Central Florida TV News Accuses Walmart Of Price Gouging Poor People

Local 6 news in Central Florida is accusing Walmart of setting their prices for sugar and other “staples” by demographic — charging more in stores where the population isn’t as wealthy as other neighborhoods. Walmart’s spokesperson claims to be offended by this accusation.

Local 6 says:

“When we see that a nearby competitor might temporarily lower a price on an item, our stores have the authority to adjust their price lower. This can happen in a very small vicinity of stores,” the company said in a statement to Local 6.

However, the Problem Solvers found that the prices concerned were not temporary as Wal-Mart described, but consistent over a period of at least two months.

Barnaby [a consumer who reported the price differences] said she thinks that Wal-Mart is charging more for the same products in poorer neighborhoods than in neighborhoods with higher incomes.

“It disgusts me that the people who can least afford to buy the food have to pay more money than everyone else does,” Barnaby said.

That’s a serious accusation and the Problem Solvers probed further, Cooper reported.

First, Cooper looked at the most recent census data, which showed the median household income is highest in Apopka — where the prices were the lowest, compared to incomes in Mt. Dora and Clarcona/Pine Hills where the prices were higher.

Cooper brought that data to Wal-Mart’s attention and a spokeswoman for the company said she was offended by the suggestion that the company was charging more in poorer neighborhoods.

She insisted that Wal-Mart does not price by demographic, that it remains the low price leader in every market — and that the three stores we visited represent entirely different markets with different sets of competition, Cooper reported.
But when the Problem Solvers checked the competition, they did not find a similar pattern of pricing, Cooper said.

They visited Publix stores in the Windermere/Ocoee area, the Rosemont neighborhood of Orlando, and Altamonte.
The prices of the sugar, condensed milk and asparagus were consistent at all three stores. Visits to different Winn-Dixie stores generated the same results, according to Cooper.

Here are the prices they checked:

Sugar
$2.38 Mt. Dora
$2.36 Clarcona/Pine Hills
$1.76 Apopka

Condensed Milk

$1.54 Mt. Dora
$1.56 Clarcona/Pine Hills
$1.04 Apopka

Asparagus

$2.42 Mt. Dora
$2.54 Clarcona/Pine Hills
$1.86 Apopka

Congratulations, Central Florida. You’ve realized that Walmart’s pricing is shady and inconsistent.

Wal-Mart Price Discrepancies Investigated
[Local 6] (Thanks, pattie-anne!)
(Photo: RowJimmy )

Comments

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  1. costanza007 says:

    Don’t like it? Don’t shop there.

    • blackmage439 says:

      @costanza007: Some people do not have the option of choice. In many areas, especially in Arkansas, Walmart is the ONLY option. Do not make such ignorant statements.

      This investigation is upsetting, and if proven true, only reaffirms my disgust with Walmart.

      • Jakuub says:

        @blackmage439: Ignorant statements? Why should Walmart be some magic company that doesn’t try to make money? If you were the ONLY person selling something in a given area, wouldn’t you feel that you had a right to make a profit due to that? You explain this yourself – if it’s the only option, it’s going to cost more. If there were a competing franchise across the street, it would cost less. Implying that Walmart is intentionally charging poor people more for any reason other than lack of competition is ignorant as well.

        • BrianDaBrain says:

          @Jakuub: So… you’re completely OK with being gouged? Can I come over to your place and sell you some toilet paper for $5.00 per roll?

          Seriously, though, just because it happens does not make it right. Other companies do it (such as Comcast – they use areas in which they have a monopoly to recoup profits lost in areas where they have to run promotions), but that doesn’t make it any less infuriating. The *right* thing to do would be to make prices even across the board (unless, for some reason, demand for a particular product was far higher in one neighborhood versus another), but we all know that’s not going to happen. 2 reasons for that: Wal-Mart is greedy, and they have people like Jakuub and costanza007 to defend the practice.

          The only real solution is for competitors to open locations in the neighborhoods that are currently monopolized by Wal-Mart.

          • Jakuub says:

            @BrianDaBrain: Actually, instead of trying to moan about Walmart’s prices until they change them to meet your arbitrary standards, shop elsewhere, so that I actually make a difference by showing that I’m not willing to be gouged by Wal-Mart.

            Also, your belief that they should have the same pricing everywhere is either ignorant, or socialist, and I’m not in a position to care to determine which is actually the case.

        • blackmage439 says:

          @Jakuub: Read the damn article. It clearly states the team investigated three cities with EQUAL competition. Not to mention this isn’t the first time Walmart has been accused recently of fixing prices. Many “staples” like water and rice have been inflated at Walmart stores in the Lousiana & Texas areas, while other stores’ prices remain the same.

          Ignorance is bliss.

          • Jakuub says:

            @blackmage439: If there’s equal competition, with lower prices, why is this an issue – go to the competition. They get to set whatever prices they want, and it’s the consumer’s job to make the decision that’s right for them; if they want the convenience of buying their auto parts at the same place as their sugar, they might pay a premium for it; how is that Wal-Mart’s fault? I’m confused as to this notion that pricing should be equal for all Wal-Marts in the country – why? Is Wal-Mart some-how immune to supply/demand, now? I really don’t see why people are upset that a business is trying to make money.

