Thursday, January 20, 2011

The Next Time You Are in the Grocery Store

The American Grocery Store is an amazing machine of marketing!

As I noted in The Casino Effect, the American Grocery Store is a very interesting place, carefully designed to get you to spend more than you wanted to.  But regardless of their nefarious designs, it is an amazing place, when you think about it.

Years ago, during the cold war, there was a joke in Reader's Digest that illustrated what I am talking about.  It went something like this:

An young American clerk working in the State Department was assigned to give a tour of New York City to a visiting low-level Russian Diplomat.  They set off across the city to see the sights.

First, they went to the Statue of Liberty.  The Russian was not impressed.  "In Soviet Union," he said, "We have statue of Stalin, twice as big!"

Next, they went to the World Trade Center and looked out over the city.  The Russian was still not impressed.  "In Moscow," he said, "We have building, twice as large!  Twice as Tall!"

And so it went.  They went from place to place in the big Apple, and everything the young American clerk showed the Russian was met with the claim that "In Soviet Union," something was bigger, better, more beautiful, or whatever.

Frustrated, the young clerk finally hit upon an idea.  He drove the Russian to an American supermarket, and they went inside, where there were aisles and aisles of produce, packed foods, fresh meat, cheeses, milk, fruits, and beverages.

The Russian dropped to his knees and began weeping.

The joke may be lost on a younger audience not familiar with the Soviet Union before the end of the Cold War.  Under Communism, shortages were the norm, and most stores had lines around the block, where people would wait for hours, just to buy a loaf of government bread.  And of course, there was a thriving black market for most goods.  Empty shelves, poor selection, and deprivation were the norm.


(When Khrushchev visited American Exhibit at the Moscow Exhibition, during the kitchen debates with Nixon, Nixon showed the Soviet Premier a model of a typical American kitchen, with a refrigerator and modern appliances.  Not surprisingly, Khrushchev claimed it was a fake, a Potemkin Kitchen, if you will, as of course, no one but the wealthiest of Americans could afford such a kitchen!  So the joke above is sort of based on a real event).

This is, of course why Communism sucks.  And when I told that joke to my Commie Brother, fresh back from his "We Hate America!" tour of the Eastern Bloc, he wasn't amused.  After all, at least in Communist countries, everyone is "equal" - right?   You fill in the blanks, here.

The American Grocery Store is an amazing thing - and yes, it is cleverly designed to fleece you, if you are not careful.  Is this a bad thing?  Yes and no.  Yes, if you are weak-willed and a weak-thinker and go into a grocery store and just assume they put stuff on the shelves willy-nilly, you are going to get taken for a ride.   As I noted in my Wegman's posting, grocery stores are designed according to science, not random chance.  And if an item is located on a particular shelf, it was put there because someone carefully thought about where it should go.  And of course, it goes without saying that the packaging is designed by a team of marketers and even psychologists, to appeal to your instincts, not your rational thinking.

The next time you are in a grocery store, look at all the items on the TOP SHELF and BOTTOM SHELF.  It will be a revelation!  You will notice stuff in the store you never knew they had.  The middle shelves, at eye level, are where they put the premium branded stuff, and often times, vendors actually pay the grocery stores for this premium space.  End caps are another area where the "Real Estate" is sold off to the highest bidder.

In fact, in many large grocery chains, the store acts only as a Real Estate Agent and Checkout provider.  The food purveyors actually pay for their shelf space, and even provide people to stock and organize their section of shelves.  When you go into a major store chain, you often see people who are wearing "Contractor" badges, stocking the shelves.   When you ask them where the pickles are, they have no clue, as they are paid only to stock items for their employer, not for the grocery store.

Soda and Beer distributors usually are the largest participants in this scheme - paying dearly for "end cap" displays and providing the manpower to stock them.  For the grocery store, it is a win-win, as they get paid to have someone bring product to the store, unload it, and even stock the shelves.  And if consumers buy, well, that is icing on the cake.

Of course, not ALL the food in a grocery store is sold this way - just a lot of mass-marketed and competitive items, like soda pop, beer, cereal, potato chips, cakes, cookies, and the like - Junk food, mostly.  They take the end caps and the prime shelf space (eye level) leaving the other brands to the obscure top and bottom shelves and less traveled areas of the store.

For the astute consumer, checking out these obscure areas will yield a treasure trove of interesting and better priced products - often with better ingredients.  Yes, the American Grocery Store is designed to entice you with bad foods - soda pop, candy, carb-centric meals, and the like.  BUT, it is a well-stocked cornucopia, nevertheless, and if you are smart, and not just a weak-thinker, you can look beyond the marketing and hype and see some real bargains for healthy food.

Alas, not many do this.  In a typical trip to Wal-Mart, we see grossly obese people (often riding electric scooters) filling multiple shopping carts with gallons of orange soda pop or cases of Pepsi or Coke (on sale!).  Their solid food includes huge bags of potato chips, Little Debbie snacks, and frozen pre-cooked entrees.  It is a nutrition and calorie nightmare, and yet they cannot understand why they weigh 300 lbs.  All of the items in their cart are the items that are at eye level or on end caps - the types of foods where the purveyor pays the retailer for prime space.

And like cattle to the slaughter or gamblers to the casino, all they look at are the bright shiny lights and flashy-flashy and never bother to think more about what is going on here, or whether they are being baited into buying things that are against their own self interest.

But again, the Great Thing About America, is that while we do have such bad consumer bargains out there, a person can succeed in the marketplace by thinking carefully and acting intelligently.

When you are presented with a bad deal, whether it is a payday loan, a new-car lease, or rent-to-own furniture, you can walk away.  But few do - and in fact, many instead spend considerable energy defending such bad decisions as being sound economics.  Why would someone, in their right mind, defend a leasing company?

Similarly, as in the movie Food, Inc. there are people out there who will defend bad food choices as "economical" on the grounds that a head of broccoli could easily buy two cheeseburgers on McDonald's $1 value meal.

For you, the intelligent and astute consumer, bargains are thus waiting for you.  Not intelligent or astute?  Well, you can educate yourself.  Check out your local library for books about nutrition and shopping.   Yes, many authors have written volumes and volumes about the Great American Grocery Store - I didn't just make this all up myself.

On the other hand, if you want to engage in weak-thinking and feeling sorry for yourself, I'm afraid I'll have to say "NO SALE".

This is a great country - if you are willing to WORK and THINK.

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