麻豆影视

Business

    • How Canada's grocery stores get you to spend more

    Share

    You've arrived at the store for a quick post-work grocery run, hoping to pick up a cheap, ready-made meal for dinner.

    After finding a discounted pre-cooked chicken, you toss a bag of rice and veggies in your shopping cart too, even though neither were on your list.

    Oh, and a six-pack of tissue boxes, since you notice they're on sale.

    That behaviour plays into a strategy that grocery chains have long relied on to get customers through their doors, even if it means selling a certain popular item below cost, experts say. And with food prices continuing to rise even as overall inflation has slowed, shoppers could be even more vulnerable to overspending after finding a good deal.

    Known in the industry as 鈥渓oss leaders,鈥 those bargains are designed to appeal to the customer's desire for savings and convenience, while simultaneously piquing their interest in other products.

    鈥淚t can entice a large number of customers to change their shopping behaviour once they've entered the store. With that saving in mind, they might be less price sensitive towards other items,鈥 said Andreas Boecker, who chairs the University of Guelph's food, agricultural and resource economics department.

    鈥淭he overall strategy behind the loss leader is that the loss ... is more than compensated by the higher margins and the sales of the other products that are generated by attracting the customer to the store.鈥

    At $7.99, Costco's pre-cooked rotisserie chicken serves as one of the more recognizable loss leaders at grocery stores in Canada, while other chains often prioritize discounts on dairy or bread.

    Subscription membership programs associated with various chains also increasingly offer deal pricing or points on certain items tailored to the consumer's purchasing trends.

    With shoppers vulnerable to temptations, loss leaders are typically placed strategically 鈥渢o guide the consumers through the store so that they have to pass by as many aisles as possible,鈥 said Boecker.

    He said not just any product can serve as a hook to reel the customer into the store. One of the most important prerequisites for a loss leader is that it's perishable.

    鈥淚f you can store it, then of course you would buy an awful lot of the product and then the company would incur a really big loss,鈥 he said.

    But prioritizing staples for below-cost pricing may not be effective for stores over the long term, said JoAndrea Hoegg, a marketing and behavioural science professor at the University of British Columbia's Sauder School of Business.

    鈥淪taples you have to buy anyway, so if they're doing that on a staple they're taking money off the table,鈥 she said.

    鈥淚t would be something that you might not necessarily be buying. Like a rotisserie chicken might be something that's a nice to have; it's not something you're going to buy every week.鈥

    A 2014 study published in the journal Economic Letters also explored how loss-leader pricing is used to entice shoppers into purchasing a higher quality version of the discounted item.

    Authors Younghwan In and Julian Wright said companies often advertise low prices for certain basic products to make a better quality product's price seem worth the extra money.

    鈥淔irms make a loss on some consumers (who buy the basic version of the good) and a profit on others (who buy the upgrade),鈥 the study said.

    The ability to take a financial hit on certain products so shoppers will be tempted to spend on others is a luxury that benefits the largest chains, according to a separate 2011 study published in the American Economic Review.

    Authors Zhijun Chen and Patrick Rey argued the 鈥渆xploitative use of loss leading appears to be a robust feature in market environments where a few large retailers enjoy substantial market power over one-stop shoppers and compete with rivals that focus on narrower product lines.鈥

    The convenience factor plays an outsized role in why bigger stores use the strategy so effectively, said Boecker. A shopper may not sweat the extra $5 spent on a product they'll eventually need when they're already at the store.

    鈥淭hat is probably through all income levels, all price sensitivity levels, because we are all time-strapped,鈥 he said.

    鈥淐onvenience really outweighs any cost calculations if you're under time pressure, for example, to get home from work and to have to prepare dinner.鈥

    Hoegg said that although a good deal can be hard to resist, it's important for shoppers to employ a certain level of skepticism to avoid getting sucked into an unnecessary shopping spree.

    鈥淐ompanies are not going to give things away unless it is beneficial to them, so it's just thinking it through from the firm's side, having that little bit of persuasion knowledge, (questioning) 'Why is this on sale?鈥' she said.

    鈥淚f it seems too good to be true, then just be very careful that you're only buying that product and you're not getting caught up in that sort of shopping wave and spending more than you meant to.鈥

    This report by The Canadian Press was first published Feb. 5, 2024.

    CTVNews.ca Top Stories

    Why brain aging can vary dramatically between people

    Researchers are uncovering deeper insights into how the human brain ages and what factors may be tied to healthier cognitive aging, including exercising, avoiding tobacco, speaking a second language or even playing a musical instrument.