    • Riddler says:

      @costanza007:

      “Don’t like it? Don’t shop there.”

      Absolutely! Instead, drive yourself to the wealthy part of town and take advantage of their prices.

      Oh wait, you don’t have a car and you say that you get to your local Wal-Mart via the bus? No problem. Take the bus to the wealthy part of town.

      What’s that? The mass transit bus system doesn’t run to the wealthy part of town? Well, just use the internet and buy your stuff on-line you ungrateful S.O.B. You’ve got other options.

      You don’t have a computer and have no other options? Meh…not my problem. Don’t like it, continue to be exploited and ripped off…or die. Either way, don’t complain.

      Sincerely,
      / Sarcasm

      • catastrophegirl chooses not to fly says:

        @Riddler: actually you’re quite right about the bus problem! that’s my home town – the bus service is insanely bad and in most places non existent. it’s fantastic on international drive [tourists!] and downtown [convention center, arena] but everywhere else it can take up to 4 hours to go about 15 miles on the bus. i used to walk 6 miles to work because the nearest bus stop – was 6 and half miles away- PAST my job.

        so i happen to know that in some of those areas – there’s no RELIABLE bus, no convenient bus or no bus AT ALL.

  2. BeeBoo says:

    Wal-Mart charges according to the degree of competition.

    Generally:

    There is less competition in poor neighborhoods.

    Income by area is highly correlated with race.

    So yes, they are charging poor, non-white people more than rich white people.

    Anyone who lives in an urban area is well aware of the phenomenon of a lack of grocery stores in poor neighborhoods and the fact that the few that are there are crappy and overpriced.

    This is nothing new and Wal-Mart is not the only guilty party.

    • Applekid ┬──┬ ノ( ã‚œ-゜ノ) says:

      @BeeBoo: Of course, that yuppie mantra of “We don’t shop at Wal-Mart, we gladly pay more to support local business!” holds more water in rich areas that can afford to pay more versus poor areas that can’t. As a result, local business in rich areas manage to stay open while in poor areas they close down because they can’t compete. Then after the competition is wiped out, Wal-Mart can raise it’s prices because, well, who else will you buy from?

      The extinguishing of local competition just happens much more efficiently in poor areas because the only way Wal-Mart competes is by price, which is absolutely the overwhelming deciding factor for local shoppers.

    • JohnnyP says:

      @BeeBoo: it sorta goes with the business model.. undercut all the other places with lower prices and when the competition is gone raise the prices higher then they were to begin with.

    • Raiders757 says:

      @BeeBoo:

      Where I live it isn’t much that people are poor, that causes the lack of grocery stores and such, it’s the fact that these areas have high crime rates. Any store that opens, gets constantly robbed by the sorry no good thugs that live there.

      It’s a real shame, but as long as these people allow the thugs to rule in their part of town, nobody is going to do anything to help. There is a real problem with silence towards the police in the poor communities.

      • BlazerUnit says:

        @Raiders757: I don’t buy your notion that the prices are higher because of theft or robbery. As a poster has mentioned (in later comments), WM does too much research to put its stores just anywhere. If the neighborhood was really ‘grimy’, there’d be no store located there at all.

        The city of Prichard, AL (just north of Mobile) is mostly Black, has higher poverty rates, and higher per capita crime rates. In a world where you have people protesting the company for exploitation, they want Walmart exploitation to keep some measure of needed tax revenue from going to other municipalities. The mayor himself has called, written, (and met, IIRC) with reps from Bentonville, but they haven’t gotten anywhere.

        Meanwhile, in the same metro Mobile areas of less crime and poverty, you have local TV bulletins for criminal thefts, shoplifting, and assaults at big box stores in the city and in suburbs/exurbs. Are their prices necessarily going up? I doubt it.

  3. Sweet, the first comment was to blame the nonexistent OP!

    To anyone who says “don’t shop there”: Most people do not make their own goods anymore. We need to shop somewhere, so us people with less money figure we’ll go to the place that advertises the lowest prices. When we get jerked around, we have a right to complain. We earned our money, and should not be treated like crap when we decide to spend it! (We also shouldn’t be maimed or poisoned, but I’ll leave that for another story).

    • Jakuub says:

      @thnkwhatyouthnk: “When we get jerked around, we have a right to complain. We earned our money, and should not be treated like crap when we decide to spend it!”

      You also have the right to… shop elsewhere? fool me once, shame on me, etc, etc; if they jerk you around, take your hard earned money elsewhere, and pay less to do so, apparently. If there isn’t another cost-effective option close enough for you to go to, then *ding ding ding* maybe that’s why Wal-Mart’s prices are higher in your area – less competition. I’m not trying to blame anyone, but I don’t see why this is a big deal to anyone with a basic understanding of why things cost what they do.

