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What You Pay At Target, Wal-Mart Depends On Where You Live

Different Neighborhoods Have Different Prices

POSTED: 3:18 pm MST November 29, 2005
UPDATED: 2:00 pm MST November 30, 2005

More often than not, when you go to the store, you're looking for a bargain or two but what may be a bargain at one store in one part of town could be much more expensive at the same store across town. Why do different neighborhoods have different prices?

For years at Call 7 for Help, we've heard from viewers who bought something at one Wal-Mart then found it was cheaper at another Wal-Mart. Or they got a good price at one Target only to find a better price at another Target, Consumer Champ Bill Clarke said.

The difference isn't just a few pennies, sometimes it's several dollars.

7NEWS checked prices on just five items -- Tide laundry detergent, Sparkle paper towels, Huggies diapers and Downy and Bounce fabric softeners.

At six Wal-Marts all across the metro area -- from Thornton, Westminster, Lakewood, Denver, Aurora and Parker -- there were different prices for different neighborhoods. The same is true at six Target stores in those cities as well.

Most of the products at each of the stores were just a few cents different. But Thornton shoppers were getting a sweet deal on Sparkle paper towels. They're $4.74 at both Target and Wal-Mart in Thornton.

Elsewhere, both chains were selling them for more than $5, as much as $5.17 at Targets in Denver and Aurora.

But liquid Tide produced some real shockers. At Wal-Mart, it sold for $12.83 at every store except Lakewood, where it was $9.58. That's a difference of $3.25.

"Clearly, there are going to be different price points in different stores, within the same chain," said University of Denver marketing professor John Burnett.

Burnett said big chains like Target and Wal-Mart price according to the neighborhoods' ability to pay.

"They just match up what all the market will bear. It's simply supply and demand," said Burnett.

And there is substantial difference.

At Target in Lakewood, 7NEWS paid a total of $32.70 for all five items. At Target in Parker, the total was $35.68. That's a difference of almost $2.98. Other targets were somewhere in between.

At Wal-Mart in Lakewood, the total was $31.70. At $35.47, the Wal-Mart in Parker was $3.77 more expensive. Again, the others were somewhere in between.

Burnett suspects customers paying more just means more profit for the chain.

"It doesn't cost Wal-Mart more to merchandise in that store," said Burnett.

7NEWS couldn't find any real correlation between the prices and median incomes in the six neighborhoods and neither store would take questions.

But both Wal-Mart and Target sent us statements.

Wal-Mart said:

    "Our goal is to bring our customers every day low prices in the communities we serve. Each store strives to be competitive with the retailers in their own neighborhood. All of our merchandise starts with the same basic price. However, our store managers have the prerogative to lower prices to meet or beat the competition in their neighborhoods."

Target said its prices are based on being competitive and may vary from one location to another. But it adds it does not adjust prices according to demographic or economic conditions.

It said:

    "Target considers several factors in determining everyday product pricing in its stores. The primary factor is the competitive marketplace. Target strives to provide competitive pricing that is similar to other retailers in the same locale. Product pricing for select items at an individual Target store can be impacted by prices on identical items at other nearby retailers. Therefore, it is commonplace that prices on selected items may vary from Target store to Target store within one metro area. This is especially true in markets with a high density of Target stores as well as competitors like Wal-Mart and Kmart. Target's pricing strategy is based purely on being competitive in the trade market area. It is not based on demographics, income of an area or location. The same pricing scenario is true for most national retailers. Target does not adjust prices between its own stores out of fairness to the guests who routinely shop their local Target store and so that we may remain competitive within our local communities.

But they don't deny what we found to be true -- you live in different neighborhoods, you pay different prices.

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