Everyone likes to pay less for groceries. Supermarkets can often be expensive and so many of us have turned to Target or Walmart to snag some cheap grocery deals. The prices are good on many items and you don't have to pick off the loss leaders or use coupons to feel like you got a deal. But a recent trip to Target left me shaking my head. Some Target grocery prices just don't make sense; they are illogical and dare I say "wacky".
Cheerios 29% More for 34 Cents Less?
Cheerios is the breakfast cereal for millions of households. For those of us who worry about our waistlines, it's an essential staple. Target has decent pricing on Cheerios, $2.89 for a 14 ounce box. But you'd be a sucker to buy the 14 ounce box because the regular price on the 18 ounce box is $2.54. Their pricing just defies the laws of rational thinking. Who pays 35 cents more for less cereal? Why would anyone ever buy the 14 ounce product? I could understand if the 18 ounce box was on sale, but it wasn't, this was regular pricing. Maybe it's some kind of penalty for those of us that can't the larger sizes in our munchkin kitchen cabinets. More likely, it's a savvy marketing tactic that takes advantage of consumers that grab the 14 oz box off the shelf on the assumption that the smaller box must be cheaper than larger boxes. Somebody must be buying a whole bunch of the 14 ounce boxes because Target's business model is to move products of their shelves.
OJ: Shrink-Rayed Larger Size a Rip-Off
We've talked about shrinking products before and I'm not going to belabor food manufacturer's that down-size their products. But if there is one golden rule consumers take for granted is that bigger sizes should have lower prices per unit. It's kinda like the law of gravity for shopping - the volume discount you get for buying big. Sometimes the golden 'volume' rule is violated when the smaller size goes on sale. But when comparing regular prices - the bigger volume unit should sell for a discount. One product that defies the golden rule is orange juice and not just at Target. The old 96 ounce jumbo size of Simply Orange or Tropicana orange juice has shrunk to 89 ounces. But the price hasn't shrunk with it. In fact, it's actually more expensive. Target prices Simply Orange at $3.29 for 59 ounces (5.5 cents per shrunk ounce) and $5.34 for 89 ounces (6.0 cents per shrunk ounce). Your reward for buying the bigger container is a 7.5% penalty. Maybe they think too much vitamin C is bad for your health. With Tropicana it gets even worse because they haven't shrunk the 64 ounce size. Buy big and you'll cough up 10% more per ounce. How many families still think that they are getting a volume discount when they reach for the big size? To give the correct answer, all you need to know is that Target never stocks products they can't sell in huge volumes.
The Expensive 2 Liter of Soda
It used to be that 2 liter bottles were the most economical way to buy soda. At one point in time, soda manufactureres market tested 3 liter containers but that was short-lived. Even the old six pack has gone out of style making way for the new 12 pack standard package. Now given all the effort and expense of manufacturing aluminum cans and then packaging them in a box, you would think that an ounce of soda from a 12 pack would command a premium price over an ounce poured from a 2 liter plastic container; and you'd be wrong. The 2 liter (67.6 ounces) of "Premium Soda" at Target is downright expensive and it rarely goes on sale. Plan on forking over $1.59 to $1.89 for 2 liters. Without even factoring in the waste element - soda swiftly goes flat if you don't use up the whole bottle - you're still paying a hefty premium. The 12 pack which should be more expensive can be had for a paltry $2.50 and even as low as $2.00 for some brands. At $1.59, the big bottle is costing you as much as 69% more per ounce than its aluminum draped cousin. But out of sheer habit and consumer conditioning, many shoppers still reach for the 2 liter bottle in the mistaken belief that it is their cheapest option.
Another oddity that you can see at many stores, is that the 12 pack is often regularly priced less than half of the price of a case. Another pricing scheme that defies all logic.
So why does Target price their products this way? My guess is that they know their consumers more than their consumers know themselves. Over time, most shoppers become conditioned to buying certain 'optimal' sizes and neglect to pay attention to unit cost. For Target, and other retailers, those consumers are incredibly profitable.
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