    • Consumerist-Moderator-Roz says:

      @thnkwhatyouthnk: Please don’t junior mod or criticize others for rules-breaking; it’s distracting (plus, in this case, not really entirely true).

      That said, everyone, please do not post “This is what you get for shopping at Wal-Mart” type comments. They are boring and lame. Thanks.

      • What The Geek says:

        @Consumerist-Moderator-Roz: Seriously Roz, I’m not trying to be a jerk here, but I’m trying to voice a valid concern to you, and I hope you take it as such. You singled out thinkwhatyouthink for criticizing others for rule-breaking, and yea, he shouldn’t do that. However, the post he was referring to by costanza007 was very much against the comments code, and you did not single them out at all. You’re the new lawman in a town with a really great community. With a few exceptions you’ve done a good job of it. Don’t ignore one offense in favor of hitting someone else for another. I know this isn’t the first time I’ve pointed something out to you, and I appreciate the fact that you haven’t taken it personally and taken any action against me for it. I only point this stuff out because I

        A. Believe comment moderation is definitely necessary

        B. Enjoy this community, and wanna make sure myself, and everyone else feel like they can have a legit discussion without fear of uncalled for moderation.

        Keep up the good work.

      • silver-bolt says:

        @Consumerist-Moderator-Roz: Also, I find the idea that you think anyone will read your reply when its buried and hidden under someone else’s less then interesting comment is funny.

  4. winstonthorne says:

    “That’s MY Wal-Mart.”

  5. failurate says:

    Maybe it costs more money to do business in areas where people don’t have money to do business?
    Maybe they have to increase prices to make up for the loss of sales volume?

    And poor people steal stuff.

    • Riddler says:

      @failurate:

      Maybe I’m off here, but I’d think it costs more to lease or buy commercial property in a wealthy part of town.

      • failurate says:

        @Riddler: In the wealthier areas, they can low ball essentials like food and make up the difference on electronics, sporting goods, cosmetics and other non-need based items.

        Those non-essential luxury things don’t sell in the poor areas. So if they want to make money, they have to mark up the essentials.

    • tylermorgan says:

      @failurate:
      Exactly. Look at the crime rates in these areas. I’d bet anything WalMart charges more due to a higher cost of doing business. I regularly shop at a WalMart in a high-income area, and one in a poor area – the ones where stuff gets stolen are the ones that must raise prices in response.

    • What The Geek says:

      @failurate: You’ve also gotta remember that in lower income areas real estate and other various utilities and services are cheaper. There may be a lower volume of sales, but that’s almost certainly offset by lower overhead for the store as a whole. Even wages would be lower in a lower income area, so strictly from a logistics point of view, these prices don’t make a lot of sense.

      • RStewie says:

        @What The Geek: Lower utilities in poorer neighborhoods, are you serious? That’s a crock. Electricity, water, etc, is the same, if not MORE in those areas than richer neighborhoods.

    • Parting says:

      @failurate: Unfortunately shoplifting has nothing to do with income. Some people are just crooked by nature.

      • agnamus says:

        @Victo: Really? I’d be excited to see these statistics that show no correlation between low-income neighborhoods and higher rates of property crime.

        • What The Geek says:

          @agnamus: While it’s not a statistic per se, I can give you a personal insight into retail and shoplifting. I worked for several dept stores in my eight hellish years in retail, and I can tell you that while straight up shoplifting may happen more in a lower income area (or a medium income area that’s accessible to a low income area by train), theft is universal. Let me clarify that a bit. I worked for a store in a relatively low income area – not necessarily a *poor* area, but lower income. Instances of someone walking in, and stuffing something in their jacket were high when compared to stores I worked for in other areas, however, the actual rate of shrink was almost identical. The reason being that while straight up shoplifting happened less in higher income areas, fraud happened more. People returning merchandise they didn’t buy at our store, people returning the wrong item inside the box of the right item, people returning a box full of cement instead of the actual item – all of these things happened way more often in the high income area store. I guess what I’m saying is regardless of tax bracket, there are always dishonest people.

  6. Etoiles says:

    It’s not just Wal-Mart that does this. Anyone who’s moved around a lot knows that chains that claim to have consistent pricing don’t. What an item costs at the Target in Brooklyn is not necessarily the same as what it costs in the Bronx, or in suburban Rhode Island / Massachusetts, or in suburban Virginia. (Those being all of the places I’ve tried Target in the last two years.)

    Anyone remember that episode of the Cosby Show where the old ladies protested the supermarket that was selling poor black people inferior goods at higher prices? That definitely still happens all over NYC every day, regardless of how illegal it is.

    • BeeBoo says:

      @EtoilePB: That is one thing that impresses me about Container Store. Their prices in Manhattan are the same as in all of their other retail stores and as online. Retailers have finally realized that despite higher costs of doing business in NYC, such as rent, wages, and general red tape, volume makes up for it.

      On the other hand, Manhattan is starting to look like any suburban mall. Hopefully they will close a few Starbucks and Gaps.

