Seasonal Goes Discount

Tuesday, August 25th, 2009

by Dennis DiPaolo
April 2009

Every year I walk through all the stores in our area that sell pool supplies and check to see that our prices are in line. Sometimes I’ll raise a price, sometimes I’ll lower a price, but generally nothing is surprising. It’s a competitive market, so no one is half the price (or double the price) of the competition. The swing is mostly +/- 5%, with the outside at 25%.

Cheap brands are cheaper than expensive brands. High quality is more expensive than low quality. Not counting a short-term sale, we all pay roughly the same price and mark-up roughly the same.

Last July 3, though, when I wrote down every price at Wal-Mart and Lowes, I also wrote down the ingredients. Before I adjusted for ingredients strength, we were all pretty much in line. We were each the cheapest about as often. Looking at ingredients, however, was a real lesson.

I knew how “discount” stores were changing the strengths of expensive chemicals. That’s been standard for years. I was just amazed when I saw cheap chemicals that were not at 100% strength. For instance, a bottle of 70% pH increaser that seems 15% cheaper than our 100% pH increaser is actually 15% more expensive than ours to use! Here’s the upshot: on July 3, 2008, on an assortment of 23 items and sizes, Wal- Mart was cheapest three times, Lowes was cheapest four, and we were cheapest sixteen times!

To be fair, those 23 items were the sizes used mostly by our customers who generally have pools between 4,000 and 50,000 gallons. If your pool is less than 1,000 gallons (the sizes more commonly sold by Wal-Mart), they are a little more competitive. We have the results in the store, and we will revise them once the season gets rolling again. Right now we are having a huge sale that gives us an unfair advantage over all the other stores. Also, some items still have last year’s price tags on them! By late May, most everyone’s prices will have settled down for the season.

So here’s my first lesson: we have an expensive image because we have a nice store and good help. We carry medium-to-high quality brands and products. Our cheapest pool chemical brand (at least until this year) is still a premium brand: Target™ Pool Supplies.

“Discount” stores have a cheap image, but are not cheaper than us. They beat the really, really small stores, but not the big ones like us. That was not the actual lesson. The lesson to me is that I know better and I had not noticed how much we beat the “discount” stores. So how would I expect you to know?

Second lesson: since the market crash last October, sales at Wal-Mart and McDonalds are up while sales at department stores and casual restaurants are down. People hearing all the gloom and doom, even though there has been no change in their income, would rather choose price over value even when it’s not necessarily cheaper in the long run.

So what are we doing about it? First, our April Sale is 25% off the lowest marked price of the entire pool department, not 20% off like it has been for the past nineteen years. That’s money out of my and Jeanne’s pocket to give you an economic stimulus to BUY NOW. It is also meant to take the sticker-shock out of a few products that went up a lot world-wide this winter: vinyl, chlorine, and PHMB.

Second, we are bringing in lots of lower-priced alternatives. We will try to keep them on special “Discount” shelves so that you can tell the difference. This is a decision that has taken lots of second-thoughts and trepidation. You have come to expect only high-quality from us.

That’s why we are segregating the cheaper brands. Some of them, like generic drugs, are just as good. Sometimes they are not as strong – but if you just read the directions and use more, it ends up doing the same thing. A plastic leaf rake won’t last as long as an aluminum one, but maybe it will last until you get another job and that’s all you need for now.

Here’s our promise to you: we are not down-grading anything that we already have. The quality that you trust is still here. We are just adding some new products that would not normally have made it into our store until now. We will still stand behind everything that we carry. All of the new items are an excellent value, and we will mark everything clearly, if it is not obvious as to what the difference is.

Here’s what we ask of you: some trust and patience while we learn how to work with this experiment. If it is not obvious to you what the difference is, ask us. And please give us a try if you were tempted to downgrade to a “discount” store this year. If you currently buy your supplies at a discount store and just come to us for the free advice and water testing, shop a little harder. We beat their prices on every quality product, and now we are also carrying the same quality that they do.

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