To those on the inside of retail trade it’s known as the “hook” – purposely lowering the price of a hot commodity to draw in more customers. Once the customer has bitten the hook, it becomes the hope of the business owner that the patron will continue to shop and purchase items priced above retail.

We, the consumers, see it each and every day – “buy one, get one free” or are drawn to a towering rack of soft drinks priced at rock-bottom prices. Smiling at our good fortune, we fill our shopping carts with these inexpensive items, but as we make our way around the store we unknowingly purchase other items that more than make-up the difference for the retailer.

Shoppers, especially my wife, love to scan the sales papers and then the shelves themselves inside of stores looking for that key word – SALE. Signs bearing large letters – 20, 40, 60 percent off – attract shoppers faster than a moth to a light.

The “hook” works everywhere imaginable – supermarkets, department stores, building supply and garden centers, just to name a few.

I recall years ago researching information to use on an article concerning cut-rate gas outlets. In today’s world with all the trouble in the Middle East, cut-rate gas is as distant a memory as the hula hoop. Let someone in an OPEC nation sneeze and the price at the pump automatically jumps by 10 cent a gallon.

Anyway, back to my research. I remember an article I found online penned by Dr. Mike Walden of the North Carolina Cooperative Extension Service. He was the first person I recall talking about the “hook.”

He explained the concept of predatory pricing – “a seller, often a large firm with substantial resources, purposely sells a product below cost in order to drive competitors out of business. Then with the competitors gone, the theory goes, the remaining seller will be in a monopoly or near-monopoly position and will substantially increase the product price.”

With the price of gas now going through the roof, consumers here locally and all across our nation are looking for bargains to help offset the extra cash they’re shelling out to fill up the tank.

Without the presence of many of the “big box” retail giants here in the Roanoke-Chowan area, we basically have to rely on smaller chains or mom and pops to purchase our goods. I’m fairly sure they use “hooks” as well, just not to the extent of their larger and more powerful retail brethren.

The ever-increasing price of gas gives us more reasons to spend our money here at home for the simple reason that it’s becoming more expensive to drive 50-60 miles out of the area to purchase groceries, etc.

Our local merchants have been here all along. They’re the ones that drive our local economy and, hook or no hook, we need to support those on which the foundation of our communities was built and they need our support in these tight financial times.

 

Cal Bryant is Editor of Roanoke-Chowan Publications. He can be reached at cal.bryant@r-cnews.com or 252-332-7207.