  7. jamesmusik says:

    This is so shady… the poor people are the most likely to be unaware about and/or unable to price compare and the most likely to assume that Wal-Mart has a good price.

    • Parting says:

      @jamesmusik: Then maybe taxpayers money should be invested in education, and not some random wars overseas?

      • agnamus says:

        @Victo: lololol yeah blame Bush–he’s responsible for Walmart’s internal policies and public education run by state governments. SATAN IS BEHIND EVERYTHING BAD, DOOD!!!1!

      • pecan 3.14159265 says:

        @Victo: I agree that there should be more of a focus on education for the poor, but even education programs don’t eradicate a lot of the mentality in poor areas, which is “we can’t survive, education won’t help us afford more food.”

        Why are the academic programs struggling? It’s not only because of money, it’s also because of the mentality that an education is something that needs to be worked for, hard-earned, but while you’re busy getting an education, the family needs to eat. Another problem is single parenting. One parent, multiple children, not enough time or energy to devote to providing and nurturing. Guess what loses?

  8. JohnnyP says:

    On a similar note walmart does carry “higher end” things in an area that has a higher income and “lower end” things in poorer areas. This was the case in Roanoke when I worked there years ago (I don’t shop there anymore either) But the bigger wm at the big mall didn’t carry the “nicer” more expensive electronics that the small one that is in a dieing shopping center that was across the road from a high end neighborhood did.

  9. balthisar says:

    We wouldn’t be having this discussion if only the government would step in and implement price controls on key necessities. Sugar, milk, gasoline, cars, and housing all comes to mind. The make it even more equitable, it could be done on a sliding scale based on income. We could have everyone carry something similar to a ration card that the IRS sends out every year after processing your return, and it specifies the surcharge. If you don’t have your card, then you pay the high surcharge. But if you remember your card, you get the lowest, regulated rate on your pound of sugar or the price of your gallon of gasoline.

    • British Benzene says:

      @balthisar: Yeah, price controls on gasoline worked well last time.

      We could stop artificially raising the prices of non-US sugar operations (tariffs), that might cause prices to decline.

      • failurate says:

        @EnglishC6H6 is British Benzene: Please leave my ultra enjoyable third world resort vacations out of this… (Dominican Republic suffers horribly due to our making their sugar essentially illegal.)

        • British Benzene says:

          @failurate: On the upside, it probably helps their tourism due to a low exchange rate with the (currently in the ICU on life-support) American Dollar (or an even higher gap with “real currency”). And that makes your vacation more enjoyable because not only are you able to get more for your money, but the more you spend, the more you help their people and economy.

          Have another Pina Colada, you’re being a humanitarian!

    • Parting says:

      @balthisar: You know what happens in those cases in real life ? Cards will be imitated, and a new level of black market will be born.

      And gasoline is not a necessity. Even, as USA’s citizen, you imagine it to be so.

      Read history.. This stuff was attempted before, and miserably failed.

  10. Gopher bond says:

    Awesome, I’m glad I get price discounts, quit trying to ruin it for me.

  11. costanza007 says:

    Well then the solution must be to just give up, complain, say that you’re forced into doing only one thing and that SOMEONE should do SOMETHING.

    I live in an area that abounds with lots and lots of Wal-Mart stores, yet amazingly there are still retail shops of all kinds still around, including hardware stores, clothing stores, grocery stores, etc. Don’t like Wal-Mart? Go down market to Dollar General or up market to Target.

    Want your sugar for less? Don’t settle for the injustice, band together with your fellow man, pool your money and score it from somewhere else. Vote with your dollars, have a little pride, think of something new instead of just laying down and taking only what you’re given.

    Guess I got confused about the difference between using your dollars for what you want and using your dollars in a monopolistic market.

    In Soviet Russia, Consumerist flames You!

  12. Ebonyknight says:

    I think that everyone is missing the point. If there is a legitimate reason for the pricing, why isn’t Walmart explaining it and settle it? It doesn’t make sense to not give a reason, unless they have to think up a “palatable” reason why.

    It’s not for us to speculate, it’s for them to explain.

  13. Ouze says:

    I saw a lot of people flaming costanza007 for saying if you don’t like it, don’t shop there – but what exactly was wrong with that statement?

    This is a free market. One poster listed off all the socioeconomic reasons why poor people can’t afford to go to wealthy neighborhoods to shop, such as no car, bus line doesn’t run there, no internet/cc etc. Why are any of these things Walmart’s problem? It’s a publicly traded business. They’re in it to make money. If they did anything else, they would not be serving their shareholders.

    Price gouging is illegal, and I’m not arguing for that. But raising prices when you have a monopoly is not only sound business, it’s sort of what we expect from american business (ref: cable rates rise at 3x the cost of inflation).

    If you don’t like it, make something happen. Form a commune, get organized. Force them to lower their prices through pressure you exert, but don’t expect them to feel guilty about making as much money as possible, because they shouldn’t. It’ business.

  14. htrodblder says:

    I believe the pricing at most Wal-Marts is somewhat deturmined by the store manager, they are expected to retain profit margins no matter what. I have noticed that even prices at 2 local Wal-Marts, both in the same type of areas, the prices will be slightly different.

