Don't like it? Don't shop there.

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.

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).

"That's MY Wal-Mart."

@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.

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.

@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.

@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.

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.

@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.

@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.

@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

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.

@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.

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.

@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.

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.

@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.

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

@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.

@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.

@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.

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!

@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.

@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.

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

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

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.

@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.)

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.

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.

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.

@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!

"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.

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

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.

"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?

"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".

@dieselman8: Apples and oranges.
Deciding to eat at McDonald's is not the same as being able to buy basic goods like sugar, milk and bread which all grocery stores see as anchor items.

@dieselman8: that's because their independently owned and operated. (Participating locations only, and crap like that)

@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.

@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.

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.

@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.

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

@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!

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.

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.

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...