Why Price Matching May be Ruining Your Grocery Budget

Price Matching

What?!?!  GASP!?!?  Yes, I’m going there.  I know, you thought you found the perfect alternative to couponing.  You’re saving hundreds of dollars… or are you? {Please note, the following post is based around more than a decade’s worth of pricing analysis and experience in the Southwest Missouri region.}

I’ve been putting off writing this post for a while now.  If you’ve taken a class, you’ve heard my spiel on why price matching isn’t always the best solution.  If not, pay attention! 

Before I shatter your world… or you just pretend that I’m wrong without doing any further research on the topic, I want you to imagine this:

You own a small business.  You work extremely hard to provide great customer service and competitive pricing.  You put out weekly sales and advertise them to the entire community.  You may even take a loss on some sale items, but you want customers in your door so that you can prove your worth.  You buy excess inventory so that everyone is able to take advantage.  Then no one shows up.  You’re stuck with the inventory, you wasted your money advertising,  and your books took a huge hit.  Your next sale won’t be as good, because you’ve got to offset the losses.

Now, let’s imagine you own a large business.  Instead of spending your money advertising to provide discounts to all of your customers, you only offer them to a select few who take the time to ask for them. {That’s called Price Matching}

To offset the difference, your prices on unadvertised items raise.  The prices are less than competitive, but no one realizes it.  Why?  Because they’ve got the price matching bug.  They think they are saving a fortune!  It’s definitely marketing at it’s finest.  The little guy is running your ads and sales, and you only have to give them to the customers that request it.

Here’s the truth:

1.  You aren’t in on any top secret deals… you’re getting the exact same deals you would if you shopped elsewhere, but you’re missing out on some very important discounts, such as manager’s specials, markdowns, and grocer pricing.

2.  You may even think you’ve found a solution that allows you to skip looking at the ads.  Woohoo- you’ve saved yourself three minutes and cost yourself a fortune.  I’ve been monitoring a couple of price matching websites that focus on local stores.  They are leaving out some of the best deals and posting some of the worst.  Over the past few weeks, there have been dozens of items that were priced well BELOW my stock-up prices that didn’t make the list.  And there were others that were actually priced much higher that did.

3.  You sure showed them… you saved on your cereal, but your milk cost $2 more.  Several local grocers offer regular prices that are MUCH less than the big box store that price matches.  You can’t take advantage of those prices because a.) you have  no clue they exist because you won’t go elsewhere; and b.)  they aren’t advertised.

You’re probably paying $1 more for your bread, $1.50 more for sugar, $1 more for flour, $1 per bag of chips, $3 per container of cottage cheese, $1.50 more per dozen eggs, and your produce is more than doubled.  Don’t forget about things such as pet food, cleaners, paper goods, and even wine!  They are all usually cheaper at a grocer… except Price Cutter, very few things are cheaper there and the quality is a whole ‘nother story.

4.  There’s a possibility that you’re making prices raise for your next shopping trip.  Prices are always rising and there are so many excuses, reasons as to why that’s happening.  From a business owner’s standpoint, I tend to believe that price matching  may have something to do with it. 

We have a lot of small, locally owned stores.  If they are stuck with a ton of inventory from a sale, they’ve got to offset that loss somewhere.  The sale might not be as good the next time around.  Some stores have even went as far as changing the unit of measurement so that the items aren’t price matchable.  In order to price match, an item must be sold in the same manner.  You may have noticed that some stores are now pricing produce by item instead of weight.  Some are bundling them in odd package sizes, such as 4 packs or 20 ounce packages.  This may be an effort to combat price matching.

5.  But you’re saving soooo much time, right?  Wrong.  I can drive to Springfield, do my shopping at a grocery store, and be home before I’d ever even find a parking space at my local big box store- much less the amount of time you wait in line!

6.  Your health may depend on it.  Did I really just say that?  That’s so dumb… but I’m right.  I’m going to just touch a bit on this, as it’s the subject of an upcoming post.  The layout of a store has a very strong influence on your purchases.  Many grocers are laid out so that you spend a larger portion of your budget on fresh meat and produce.  Many big box stores are set up so you spend your budget on prepackaged and processed foods.  It’s all in the layout of the store.  Start pay attention to the items you buy at different stores and how the layout affects your purchases.

7.  Impulse, impulse, impulse.  Sure, you went shopping for groceries.  You came home with groceries, and flip flops, a toy, a few art supplies, a new outfit, a futon, three novels, a video game, a lava lamp, a pillow, two candles, and a bicycle.  Okay- that may be a slight exaggeration, but you know exactly what I’m talking about.  If you don’t see it, you don’t buy it.  If you don’t buy it, you’ve still got your money.

So, Alicia, now that you’ve finished your rant, do you mind telling me if there are any good things about price matching?

As with anything, moderation is key.  You have to value your time over money.  If it’s worth spending more to avoid driving 5 miles out of your way, go for it.

There are a few circumstances when I feel it’s okay to price match.  Remember, this is just me, and I see all of this from a completely different perspective than the average consumer.

1.  If it’s a store that you have absolutely no intention of visiting.  These stores run sales to get you in the door so that you become a regular customer.  There are so many mom and pop retailers here that aren’t within a reasonable drive (30+ miles).  If it’s not feasible to do your business there, it doesn’t hurt as badly to ‘stick it to the big guy’.

2.  If you want to buy a large quantity of an item.  Remember, a lot of the ridiculously low prices are actually costing the store money.  They can’t afford for you to buy dozens of an item.

3.  If the quality is subpar.  One of the finest examples of this is Aldi avocadoes.  They often run them for 29¢, but they are the size of golf balls.  The big box stores will match and have much larger, fresher ones.

4.  If club points are required for purchase.  Often times, you may not have enough points accumulated to take advantage of a special deal.  Big box stores will match the price without requiring points.

5. If the advertising store is known for not carrying a sufficient quantity of the advertised items.  There is a local chain that has locations that don’t even stock many of the items in their ad or provide them in extremely limited quantities.  If that’s the case, it’s quite reasonable to match their prices elsewhere.


 

To sum everything up, there are some instances where price matching can save you money… but it’s no special, top secret technique.   You’re simply purchasing items at sale prices.  This method has been around for decades. 

Remember, I’ve been doing this a very long time.  I am fortunate enough to see the benefits and repercussions from several sides.  The bottom line is that it’s your job to do what you think is best for your family- but it’s my job to provide you with the information to make the best possible decision.

As with any method of saving, you’ve really got to pay attention to make sure you’re really saving  money.  The best way to do this is to price the items you typically buy at several stores to see who routinely offers the best prices.  You might be surprised! 

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