  15. johnnya2 says:

    I can understand different pricing in different markets to some degree. The rent in Manhattan New York City is substantially higher then in Manhattan Kansas. That being said, WalMart is an evil empire trying to force its own employees to work the system to get health insurance so they do not have to pay for it, and when they come into a market competition is usually diminished. Wealthier areas can survive their invasion because shoppers are willing and will pay more for extra service or to not shop with curler wearing stretch pants 300 pound woman with no teeth lugging around her 6brats that are all under 5 screaming like they own the damn place.

  16. llcooljabe says:

    “Congratulations, Central Florida. You’ve realized that Walmart’s pricing is shady and inconsistent.”

    Or…there may be competition that we don’t know about

    or…there may be other factors here.

    Or…as the consumerist seems to so often say, Walmart is evil.

  17. dieselman8 says:

    Yeah, it’s sickening. But is it any worse than McDonald’s not having dollar value menus at all locations?

  18. incognit000 says:

    The logic behind this is simple.

    Wealthier people have the time and resources necessary to comparison shop. They often also have the luxury of visiting multiple stores on a single day, as they have more leisure time.

    Poor people do not have a lot of time to check prices, and often can’t afford to visit multiple stores in a single day to chase the lowest prices. It is often difficult enough for them to find stores which sell the things they need yet are open later than the places they work at, which often demand long or awkward hours.

    So you can massively increase profits by preying on the poor, who must shop at Wal-Mart anyway, and remain a “low price leader” for the rich who only shop at Wal-Mart for the bargains.

    the fact that poor people don’t have the money or connections to stop price gouging also helps out here.

  19. Canino says:

    “Price gouging” is the short term raising of a price substantially due to a sudden shortage or emergency situation. Having consistently higher prices at one location compared to others is not price gouging.

    I guess I’m not seeing the problem here. If other stores will not maintain locations in poor areas, then Wal-mart is taking all the risk associated with being in those areas, and they’re free to set prices accordingly. If the local people don’t like the prices, they’re free to buy elsewhere. Do you think they would prefer the alternative…Wal-mart shuts down and provides no jobs at all for the area?

    • Sugarless says:

      @Canino: Exactly what “risk” is Wal-mart taking by being in poorer areas? Companies do extensive research on whether the area will support their business, this is especially true with grocery stores.
      And by being in that area, Wal-mart, as it often does, puts local/smaller businesses out of business.

      Walmart is taking advantage of people that are already poor and should be ashamed. You don’t see the problem because it works for you NOT to see the problem with charging more to people who reside in poor areas. But if the demographic changed and “urban renewal” started in that area, Wal-mart would adjust the prices.

      • catastrophegirl chooses not to fly says:

        @CreoleSugar: actually, they are taking a lot of risk in pine hills FL. super high rates of vandalism and shoplifting. i am not saying it excuses the price increase, just a fact of the area.

    • @Canino: Wal*mart frequently comes to an area and sets rock-bottom prices to destroy local businesses. Once they’re sitting cozy, those prices go back up. People have lost their options for ‘getting a better price’ somewhere else in many cases.

      This used to be reported frequently and I’ve seen it with my own eyes. I remember when Wal*mart was started up in Price, Utah. The prices were incredibly low–low enough to attract all the business and deal with local competition. As soon as some time passed those prices shot up by a considerable percentage.

    • Hamtronix says:

      @Canino: Do you think they would prefer the alternative…Wal-mart shuts down and provides no jobs at all for the area?

      Yes! Because believe it or not, WM does not own a monopoly on jobs. Other better jobs would replace them. Jobs at companies that might be more invested in the area and actually put money back into the community.

  20. SuperSnackTime says:

    “The poor pay more” is an empirically validated statement (not just WalMart, not by any stretch, its systemic), but was WELL observed WELL before Wal-Mart was even around to exist in these types of markets.

    But the rationale of “Poorer people pay more = OMG Big Businesses are Racist Neo-Nazis trying to stick it to poor minorities!” is ridiculous when there are many more reasonable alternative explanations also available, they should also be considered before we jump on the Wal-Mart hate bandwagon.

    There’s a litany of reasons, but I think some of the reasons identified were:
    (1) Cost of doing business is HIGH (insurance, crime, distribution > cheaper rent)
    (2) Low income buy smaller quantities (re: don’t buy bulk)

    And some other reasons already noted by posters.

    Notably absent from the explanations was “BUSINESSES = FLAMING RACISTS”.

    • Overheal says:

      @SuperSnackTime: That still doesnt explain why Winn Dixie and Publix are not following the same trend in those areas.

      Its price discrimination pure and simple.

      • catastrophegirl chooses not to fly says:

        @Overheal: you’re right, it doesn’t. because the winn dixie is smack in the middle of pine hills in the worst economic area of it all. the publix and the walmart are a few miles away

      • SuperSnackTime says:

        @Overheal: @Overheal:

        While my explanation didn’t explain it alone, if you consider a few other simple factors, it certainly does.

