Wal-Mart prices on the rise: JP Morgan study

Source: Reuters

Wal-Mart Stores Inc has raised average prices at its stores by about 6 percent in a month, according to a recent study in Virginia.

A check by J.P. Morgan Securities said average prices at the Wal-Mart Supercenter in Virginia were upped by 5.8 percent, the most significant sequential increase since it started the study in January 2009.

... Rising costs of raw materials and oil are pressuring companies across the board. Companies are passing on some of the input costs to consumers by rising prices as they try and guard margins.

Read more: http://www.reuters.com/article/idUSTRE6791MH20100810?type=domesticNews

business.

They sell at less than cost, run off the competition then jack up the prices because you don't have anywhere else to go.

Maybe it isn't a conspiracy. In last 60 days crude has moved steadily from $70 to $80.

I was passing through part of the produce section and two employees were opposite me, waling in the other direction.

Worker 1: Hey! They raised the price on those tomatoes! But they still have a "rollback" (advertising label) on them - how can they do that?"

Worker 2: (Looking around nervously) I don't know. Maybe it's (the fake price on the rollback label) within 30 days or something"

Worker 1: "Huh. Well that's dumb."

Worker 2: (Looks down and keeps walking in silence)


So, when you see "Rollback" and some price that the product was supposedly priced at before, it's pretty much meaningless. Department stores have been pulling that little trick for ages. Example: JC Penny. Very little of the merchandise in their store on any given day is not "on sale." Department stores commonly put new merchandise out at full retail price for a day or two and then mark it as "on sale" to create a false sense of urgency.

Wal*Mart went with the opposite approach, saying that they're prices were not sale prices, but instead were low "always." It's a false choice of course, since most retailers sell at the lowest price they can to remain competitive and move the merchandise. Wal*Mart must now be using their "rollback" labels to create a similar kind of urgency in the customer. "I should get this now! It's a good deal!" - It's only logical, since the "rollback" and "sale" are pretty much identical in appearance. You can pretty much bet extensive consumer testing was done, and this is what they came up with. So this way they can play with their prices, and even raise them, and still call it a "rollback."