The true cost of a lowest price guarantee

It seems to me that when most people shop for everyday items, the primary discerning factor (on whether to buy a particular item) is price. People will overlook poor service, questionable supply (“it fell of the back of a truck”), and pretty much anything else in order to get the best price. Is this necessary? Is this wise?

Is it necessary?

For some people, every dollar counts and they simply do not have the luxury of spending more money. For most people I know, this is absolutely not the case. Life for most people in Australia is pretty good; and my immediate peer group is fairly affluent.

There is little reason to spend 20c less on a carton of milk; particularly when you may spend $15 eating out or $30 on a CD you won’t really listen to. You don’t need to shop around. Curbing those “impulse buys” (that later just gather dust) can most likely more than compensate.

Is it wise?

In order to provide the lowest price, a number of other areas have to be sacrificed; not just at the retail store, but all the way through the manufacturer and supply chain. If this chain reflects whatever is required to deliver the lowest price, everything else comes second: service, wages, job security, the environment, … everything else.

When buying something from a store you are communicating that they have their priorities in order to secure your business. Don’t tell them that you can live with poor service and socio-economic problems (resulting from extensive use of cheap overseas labour) provided they can keep the price down. That’s exactly what you’ll get.

What world do you want to pay for?

It’s not all doom and gloom. For many people, price is no longer the main consideration in some areas. For example, many people buy free range (or RSPCA approved) eggs, and reuseable green bags (instead of using free plastic bags). I’d encourage people to add more to that list: recycled toilet paper, phosphate free washing powder, etc.

It’s a matter of deciding what is important to you and working towards that goal. Buying something from a store isn’t just an economic exchange; it’s participation in directing how business is run.