        1. Winn Dixie and Publix, and I’m speaking across the board here, not to just 1 or 2 specific product categories, have a much higher markup on goods than does Wal-Mart. Hence, they can hold price more constant (speaking relative to Wal-Mart here) and still enjoy a notable profit, while Wal-Mart is more suspect to having to adjust price in the face of variation in cost.

        2. Second, presuming Wal-Mart = Winn Dixie = Publix is clearly a false assertion (one reason being point 1 above). These are NOT homogeneous firms selling to the exact same homogeneous target market, it would be rather myopic to presume businesses in the same geographic locale = serving the exact same set of consumers. Please. Geography serves as a useful heuristic to finding uniform groups of consumers, but that comment must be tempered with the knowledge it is only a PARTIALLY accurate variable in determining the types of consumers being served.

        3. Wal-Mart is filled with win and epic success in terms of using technology to manage their supply chain and pricing… simply put, they do it better than their competitors. It is quite possible that Winn Dixie and Publix OUGHT to be doing exactly the same thing as Wal-Mart in this instance, but they don’t have the internal competence that Wal-Mart has in optimizing their distribution and pricing.

        Point 1 holds, while Point 2 or Point 3 are possibly complimentary or an either/or in this specific situation.

    • xip says:

      @SuperSnackTime:

      Thank you! This is exactly why prices are higher is some poorer areas. I couldn’t have said it better myself.

  21. james says:

    Submit failed the first time so I am trying again.
    Anyway, I was saying that I’ve seen the same thing here in SF at Safeway. The Marina Safeway store charges less for most produce than the Mission Safeway store and has far higher quality produce. Charging the poor people more for an inferior product seems to be the American way.

    I think the companies figure that most of the wealthier people have cars and can go to a different store if the produce is no good at their local store and the poor people have no choice. Makes sense from their point of view although I find it appalling.

  22. EBounding says:

    Wal-Mart’s pricing may be “inconsistent”, but I’m willing to bet that there’s no competing stores in the poor areas. They have the right to set their prices at whatever they wish because they’re taking the risk of doing business where others will not.

  23. TACP says:

    They’re still the cheapest in the neighborhood. In my town, which isn’t very upscale, milk, eggs, etc. cost more at dollar stores and gas stations than they do at Walmart.

    • quail says:

      Just thought of something can could contribute to the different prices. Wal-Mart super centers get built wherever a community is willing to forgo taxes on the building. Are the Wal-Mart’s in the poorer communities the older ones that pay tax? Seem to remember a business discussion last year where someone said that Wal-Mart’s balance sheet has $112 million extra because they don’t have to pay tax on the stores they’ve built this century.

      It’s easy to offer a lower price on items when you don’t have to sock away money to pay the local tax man.

      • catastrophegirl chooses not to fly says:

        @quail: excellent point! i happen to know that at least one of those walmarts is at least 12 years old. [and looked older, last time i was in there]

  24. econobiker says:

    Some Walmarts in Mid-TN tend to generate other businesses. Aldi foodstores – for example- seems to love buidling/buying near Walmart in order to attract the same demographic as Walmart…

  25. econobiker says:

    Walmart does reduce prices to compete until the competition is gone and then it raises prices beyond the level it or the competitor originally charged…

    • EBounding says:

      @econobiker: If they did that then new competitors would come up by purchasing the bankrupt stores and would then undercut Wal-Mart’s high prices. But Wal-Mart is aware of this which is why their prices are generally low regardless if they have significant competition.

  26. quail says:

    The reporter did well by comparing WalMart’s pricing to other big food chains like Publix. When they demonstrate that pricing at Publix and the like is standard throughout several areas (rich and poor) it shows that Wal-Mart isn’t about best value. It’s about pricing according to what the market can bare. Pure capitalism. Legal, but not ethical.

  27. TACP says:

    In my experience, milk, bread, eggs, etc. cost more at convenience stores and gas stations than they do at Walmart. Where I live, the really poor areas only have convenience stores and dollar stores.

  28. eelmonger says:

    Around here we call Pine Hills “Crime Hills.” It has very high crime rates, and it’s where most of the murders in Orlando take place. I imagine this would lead to increased shrink at Wal-Mart, which in turn leads them to increasing their prices. Of course if that’s true it creates a pretty bad cycle of theft increase and price raising.

  29. Pylon83 says:

    As some have said, it’s simple economics. Supply and Demand. If there is no competition, prices stay high. In the wealthy areas, more stores move in hoping for a piece of the pie. Wal Mart lowers prices to compete. In the poor areas where no other stores want to compete for the arguably smaller pie, WalMart has no incentive to lower their price. Yeah, maybe it’s the “right thing to do”, but they are also a business. And those who are suggesting that the Government regulate prices, your in the wrong country. While that may be a bit harsh, this is generally a capitalist society. We work on a supply and demand market, and that system is threatened each and every time the government steps in and regulates prices of anything. Utilities are one thing because they are generally a granted monopoly, but in industries where competition can exist, the government has no place regulating prices of anything. If people don’t like WalMart and their prices, don’t shop there. If enough people do this, the “market” will have spoken and another retailer will come in.

