Ever wonder how stores decide how/when to mark down stuff?

[Too_Many_Tools]

I have.

As we all know, the best buys are when the product is discountinued, changed in some manner (sourcing, packaging, etc.)...shelf space is valuable and the few items of inventory can be discounted to next to nothing because the real profit is in getting the next item on the shelf.

So why don't all box stores discount the same item at the same time?

Well each store manager is judged by his store's performance..and some managers like to hold out for that last few dollars per item while others will cut the item to the minimum just to get it off the shelf.

Also different managers have different amounts of "discount accounts"..some can discount deeper than others.

In my experience the higher the sales volume of the store, the faster and deeper the discount. The stores with slower and smaller sales will not discount as deep or as quickly. Many times the store with smaller sales will have the larger number of unsold items left over...and with the smaller discounts.

The variability of the discounts per store managers is why big box stores will not price match against each other...they will not pit one manager versus the other.

Anyone else want to add info?

 

[RedFordTruck]

Ive noticed this with Home depot and their Christmas Promo deals. Some stores mark down different items and items by different amounts than other stores.

Example... 2 Home depots that are 6 miles apart... Store #1 has the 10 piece T-handle allen wrenches for $7 while the Store #2 has it regular price for $10.

They have a 2-piece air drill set that original price is $89. Store 1 has it for $49 and store #2 has it for $35

 

[appleton]

Another big factor is competition. There was a quasi-scientific article by WSJ a week or to ago that analyzed Staples pricing discrepancies across the US, and the biggest correlating factor was proximity of a competing supply store.

Most all of my local lowes, HD, menards, etc are in lock-step with each other in terms of lumber and commodity prices. I'm sure what the competition is selling and for how much dictates how quickly you need your floor space cleared up.

 

[Boxheadmr]

another reason is the amount of stock they have in the store or in the warehouse.
most markdowns systems have a date or length of time that they want to clear the shelf space for the new planogram. if the particular store has a lot of stock and based on there rate of sales the system will discount it at a higher rate to assist in clearing.
these planograms are usually reviewed at certain time of the year usually in advance of the new season so keep your eyes out in off season for items that are being selected.from
the range.

 

[cascivic]

Some of what your saying is correct but it's not that cut and dry and is not left up to the store as much as you think.

Most markdowns come from corporate(usually buying dept). The price of the markdown is based on a lot of factors. Was it a guaranteed sale? Did the buyer go back to the vendor and say your item sucked wind we will give 25% if you cut. A discount of 25 on the next item. Also a lot ofhigher end items get rtv'd back to the vendor to either be resold or sometimes you send it to a third party that packages for a another store (think big lots etc)

Where it comes to the store is usually called discretionary dollar markdowns. This is usually left up to management to use how they please(this would almost always be used to get rid of bulky stuff or odds and ends type stuff). Alot of times they want you to bring stuff to a price point and group it all together on a end cap or clearance section. This is where you'll usually get your best deal but to mark a whole program of items down would usually eat too much of this money. Depending on size store volume etc the store might only get a few grand in $. And it goes QUICK

 

[Too_Many_Tools]

An example...

There is a location that has 4 Walmarts within less than 10 miles of each other.

When tools are discounted...

Walmart #1 - tool not discounted for over a period of a year
Walmart #2 - tool discounted by 1%
Walmart #3 - tool discounted by 95%
Walmart #4 - tool discounted by 15%

Bear in mind that Walmart has the best JIT computerized inventory system in the world

I have seen this over and over at other big box stores like Lowes, HD, Target.

And of the Walmart example I have shown, none of the managers would price match the other sister stores...and several of them knew of the other store's lower pricing.

 

[unslow1]

All our price markdowns come straight from corporate. There is a list printed every morning with the incoming email. It has store goals, push items and a list to mark up or down. There is also a program already put together that will print the actual shelf tags. The new prices are already in the computers. The manager gets almost no say in this. If he has a problem or question he has to email corporate. We are supposed to have the new tags up before we open if possible. If it's a really good price on something clearance the employees will pull what they want before we even open. Prefer not to say where I work because I'm not supposed to say how this works.

 

[Higgins]

We have a local WM manager who never marks down anything..... The biggest example is his garden center.
There will be plants in the garden center that are almost dead and they are at full price. Plants don't get "Discounted" till the vendor complains about them. To make matters even worse, the vendor isn't allowed to pull stock to be inventoried and dispose of. A WM employee must do that!!! Guess how frequently that happens.......

 

[03protege]

When I worked retail there was several stages before the store had to send it back to the main warehouse where it was then sold for nickels per pound to a liquidation company.


Items would get flagged that they were going clearance, this would be before any discounts were applied. Usually these items would become part of managers specials and we could bundle them and get rid of them while there was still margin in it.

The next step Items would have a discount automatically applied to it. Some items could be discounted only a few percentage points while others may be slashed down 75%. These prices also varied between stores and there was no particular rhyme or reason as far as we could tell.

The next step was "end of life", this is a 30 day mark before the items are sold by the tonnage and the store takes a blood bath. Often times the computer will automatically apply another price reduction and we would often manually mark them down even further. Depending on who you were working with and what your attitude was some customers got items for next to nothing.

 

[mmack66]

Nope. Is there a hot deal I missed?

 

[03protege]

Nope. Is there a hot deal I missed?

Every single day.