• filter:

Cost plus pricing model doesn't make the cut.

  • Page :
  • 1
  • Text Only
  • Search this Topic »
My OP here discussing Cost Plus price models at grocery stores got archived:

Just wanted to post a quick follow up for anyone interested.  That store is going out of business - just got back from buying a bunch of low price clearance items further marked down another 25% (plus no additional 10% at register).  This was the second of their stores that is closing in the past week.

Strangely enough even with 25% (technically 35%) off the prices most of their merchandise was still not competitive with Target or Walmart pricing.

They claim they are going out of business due to continual price wars....but even with some of the higher prices they couldn't manage to stay afloat.

Not sure if that says something about their poor ability to run a business or if the Supercenters of the world really just crush the little guy out of submission.

I will miss the convenience of the quick trip and their low meat prices (not the best quality meat anyway).  Now just to wait to see what opens in its place...

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

My son owns a business and just bought out a similar business which will add about 8-10%. During negotiations, my son found out the "little guy's" product cost is about 50% higher from the same vendor. Tough to compete in a cost-plus world that way.
PS: Little guy's business was/is doing just fine because if incredible customer loyalty fueled by his very personal service (that sounds bad). He just wanted to retire.

The secret for really low prices is something we as customers can only get inferred from business publications... The business ability to buy wholesale from the factory at the lowest price possible (almost always bypassing any middleperson).

The Wally's and Bullseyes of the world in easy to supply areas of large enough countries, like most of the USA, can succeed at wringing co$t$ from manufacturers of whatever. It's what makes them sustain longer against the "Amazonian online wave". Smaller businesses on easy to supply areas have to rely on trying to be "much better alternatives at COMPETITIVE prices".

Of course, there are "more difficult to supply areas", such as isolated continental (incl. AK) or offshore areas (PR, VI, GU, HI...) or countries where government regulation favors one kind of business or producer, where the advantage these larger "big box" stores is reduced or eliminated. In these areas smaller stores and old-fashioned "big box" (Mcys, SHLD, TRU, Wags, Civie...) chains and hold their own against the most modern "big boxers". But still they have to contend with the "Amazonian online wave", although not as much...

It's interesting to note that the Military Commissary is preparing to phase out this pricing model. http://www.military.com/daily-news/2017/02/06/commissary-price-c...

Thanks for taking the time to make a new thread to update your original story. Always nice to get an update and learn what happened in the end.

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
    Click here for full-featured reply.

Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017