More and more media outlets are catching on to the fact that Circuit City’s liquidation “deals” aren’t as hot as normal sale prices.
First, here’s a report from Cincinnati’s WCPO:
We Compare Prices
* A Samsung 46 inch LCD TV, Model #LN46A850: Originally $2,599, now on sale for $2,339…but we found the exact model on Best Buy’s website for $2,099….$300 less.
* A Vizio 42 inch LCD TV, Model #SV420XVT1A: Was $1,199, now marked down to $1,079…but we found the same model number TV at Target for just $1,029… $50 less.
* And a Panasonic 50 inch LCD TV, Model #TH-50P80U: Was $1,399, now $1,259…but both Amazon.com and Beach Camera had it for less than $1,000, a at least $300 less, and at Beach you even get free shipping!
One of the companies running the sale defends the prices….telling the Los Angeles Times “we have commitments to banks and creditors who are expecting a certain return.”
But you’re not committed to shop at these prices…especially since all sales are final, with no returns.
And from Tennessee, an interview with a woman who went to Circuit City looking for Wii games — only to find out “we got up here and it’s higher than it is at the normal stores.”
TheStreet.com has compiled a list of reasons to avoid liquidation sales entirely, not least of which is that the sale prices are crap:
In fact, most liquidators will actually raise prices to full retail or a token 10% off because they know the store will be packed with people. That means prices at liquidation sales are often higher than you could have gotten at the store before it went into bankruptcy. Those “75% off or more” discounts that you are imagining won’t arrive until the final week of the liquidation sale — a time when anything you would really want will already be long gone.
For those of you looking for some additional analysis of the economics of liquidation, check out this article from Portfolio:
The fact is that liquidations tend to be pretty bad places to find a bargain. It’s worth remembering that a liquidation isn’t the kind of sale put on by a store which needs to clear out their shelves in order to make space for new merchandise: there’s no new high-margin merchandise coming in for shoppers to buy, and so the opportunity cost of keeping the old merchandise on the shelves is actually very low. Circuit City stores are going to be open through March: there’s little point in having them simply sit there empty thanks to too-big early discounts.
The LA Times has some interviews with pissed off shoppers who wanted bigger discounts:
“I’ve been waiting in line for half an hour each day based on employees’ promises that prices could come down, but they haven’t,” said McGinness, a TV commercial producer from Los Angeles. “It’s very disappointing.”
Big Sales Don’t always mean the Best Deals [TriCities]
Circuit City Closing Sale: Undercover Investigation [WCPO]
5 Reasons to Avoid Liquidation Sales [TheStreet]
The Economics of Liquidation [Portfolio]
Price is not right for many shoppers at Circuit City closeout sale [LA Times]