  30. CountryJustice says:

    For anyone who is interested, the four Wal-Marts in Orlando that I can think of off hand (North OBT, Lake Margaret, Pine Hills, and Union Park) are all in “less affluent” neighborhoods by default.

    The notion of a Wal-Mart existing in an upscale neighborhood in Orlando makes my brain hurt a little.

    • eelmonger says:

      @CountryJustice: What about the one in the Lee Vista area, that place is pretty nice (except for the buried explosives). There’s also the Castleberry one and the one near UCF, neither are what I’d consider “affluent” areas, but they’re not exactly on the level of Pine Hills.

    • catastrophegirl chooses not to fly says:

      @CountryJustice: the one just past college park is new, but right on the edge between two economic areas. it was put in after i moved away but now i wonder at the prices there

  31. TMurphy says:

    I would guess in high income areas Walmart gets more sales in non-essentials, like ice cream. Walmarts in low income areas cannot rely as much on this sort of income, so the non-essentials cannot subsidize the staple goods.

    If the low-income Walmart isn’t to profit off of staple goods when most of their customers almost exclusively buy staple goods, where do they get their profits?

    I’m not saying they aren’t gouging the low income customers, but to an extent the pricing is necessary in order for the store to stay in business.

  32. techstar25 says:

    Wal-mart has been accused of this before…and has admitted it’s true. I remember one of my college professors pointing it out to our class. Wal-mart responded by claiming higher prices in poor areas were because of those stores having to spend more on security, and also to offset for losses from shoplifting.

  33. Carencey says:

    so for all the people complaining that Wal-Mart should be free to price the way they want and that this is a non-story, do you seriously think there is something wrong with the news channel and Consumerist publicizing this information? Why shouldn’t they provide info so that consumers, to the extent possible, can shop the way THEY want?

  34. boxjockey68 says:

    um..I hate to sound like a broken record, but (and it’s only my opinion mind you) They are such a BAD BAD store!

  35. Tyr_Anasazi says:

    I live in central Florida and have shopped at all the stores mentioned. I think this is business as usual for Wally Mart…

  36. mijo_sq says:

    Walmart is charging more since foodstamp pays for them…:)

    I’ve been to my local Walmart, and most of the people buying groceries pay with ebt.
    *ebt* – electronic benefit transfer

  37. coan_net says:

    I would guess it has to do with competition.

    If Wal-Mart is in a poorer area and there are few other stores, they can charge higher. (Not because they are in a poor area, but no competition to compete against.)

    In more wealthy areas, there are more stores – meaning more competition which means lower prices to try to stay ahead of the store next door.

  38. Tonguetied says:

    I can’t speak for or against this particular case but I do know that in poorer neighborhoods there are higher overhead costs; higher insurance, increased security, shoplifting and pillferage springs to mind.

  39. Barbarisater says:

    I’ve seen pricing differences at 2 Kroger’s located only bout 3 miles apart where I live. Now, admittedly, they are in 2 different towns. But the price is higher at one than the other. But it is reversed to this story. The higher priced one is located in the higher income area.

  40. Tankueray says:

    We have two super walmarts in a town of 100,000. The one near the highway is almost always higher, but it has more products and the cheapest gas in town. We have plenty of competition grocery-wise. The walmarts I go to in smaller towns with a (regular) walmart, parts store, grocery store, five-and-dime, etc. – the walmart is usually cheaper than the mom and pops, but higher than the super walmarts 50 miles away. Pretty much the only thing you can’t go somewhere else for in this town is toys, I don’t buy a lot of toys, so I stay out of walmart. Not for the usual reasons, it’s just super crowded and I can’t stand children, plus I find most of their goods are sub-par. Everything that I’ve ever had from there has to be replaced within a year or so.

  41. nikkimarie says:

    Oh my gosh! Walmart is conducting a social experiment on all of us!

  42. artki says:

    Wal-mart charges different prices at their whim? OUTRAGE! I demand that President Obama set prices on all merchandise in America – that’s the only fair way.

  43. Ixnayer says:

    Autozone does the same exact thing. Brake pads may cost $25 bucks at one store and $28 at another store a few miles away. Although its vice-versa of what wal-mart did. the prices are cheaper in the lower income areas.

  44. catastrophegirl chooses not to fly says:

    my response includes a special knowledge of the area, since i grew up in central florida. the best way i can describe pine hills FL is to say that a friend of mine who knows i am from the area was recently in orlando on a business trip and had to run an errand to pine hills – she called me from the store parking lot and said ‘oh my god, is it safe to get out of my car?’
    there is NO way that walmart could miss the notorious poverty of the area. but also, there is not a lot of competition for them to drive their prices lower. not too many stores are willing to locate in a place where the widely recognized local nickname is ‘crime hills’

  45. shufflemoomin says:

    Wow, I didn’t know things worked like that in the US. If I go into an ASDA here in the UK (owned by Walmart) and saw a product at a certain regular price, I would assume it to be the same price in any branch of the same chain. How can a chain charge different prices for products in different stores? Seems confusing and pointless.

