How Wal-Mart plays you for a sucker
Think Wal-Mart's got the best prices in town? Think again - only the bottom-feeder items are the best, and the product is often Asian slave-labor crap. But that price gets you in the door, and is so low it makes you think all the other prices are low too, when they're really not, and were never intended to be - they've gotta make their profit somewhere, right?
Watch the Frontline report Is Wal-Mart Good for America?
Hedrick Smith, Frontline Correspondent (voiceover): What they're talking about is how Wal-Mart pulls in millions of shoppers, by touting what it calls the "opening price point." [....] Opening price points are the rock-bottom prices that Wal-Mart showcases in special displays: the $9.14 saucepan, Trick-or-treat Jack-o-Lanterns for 78 cents.
Ray Bracy, Wal-Mart VP: The opening price point is clearly a foundation of who we are and how we interact with our customers. We feel that they need to have the best product, the best value, at the best price we can achieve.
Jon Lehman, former Wal-Mart Store Manager: It's the heart of Wal-Mart's pricing strategy. Wal-Mart puts tremendous amount of planning, organization, and thinking into what their opening price points are gonna be, based on last year's sales, based on customer requests....
Smith (v/o): Every line of goods has an opening price point, the cheapest item in the line. For example, this $29.87 microwave oven. It's a good price, but it's also the bait to lure customers to that department.
Lehman (v/o): ...just to get you in, you look at that an' you think, "Wow, what a great price!" Then they got you, because you walk about ten more feet and you see the item you really want in that same category, then you buy that item, but it's not gonna be probably the lowest price in town.
Smith: So are you saying that, that the opening price is the lowest price, and actually will beat the competition, but maybe other items in the same category aren't necessarily the lowest price?
Lehman: Oh, absolutely not. Once you walk past that opening price point, they gotcha, because you've already formed that perception that everything in that department is the lowest price in town.
Smith: And maybe it's not.
Lehman: No! It's not. No, I can tell you it's not. I can tell you from experience: it's not.
Watch the Frontline report Is Wal-Mart Good for America?
Hedrick Smith, Frontline Correspondent (voiceover): What they're talking about is how Wal-Mart pulls in millions of shoppers, by touting what it calls the "opening price point." [....] Opening price points are the rock-bottom prices that Wal-Mart showcases in special displays: the $9.14 saucepan, Trick-or-treat Jack-o-Lanterns for 78 cents.
Ray Bracy, Wal-Mart VP: The opening price point is clearly a foundation of who we are and how we interact with our customers. We feel that they need to have the best product, the best value, at the best price we can achieve.
Jon Lehman, former Wal-Mart Store Manager: It's the heart of Wal-Mart's pricing strategy. Wal-Mart puts tremendous amount of planning, organization, and thinking into what their opening price points are gonna be, based on last year's sales, based on customer requests....
Smith (v/o): Every line of goods has an opening price point, the cheapest item in the line. For example, this $29.87 microwave oven. It's a good price, but it's also the bait to lure customers to that department.
Lehman (v/o): ...just to get you in, you look at that an' you think, "Wow, what a great price!" Then they got you, because you walk about ten more feet and you see the item you really want in that same category, then you buy that item, but it's not gonna be probably the lowest price in town.
Smith: So are you saying that, that the opening price is the lowest price, and actually will beat the competition, but maybe other items in the same category aren't necessarily the lowest price?
Lehman: Oh, absolutely not. Once you walk past that opening price point, they gotcha, because you've already formed that perception that everything in that department is the lowest price in town.
Smith: And maybe it's not.
Lehman: No! It's not. No, I can tell you it's not. I can tell you from experience: it's not.