go off sale at a higher than its original price, but the new sticker would be a larger, hanging sticker that seemed to imply a sale price that didn’t exist. It’s dodgy, but Whole Foods is using a pretty tried and true grocery pricing technique.
I find it ironic that often times it is cheaper per unit to buy regular products than it is to buy the more “economic” family sized items. People tend to equate buying in bulk with economies of scale. So if you buy the family size it must be cheaper per unit than buying 2-3 regular sizes. But that’s not always so.
It only show how much power have the little word “Sale”. People always look for it and most of them not even check if it really a sale or not. like you buy sometimes things you don’t really need. It can be a good idea for to check in numbers how many people saw that mistake or don’t even put attention for that and took it because the sticker.
We had a Panorama programme on UK TV the other day all about this… and I couldn’t help feeling sorry for the Supermarkets who are surely allowed to make a few mistakes from time to time?
I sell beer to whole foods and know that these stickers are put up by individual store category managers. They are suppose to be Corperate wide but each store carries different products and for beer you have to constantly be checking and requesting sales tags on a per store basis. These are probably mistakes made at a store level but still have an effect on purchasing. For beer our sales jump 50% – 100% (and sometimes more) if we go on sale. It doesn’t matter if we reduce the price $5 or $0.25. All that matters if there is a sticker on the shelf that says sale. Dan, if you are interested in doing pricing studies with beer (or any other studies with beer, I know you have in the past) please let me know. We would love to work with you. We are always interested in what drives consumers decisions.
Makes sense to me …
2 at sale price : $5.00
2 at regular price: $3.98
Total savings = $5.00 – $3.98 = $1.02
You save $1.02 by NOT buying on sale! Great deal
great deal
He proudly told me that tons of people buy in pairs because of the “deal”, and they all think they are getting a bargain, so who am I to spoil their happiness.
Maybe it would be interesting to do a study of whether believing these tricks depends on the age. I personally have found that the process of getting older in large aspect means becoming more and more cynical. Such as, if 10 years ago “20% off” generated in me a positive interest, now I immediately notice that there’s no information about “off what?”, and this fact alone immediately labels this firm as scammer. In fact, I think I’m at the point where pretty much any advertising material I see, scores not positive but negative points for the product or the company. I think it could be interesting to find out how widespread this approach is, and how it depends on the parameters like age, education, income, ethnicity etc. I can imagine that it could reveal for the companies that when they invest in advertising, they actually hurt their sales – at least in some markets.
Indeed, Special promotions and sales vary by location. I usually look at the product’s prices and of course compare to other offerings.
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