  46. Invective says:

    As a former business owner and manager, there is a right way to do business and a wrong way. The right way is to price competitively as to what the market will bear, consistently and fairly. Of course one can ‘capitolize’ on the poor simply because it’s easy. The poor have no representatives, they tend not to be very well organized and tend not to be very well educated. What if I capitalize on you though. What if I think of a way to take everything it is you have. Would you give me kudos and reward me for being ‘innovative’, or would you want some place, or someone, or something to represent you and your pain. Some of the arguments here pretty well disgust me, as do cruel people and mean people. Laws are supposed to protect consumers from businesses like this and *not* to protect the rights of the business to act it in a predatory way. PAC money insures these businesses the right to pray on Americans.
    As for Wal-mart itself… There are at least two stores in northern Idaho doing exactly the same thing as described in the story mentioned above. Post Falls Idaho Wal-mart store discounts its products because of the intense competition in the area. However, the Smelterville Idaho Wal-mart store, in a clearly depressed and rural area, has actually raised the majority of their prices. To add insult to injury, they also call a lot of those raised prices, “Roll Backs”. Wal-mart knows this because I have sent them emails about it, but of course it’s not a subject they want to talk about, so they ignore them. So where do you shop then if you live in a rural area? Well in Smelterville’s case, it’s 50+ miles. Wal-mart is clearly taking advantage of high gas prices and marking up their prices, knowing people more often than not, will choose not to drive the distance in times like these. How American is that? My answer is it’s not, it’s cruel.

  47. Skipweasel says:

    I don’t know what it’s like in the States but in the UK we have a major problem with energy companies gouging poor people. We pay Direct Debit and get our gas and electricity for about 30% less than neighbours who can’t for one reason or another get a credit meter. That’s just not reasonable.

    The government keeps saying it’s going to do something about it, but nothing much happens.

  48. Keavy_Rain says:

    I thought this was well known?

    Back in 2005 I went to one Wal-Mart and found “The Star Wars Trilogy (With bonus DVD)” for $45 and at another Wal-Mart across town found the same DVD set for $38. When I asked a clerk about it she admitted that Wal-Mart does price adjust according to many factors, including but not limited to stock on hand, popularity, and local competition.

    Doing this on entertainment products (Especially when supplies are greatly different) is one thing but doing it to basic food items just because you can seems strange.

    Unless they forgot to justify it with the “Shrinkage” argument. Wait, ignore that. I shouldn’t be giving away great ideas like that for free.

  49. RedwoodFlyer says:

    Maybe they should just sell this stuff from the display fridges at APPLIANCE DIRECT? 1 Gallon of milk, $2, “In the box”…whiter, 2 percent-ier, more nutritious…

  50. baristabrawl says:

    It’s called “zoning.” Look into it. Every store does it. When you log on to a website to find out the price of something, why do you think they have you put in your zip code?

    Target does it, too. If I need 4 of something and I can only get 3, I go to a different target and the price is different.

    Altho, Wal-Mart does suck.

  51. synergy says:

    I’ve noticed the complete opposite, at least in the past. The richer neighborhoods always had higher prices for things like milk. Not that it was a huge difference, but a nickel to a dime higher with every gallon I’m sure eventually makes a nice pile of change.

  52. QquegChristian says:

    The WalMart I shop at is in a richer area of Central Florida… but I’m getting about sick of “Rollbacks” that only last a few weeks before they roll right back up to the original price. A sale is a SALE and a “Rollback” insinuates something a little more permanent. What I can pick out particularly is 12 packs of canned soda. They were $4.78 and then a “Rollback” to $2.50. Two weeks later they were right back to $4.78.

  53. Trojan69 says:

    Since Publix was used as a “virtuous” comparison, I thought I’d share my findings about them.

    When I lived in Columbus, GA, two Publix stores were built. One, in a high-end “prestigious” location, and one in a more established, but decidedly lower status area. The store at the high-end area was bigger.

    Anyway, the prices were identical. But, the service was far, far, better at the “rich” store. I asked the managers at each store about this and they explained, without apology, the volume of business and the average profit per check, was much greater at the “rich” store. Thus, much more labor cost was justified.

    Kind of the “shrink wrap” solution when it comes to labor cost, wouldn’t you say? Same cost, less service.

  54. coolkiwilivin says:

    There are a ton of factors here like: Was said store forced to make a donation to local community groups in exchange for being allowed to build. Were there city taxes in play in that community that aren’t in play in other communities. The same goes for gas. Why do gas prices vary widely among same chain of stations all throughout the city? Yes Walmart could be very wrong here but there could also be a lot more reasons than just Walmart is trying to screw poor people.

  55. rjflyn says:

    One thing not mentioned in this case is Mt Dora is in the middle of nowhere IE it costs more to get the stuff there vs the other places which are literally off the freeway.