    The union representing some 1,200 dockworkers at the Port of Montreal has overwhelmingly rejected a deal with their employers association.

    A man who was critically injured in a police-involved shooting in Hamilton late Sunday afternoon has died in hospital, says the province鈥檚 police watchdog.

    Canada

    World

    Politics

    • Murray Sinclair鈥檚 family members say the late justice and senator has been laid to rest according to his wishes.

    • Prime Minister Justin Trudeau announced voters in Cloverdale鈥擫angley City will pick their next member of Parliament on Dec. 16.

    Health

    Sci-Tech

    Entertainment

    Business

    Lifestyle

    Sports

    Autos

    Local Spotlight

    For the second year in a row, the 鈥楪ift-a-Family鈥 campaign is hoping to make the holidays happier for children and families in need throughout Barrie.

    Some of the most prolific photographers behind CTV Skywatch Pics of the Day use the medium for fun, therapy, and connection.

    A young family from Codroy Valley, N.L., is happy to be on land and resting with their newborn daughter, Miley, after an overwhelming, yet exciting experience at sea.

    As Connor Nijsse prepared to remove some old drywall during his garage renovation, he feared the worst.

    A group of women in Chester, N.S., has been busy on the weekends making quilts 鈥 not for themselves, but for those in need.

    A Vancouver artist whose streetside singing led to a chance encounter with one of the world's biggest musicians is encouraging aspiring performers to try their hand at busking.

    Ten-thousand hand-knit poppies were taken from the Sanctuary Arts Centre and displayed on the fence surrounding the Dartmouth Cenotaph on Monday.

    A Vancouver man is saying goodbye to his nine-to-five and embarking on a road trip from the Canadian Arctic to Antarctica.

    • Weather watchers were treated to an exceptionally rare display on Friday evening as rare cloud formations filled Vancouver skies.

    • For some shoppers it was Nov. 1, but for others the first hints of Christmas - saccharine treats, festive-fragranced candles and gaudily wrapped gift sets - were being noticed in stores long before the final Halloween decor had been cleared.

    • Thousands of people are expected to gather in downtown Vancouver on Monday to observe the city鈥檚 100th Remembrance Day ceremony.

    • Toronto is expected to see an economic boost to the tune of nearly $300 million thanks to Taylor Swift鈥檚 upcoming Eras Tour, which will be making a stop in Canada鈥檚 largest city for a six-show run later this month.

    • One man was transported to hospital early Monday morning after a stabbing in the northwest end of the city, Toronto police say.

    • A man who was critically injured in a police-involved shooting in Hamilton late Sunday afternoon has died in hospital, says the province鈥檚 police watchdog.

    • A pair of 105-mm howitzers bark constantly as they turn plywood tank targets into kindling kilometres away on the windswept landscape of one of Canada's largest military bases.

    • Two semis were among the vehicles involved in a multi-vehicle crash that brought westbound traffic along Stoney Trail Northwest to a standstill on Sunday.

    • More than 700 people danced, ate, and sang to celebrate Diwali Saturday night at the Genesis Centre in northeast Calgary.

    • NEW THIS MORNING

      NEW THIS MORNING

      An Ottawa boy with a rare disease will be getting the chance to see Taylor Swift in concert after the winner and organizers of an auction held on his behalf gifted the tickets to him.

    • After months of controversy surrounding a dog park in Ottawa's west end, a solution has been reached to divide the park in half.

    • CTVNewsOttawa.ca looks at Remembrance Day ceremonies in Ottawa.

    • An elementary school in Greenfield Park on Montreal鈥檚 South Shore is closed after it was the target of an alleged arson attack.

    • Some 12,000 daycare workers are set to begin their strike action Monday morning.

    • Two vehicles were set on fire in Montreal鈥檚 east end Riviere-des-Prairies neighbourhood.

    • Monday is Remembrance Day, a time to honour armed forces members who have died in the line of duty.

    • Boasting 2,300 square metres of skating space at its new location, Edmonton's Rollers Roller Rink believes it is the largest in Canada.

    • A woman is dead after a driver crashed a truck through a Boston Pizza in Fort McMurray late Saturday morning.

    • A pillar in Canada鈥檚 history was honoured in Winnipeg Sunday afternoon, with thousands showing up to pay tribute to the life and legacy of the late Murray Sinclair.

    • Winnipeg police have identified two men involved in a stabbing incident earlier this week.

    • The Winnipeg Blue Bombers whipped the Saskatchewan Roughriders 38-22 in Saturday's CFL West Division final to earn their fifth consecutive trip to the Grey Cup.

