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Wednesday, June 20, 2012

Ethics of Sale Buying- Ask the Reader

My freezer after my shop today. Entire top shelf all bought today.
Last week, my friend alerted me via Facebook about an ultra amazing sale going on in a large chain supermarket (supermarket A) somewhat near my house, thinking that I'd like to take advantage of it.
On Thursday, I went with my friends to the store (we split the cost of gas to make it more affordable) and I picked up over 50 pounds of meat and over 50 pounds of produce at rock bottom prices! Whole chickens were 20 cents a pound, chicken breasts were $1.10 a pound, chicken wings were approximately 30 cents a pound, and the veggies ranged in price from 3 to 11 cents a pound for onions, lemons, potatoes, carrots, tomatoes, cucumbers and watermelon. Yes, I know, those prices are simply unbelievable- they were FREE, practically.

After hearing about the sale, one facebook friend of mine shared a news article that supermarket A has stated that its goal is to knock supermarket B, the supermarket I usually shop at, out of the market, and is therefore engaging in some really, really heavy price wars.
Of course, a huge facebook debate ensued.


It went something like this:
"Careful! They're trying to kill off the competition, and once they do, they'll raise their prices again and you'll be forced to pay high prices."
Someone else said "One or two big cheap shops and a man is out of business and store A has no competition. Has anyone been here long enough to remember when ... supermarket prices were sky high and only people with means went in to them. Everyone else did the sensible thing and bought in the mom and pop's and farmer's market. This store/company didn't build themselves up privately but were the beneficiaries of government subsidies, and the people who bought them got bailed out when they got in trouble. Store B, on the other hand, is run by a good man, a private businessman who built up by hard work and started the idea that walking into the supermarket doesn't need to hurt financially and regular people could afford more. That is what you kill if you take part in this. Instead, write to store A now and tell them you will never buy from them or their affiliates if they do not stop immediately. I have heard levels of frugal that are in my eyes absurd but this is the first time you people are on shaky moral ground."

The other side of the debate was that competition is good, it only benefits the consumer, and yada yada yada...

It actually made me think...

When there is such a sale like this, one whose stated goal is to put the competition out of business, is it wrong to take part in it? Is it actually immoral?

See, the reason why stores have loss leaders (products they sell at a loss) is because they are trying to lure you into the store with low pricing in some areas, and then assume that while you're there anyhow, you're going to spend money on things whose prices are not so good, and the profit the store makes on those items more than makes up the loss they took for the loss leaders.
When a store does this, they take into account that there are people like myself that will take advantage only of the sale items, and not buy expensive items, which would make the store lose money on my shop. However, stores also assume that most people are not like me, do not shop like me, and they'll be making a profit off of most of the shoppers.

When I went to store A and bought my 50 pounds of meat at rock bottom prices, they weren't "driving out competition"- they were losing money from me, not making money from me off of store B's back. And because of these incredible sales, many people, not just from the area, were driving to store A and loading up on sale items.
Trust me, store B isn't losing money now. If anyone will lose money, it'll be store A, with all the savvy shoppers now taking advantage of the huge loss leaders.

So is it actually "immoral" to buy huge loss leaders from store A when store A said their reason for what they're doing is to drive store B out of business, and store B is run by a philanthropist and a charitable businessman who said that his goal in his supermarket business was to make groceries affordable?

This also reminded me of another topic that I'd wanted to post about a long time ago already.

Our local mom and pop's store was bought out by a large, national supermarket chain. So was the mom and pop's in the community next door. And the town nearby. And the town near that. No more small businesses anymore, it's all owned by an international conglomerate.

I have to say, I was pretty thrilled to hear this news. Because smaller stores often don't have the same buying powers as large conglomerates, and therefore can't usually offer as good sales and prices, and I was looking forward to better pricing.
And yes, pricing at the corner store is now much better than it used to be when it was privately owned. Sales are frequent, sometimes even better than at my "usual store".
And it makes me thrilled.

And then it makes me think about people who refuse to shop at Walmart or even places like Whole Foods, because they think its not right for big mega stores to come and move into an area and virtually eliminate all competition because they're able to offer lower prices...

And therefore, I have a few related questions for you, readers---

As frugal, ethical, moral consumers, do you think it's fine to take advantage of sales that were designed to "put the competition out of business", like the sale in which I bought all the chickens? Or do you, like my friend, think you should file a complaint against the store, and "not be willing to fall for these disgusting tactics", and pass over the sale? Why or why not?


And do you think that it is our responsibility to support small businesses instead of large corporations, even if it means spending more money? Is it unethical to buy where its cheaper because we're not supporting small businesses?


What do you think is morally correct? What is our obligation as consumers?

Linking up to Frugal Friday, Fight Back Friday

2 comments:

  1. Interesting questions...I think it's fine to take advantage of loss leaders, but if you have loyalty to store B, then go back there after the sales are over, especially if you know the reason for the sale is to damage the business of store B.

    I believe in shopping at local businesses which support industry and agriculture in my area if and when I can afford to. I question how chains can offer lower prices - if it's just buying power that's one thing, but if it's from the sweat off of workers' backs in terrible conditions in third world countries, then I don't wish to support that. So I guess that means doing a bit of research to see where the ability to offer those prices is coming from and deciding on a case-by-case basis. (I also do this when it comes to food and the ethics of how it's raised - like free-range vs. feedlot animals, etc.)

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  2. the way they put them out of business is that you come in, shop around and keep coming back. if you only go in for that one sale, it wont alone drive store b out of business.

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