08/16/10 Stockholm, Sweden – Good old “Save money. Live better.” Wal-Mart may be choosing instead to surreptitiously raise prices, according to a JPMorgan Chase study. The company, well known by consumers for constantly lowering prices when possible, now appears to be moving in a different direction. In at least one Virginia store, Wal-Mart has recently increased its prices about six percent on average over a six-week period.
From DailyFinance:
“A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the world’s largest retailer has raised prices by nearly 6% on average over the past six weeks, according to the New York Post. Reuters says it was the biggest sequential increase since JPMorgan started the study in January 2009.
“Some Prices Hiked Over 60%
“Some of the price hikes were considerably larger. For instance, the price of a 32-ounce bottle of Windex household cleaner jumped 50%, a 12-ounce box of Quaker Oats instant grits climbed 65% and a 50-ounce container of Tide detergent rose by more than 50%. A spokesperson for the Bentonville, Ark., company could not immediately be reached for comment.
“The results of the price-hike study aren’t entirely surprising. Shares of Wal-Mart, which rose at the height of the recent recession, are down more than 2% this year amid lackluster performance at its U.S. stores, where same-store sales fell 1.1% during the 13 weeks ended April 30.”
The ‘flations are fighting it out, inflation and deflation each jockeying for a say in the nation’s economy. In this Wal-Mart round, prices appear to be going up. It’s possible the behemoth company could be simply padding its margins as the article suggests. However, though it’s probably still too soon, another thought is that recent China factory strikes and subsequently rising labor costs could be nipping at even this giant’s heels.
You can read more details in DailyFinance’s coverage of Wal-Mart quietly raising prices.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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This is nothing new. Wal-Mart is often only
a little lower-priced than Target. That’s why Target is doing so well. Plus Target stores are often neater/cleaner than Wal-Mart
stores. Truth is, you can find great deals anywhere, and you overpay anywhere.
GV Rasin Bran Flakes suffer a 73% price hike.
May 2010 I purchased my last box of GV Bran Flakes for about $1.80. In June the price became $2.50; about a 38% price increase.
In June 2010 I started buying GV Rasin Bran 20oz for $1.66; I had seen a slightly higher price prior to June 2010. This was the only cereal on Walmart’s shelf for less than $2.50. The last opportunity to purchase at the $1.66 price was September 2010 as the price jumped to $2.88 in October; a 73% price increase. The GV Extra Rasin Bran 20oz is presently having a lower price of $2.50.
Walmart has a policy of only rasing prices every six months. That box of GV Extra Rasin Bran is now a bargain as it’s price lower than the standard product.
I’d guess that many cereals who’s prices were raised in June 2010 are going to go up significantly in January 2011.