The NPJ received an email from a reader asking the following question:
Can someone explain the 10% surcharge on my receipt and why the prices showing on the shelves are not the price we pay at the register?
We decided to look into this matter. Looking at the front of the store it has the Piggly Wiggly logo and brand name, but underneath it says “A Cost Plus Food Outlet.” What does this mean?
The important thing to not is the “Cost Plus” phrasing. This means that all items will be offered at the cost to the stores plus 10 percent. The reasoning behind this change in pricing is that with cost plus 10 percent pricing, every item in the store will be on sale every day. This is meant to be a savings to customers between eight and 10 percent and possibly more on everyday purchases.
This is not a new business model as we found news articles on other stores in Baton Rouge and Brundidge Alabama (to name a few) dating back to 2011 and 2017.
This model is geared toward the store making more money by selling at a greater volume. When customers buy items, the price on the shelf reflects what the store paid for them. Shoppers are then charged a 10 percent add-on at the cash register for each item.
We decided to check this out. We bought three items at the Piggly Wiggly, then went and bought the same (or comparable) items at Super 1 and Walmart.
The items we purchased were:
1. A pack of Oreos
2. A can of flavored sparkling water
3. A bottle of Powerade
Side Note: As we were purchasing our items for comparison we overheard an employee trying to explain why the 10% surcharge is added to the overall bill. The explanation was given a few times as this subject seems to be very confusing to customers.
We think the receipts from our purchases speak for themselves. Is the “Cost Plus” grocery model really saving the customer money?