    • Regina author Valerie Crowther is celebrating the release of her book 鈥榃ar Letters: Linking Lives in the Second World War.鈥

    • It was a somber day at Mosaic Stadium as members of the Saskatchewan Roughriders officially cleaned out their stalls and closed the book on the 2024 season.

    • Twilight Tech Arcade, an entertainment location specializing in retro gaming, is closing its doors for the foreseeable future.

    • A man has been charged after a stabbing at an apartment building in Kitchener.

    • The Guelph Police Service is putting out a warning after two deaths in the downtown area.

    • Two new tributes to Canada鈥檚 veterans have been unveiled at the Elmira Cenotaph.

    • Saskatchewan RCMP are searching for a suspect after a man was seriously injured in a farm-related incident in Montreal Lake.

    • It was a somber day at Mosaic Stadium as members of the Saskatchewan Roughriders officially cleaned out their stalls and closed the book on the 2024 season.

    • The Regina Rams claimed the Hardy Cup after a hard fought battle against the Saskatoon Huskies 19-14 on Saturday in the first all Saskatchewan U-Sports western conference final since 2002.

    • CTVNewsNorthernOntario.ca is livestreaming the annual Remembrance Day ceremony at the Sudbury Community Arena starting Monday at 10:30 a.m.

    • Police have arrested a 15-year-old in connection with a break-in and $50,000 in damage done to the Centennial Arena in Elliot Lake in September.

    • Emergency crews responded to the scene on Road 68/Highway 2 east of Thamesford around 7 p.m.

    • On Friday, the Sarnia Police Service (SPS) received a report of an alleged abduction in the area of Kathleen Avenue and Walnut Avenue.

    • The events will start at 10:15 a.m. with a parade that forms up in front of the Delta London Armories, marches east on Dundas Street and turns north onto Waterloo Street to Dufferin Avenue, the west to the Cenotaph.

    • A group of former NHL players faced off against York Regional Police officers in Newmarket Sunday afternoon to raise funds for Special Olympics programs across the province.

    • A driver is facing multiple charges after a multi-vehicle collision on Highway 400 early Sunday morning.

    • The agreed statement of facts was read to the court on Friday in the case of Alex Williams, the 24-year-old jail guard charged last fall with smuggling cannabis and tobacco into Central North Correctional Centre in Penetanguishene.

    • One person has been arrested after Chatham-Kent Police Service (CKPS) received multiple complaints about an alleged drunk driver.

    • More details have been released about a police investigation at the Ambassador Bridge that connects Windsor, Ont. and Detroit, MI.

    • An individual is dead following a collision involving a motorcycle in Kingsville.

    • Environment Canada says heavy rain and winds could cause power outages on Vancouver Island as an "intense" storm system is set to hit the B.C. coast Sunday.

    • Six deer were struck by vehicles in six different locations in a six-hour period on B.C. highways on Saturday, according to the transportation ministry.

    • The union for locked-out port workers in British Columbia says the BC Maritime Employers Association cut off talks in less than an hour Saturday, refusing to budge on a final offer that the union has so far rejected.

    • The emergency department at South Okanagan General Hospital in Oliver, B.C., will be closed for 31 hours this weekend, the second such closure in a week and the third since the start of November.

    • Police in Kamloops, B.C., are reminding parents and guardians to check their children's Halloween candy after receiving a report of a mother finding a razor blade in one of her daughter's treats.

    • More than two years after Alannah Brown and Douglas Barker were found dead north of Penticton, police are asking for help identifying a vehicle they believe was associated with the crime.

    • The Southern Alberta Recreation Association is officially announcing the Town of Taber as next year鈥檚 host for the Southern Alberta Summer Games.

    • The Lethbridge Hurricanes broke open a close game with three goals in the first two minutes of the third period as they defeated the Warriors 7-3 in a game played Friday night in Moose Jaw.

    • There might not a lot snow just yet, but many southern Albertans are still itching to get outdoors.

    • Police have arrested a 15-year-old in connection with a break-in and $50,000 in damage done to the Centennial Arena in Elliot Lake in September.

    • Mayors of the five largest cities in northern Ontario met in North Bay the last two days to discuss a range of critical issues impacting their cities and the region.

    • Residents in the Sault expressed concerns ranging from vandalism to privacy invasions during recent consultations on the city's plan to install automated speed enforcement cameras.

    N.L.

    Shopping Trends

    The Shopping Trends team is independent of the journalists at 麻豆影视. We may earn a commission when you use our links to shop.聽Read about us.

    Stay Connected
    Follow 麻豆影视