Are loss leaders a losing proposition for stores?
Many retailers this back-to-school season are highlighting loss leader deals in their circulars to drive store traffic. But the tactic is being met by a steady stream of articles and money-saving blogs teaching consumers how to take full advantage of the deals while avoiding offers that help merchants turn a profit during this important selling season.
“Retailers reserve these promotions strictly for in-store shoppers, because when you’re physically in the store you’re more prone to making unplanned purchases,” wrote Brad Tuttle on Money.com. “The trick for money-conscious consumers, then, is to stick to your shopping list and only buy items when they’re discounted.”
Among the deals for the current week:
- Office Depot is offering a four-pack of glue sticks, a six-pack of Paper Mate Sharpwriter Mechanical Pencils and a 100-sheet composition notebooks for a penny each after a shopper spends over $5.00;
- Staples is offering a three-pack of pink wedge erasers for 25 cents and a five-pack of Pentel ballpoint pens for 75 cents each;
- Walgreens is offering a box of Crayola white chalk, a pair of Westcott scissors or one pad of Post It Notes for 59 cents with a store card.
Other articles and blogs likewise offer tips around maximizing back-to-school spending including warnings of limitations on offers and how to maximize the timing of such deals.
“We keep our eyes peeled for huge loss leader discounts, like boxes of pencils for a quarter or notebooks for a nickel or composition books for a nickel or rulers for a quarter,” writes Trent Hamm on thesimpledollar.com. “When we find those sales, we’ll buy two or three or five or ten of the item right now, knowing that we’ll be able to use them for the next few years during back to school time.”
“School sales generally go on four to six weeks before most schools get back in session,” wrote Ashley Eneriz on wisebread.com. “This gives you multiple opportunities to shop just the loss leaders of most stores.”
Wrote Courtney Jespersen, at NerdWallet, on usatoday.com, “It’s better to wait until inventory has been sitting on shelves for a while. Sales will swell in late August and early September.”
- 5 Stores Where Back to School Items Cost Under $1—or Even Just 1¢ – Money.com
- Our Family’s Strategies for Saving a Mint on the Back-to-School Season – Simple Dollar
- How to Find the Best Back to School Sales – Wisebread.com
- The do’s and don’ts of back-to-school shopping – USA Today
DISCUSSION QUESTIONS: Do you agree that cherry-picking consumers have diluted the effectiveness of loss leaders as a tool to drive traffic and sales for back-to-school? Do loss leaders still have a role to play in retail marketing or have their outlasted their effectiveness?