Thursday, March 26, 2009
The Grocery Clone Wars
I was out grocery shopping a few hours ago, and I noticed again something that I had been watching since the recession started. In the Cerial section, the local generic store brand of toasted oat cerial was totally empty, while the "Cheerios" and all the other name brand cerials had full shelf positions. The generic brand called "Toasted Oats" was priced at $2.49, and the same size box of "Cheerios" was priced at $4.99! For each type of cerial, there were twice as many shelf positions for name brand cerials than for the generic store brands, and from what a clerk told me: the store brands are only stocked once a week, and when they run out, they stay empty until the next week. When you properly interpret the Swahili, this means that: the name brand products, that have to pay for shelf space in the stores, fight and threaten the stores if they sell more than the minimum ammount of the generic store brands, which are usually 1/3 to 1/2 less than the Name Brand price. Thus forcing the consumer to pay higher prices. On top of this, wholesale comodity prices have been falling as the name brand products continue to increase in price. The empty generic brand shelves send a message to the name brands (we can't afford your products), but maybe nobody at the name brands is listening.
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