A popular grocery sale item hereabouts is a multiple item sale, where in order to get the sale price the buyer has to purchase more than one item. A typical example is soda, where (for example) you can get 4 twelve-packs for $10, but you must buy 4 to get that price – an individual twelve-pack will cost you something like $3.39.
What’s the point? Why is the store interested in selling more items at a lower profit margin?
My only theory is that the manufacturer or distributor gives them a big enough incentive to make it worth it to the store, but then what’s the advantage to the manufacturer/distributor?
OK, so the buyer may purchase only Coke products this week in order to get the deal, but this kind of deal is offered frequently by all 3 of the major distributors in this area (Coke, Pepsi, 7up). A household that consumes only Coke products will stock up when the deal is offered on their brand, and not typically buy at other times. A household that doesn’t care so much about brands will just buy whatever is on sale. In both instances the amount purchased of each brand over a year’s time will be about the same.
So what’s the advantage to the store and/or distributor for these kind of sales?
Buy requiring you to purchase multiples of an item the store offers you a deal while ensuring that the store will still bring in sufficient profit via volume to make it worth their while?
We also occasionally run deals like that when there’s a mistake in either ordering or delivery resulting in, say, more avocados that we’d normally sell in, say, a month all arriving in one day. It’s either move them out the door or let them rot in the back room. But that’s more for perishable items.
Or it’s a loss leader - the store isn’t making a profit, but they’re hoping while you’re there you’ll buy lots of other stuff, too.
I thought about the “loss leader” business, but it’s a loss leader if they just sell one item for $2.50, so where’s the advantage in selling 4 for $10?
In my particular store, if we’re offering, say, 3 crates of soda for $10, then each crate will be $3.34 each so in my store you don’t need to buy three to get the sale price. Phrasing it that way makes it more likely you’ll buy that many, it’s a suggestion many take us up on.
We still make a bit of money if you just buy one - but corporate prefers you buy more.
That, and if we’re trying to get rid of perishable items (the avocado example) we really do want them out of the store. We might even be selling them at cost, because that’s still more than we’d get for them if we let them rot.
Because selling 4 packs for $10 brings in more profit than selling one for $2.50. What’s the mystery here? Unless you are selling below cost (highly unlikely), you always benefit from selling more.
It’s also possible that they bought too big a stock, and would rather sell them at reduced profit than have them take up space in the back of the store. I don’t think there is much of a “back of the store” in modern stores.
The owner of my local Haggen grocery store confirmed this with me once. He ensured me that whenever they do a “5 for $10!” you can rest assured that the items are $2 each, no matter how many you ring up. It’s just a little psychological trick.
How is that different from a tire dealer offering a free tire if you buy three? You pay regular price for each of three tires, you get the fourth one free. Special price only if you buy the volume.
One of the factors could be that they want to move more units out the door, in order to get a volume discount from their supplier when they restock. The question then is why would the distributor give the retailer a better price if they order a larger volume. Lower distribution cost per unit.
Yes but it also depends, I have seen both sides of this happen. Where you get the per item price as above, or there is a higher per item price charged if you don’t take the offer. Usually it will have some note where you must buy 4 (or whatever) for this price.
That’s true for some stores, but absolutely not for others–and even within the same store both deals can happen. I see it mostly with big brand items–Coke products and General Mills cereals often have this kind of deal at my local store, where the discount only kicks in for bulk purchases. Other 2-for-1 specials are really just half-price items, like you suggest.
I wonder if it makes most sense when there are brand competitions for products with low manufacturing costs.
With Coke, for example, let’s say it costs $1 to make a 12-pack. If they sell a twelve-pack for $3.50, they make $2.50 profit. But if they sell 4 12-packs for $10.00, they make $6 profit, a much better deal for them.
Also, if they don’t offer the discount, folks might choose Pepsi, or RC Cola if they’re around these parts, or maybe they’ll buy milk or juice instead.
Some stores (Safeway, for example) will often require you to buy at least $35 worth of groceries in order to get the sale price. Not all do, but that’s one way to make sure that the store makes money.
The main attraction for the type of sale in question is obvious: you buy four of the thing, not one. How is that not going to be a plus for the store (assuming they aren’t selling the product for loss)?
Some stores/chains are very strict about refusing to price BOGOs and offers with minimum purchase requirements as if each item could be sold individually for the per-item price. Other stores are more likely to allow the odd customer who demands that to get their way.
As said above, this varies greatly by store. For example, Walgreens around here generally has signs that say something like “2 for $5” and then in small letters “or $2.99 each” so they do not mark an individual sale down to $2.50. (I’m looking at a flyer right now, and there’s a sale for Coke 12-packs that says “3 for $12 or $5.00 each.”) My usual grocery store, though, when it says 2 for $5, that simply means $2.50 each. Then there are other grocery stores I go to where some items are simply marked, say “4 for $10,” which means each item is rung up as $2.50, but others in the same stare are marked “4 for $10 when you purchase four” or maybe it’s “must purchase four” and then in small letters “or $3.49 each” (or something very similar.)
An exception: even if the sign says “Must buy X to get the sale price” deals, the store has to honor the reduced price on whatever quantity the patron wants if their stock drops below the specified quantity.
For example, say it was “buy ten cans of Tomato soup for $5, otherwise 99 cents per can” but there were only eight cans left. The patron got the remaining cans at 50 cents each. And they don’t even have to take all eight that were left to get the deal, they could then buy just one can or three or whatever, and get the sales price. (At least those were the rules in the two stores I cashiered in, and I’ve had it happen in my favor in a handful of other stores over the years.)
Really, it only makes sense for a store to do that. Why piss off a customer over the relatively piddly amount of the ‘unearned’ discount?
It used to be that Chicago supermarket chain Jewel didn’t force you to buy 4 of something to get the sale, but this policy changed sometime in the last 5 years for pop, and the shelf pricing signs now say “Must Buy 4.” As someone with no car, I find this really annoying and buy pop somewhere else.
Hunh. Around here, the grocery store charges an outrageous amount for a single 12-pack, like $7 or $8, then has a sign saying “buy 2 get 2 free.” And they market this as a “sale.” :dubious:
So, if I want a single 12-pack of soda, I have to get ripped off. If I wish to pay what the price should be, I have to get four of them. Either way, they make more money.
Raley’s is one place where you normally can get the deal even if you buy only one. Some places explicitly state it: “savings only with multiple purchase” or similar. 7-11 requires you to buy multiple.
A typical item here is chocolate. Where I think they figure, if you buy more, you’ll eat more. Not like toilet paper, where if you buy more today, you’ll buy less tomorrow.
Soda is the big one. The lemonade we often buy at Jewel may say 2/$5 but it’s $2.50 each. The soda sales sign explicitly says “4/$10 – Must buy four”. For what it’s worth, the same sign is at competing grocer Tony’s so I assumed it was a condition imposed by the distributor.
Really, all it does is ensure that I don’t buy soda since I can’t get a single pack for $2.50 and don’t want/need four packs in my house.