Market Forces

I once had a supermarket client whose marketing director had a confrontation with a local Black community organizer. Basically, the issue was this.

The chain had supermarkets in both the inner city and the suburbs — but had a different price structure for the two groups. The inner-city (majority Black customer base) stores’ prices were as much as 25% higher on various items than those same items were sold at the suburban (predominantly White customer base) stores.

Of course, “Barack Obama”* was furious because Black people were paying more for products in their local stores than White people were paying in the suburbs. When he demanded that the chain change their pricing policy, the marketing director (a flinty little Irish guy, “Danny O’Neill”, himself from Chicago’s South Side) flat-out told him that the chain wouldn’t budge. As for the racism charge, O’Neill pointed out to Obama that while most stores in the suburbs had a “shrink” (stock loss by theft) percentage of about 0.75%, the inner-city stores’ shrink ranged from 3-5%. (To make things worse, their sole store on the North Side — with a 90% White customer base — had a shrink factor of only 0.5%, a number I’d discovered while preparing the data for this meeting.)

Of course, the higher shrink factor meant that those stores were less profitable — and, as O’Neill reminded Obama, the chain was in business to make a profit: ergo, the profit margins had to be raised to overcome the shrink. The meeting ended thus:

“So you’re not going to lower your prices in your city stores?”
“No. If we do, we’ll have to close the stores because they won’t be profitable.”
“But what am I going to tell my people?”
O’Neill was merciless. “Tell ‘your people‘ to stop stealing from our stores.”

I’ve told you that story so I can tell you this one.

Apparently, some idiot is suing** Wal-Mart for keeping various “Black” beauty products locked up behind glass doors, while their “White” equivalents are stocked on open shelves. 

Would anyone care to guess why this is?

And if you answer “rayciss” or variant thereof then you have to go and stand in the corner wearing a DUNCE cap. And I don’t care if you find this punishment “hurtful”; you’re a dunce. As is the plaintiff, and as is the judge, if he doesn’t throw this silliness out of his court with a scornful laugh.

However, as Wal-Mart is no longer run by Sam Walton but by various lesser Waltons, the retail giant will probably cave lest they be accused of being Literally Worse Than Hitler or something.

And their profits will plunge, and I will utter a merry laugh because they’ll deserve it***.

*Yes it was in Chicago, but no, it wasn’t actually Future President Token.
**Note that “Shaniqua” has engaged the services of legal über-vulture Gloria Allred, whose presence is an infallible indicator that this lawsuit is a crock of shit.
***Irony Alert:  note what’s for sale at Wal-Mart. I can’t make this stuff up.


  1. Over 40 years ago I was a manger of a TG&Y ‘family center’ store, kind of like Target or Kmart type store on the South side of Oklahoma City. We reopened my store after a tornado had taken the roof partly off (Oklahoma where the wind comes blowy all your stuff down) and we were not fully merchandised for the area with ethnic products that were not carried in our central warehouse.

    A young black woman came in looking for a specific product and when she asked our department manager if we were going to carry that specific merchandise she was told that we should be receiving those items soon. The reply from the customer was, “Oh, you means you don’t have all your N***er Sh*t in the store yet?” And the reply from the woman in charge of that part of the store was no, but we will be getting it soon.

    When the department manager came back and relayed the information to me she also said the ethnic stuff would turn fast, a lot faster than it would be rung up on the cash register and, turn out she was right. That particular was a total pain to run because of the shrinkage due to theft and the cost of extra off-duty police to help us catch shoplifters and in those days and that neighborhood it was not catch and release, the police were good about coming out and picking up our catches which helped some when certain specific parts of our customer base understood the risk factor of getting caught. It is my understanding that a lot of companies don’t prosecute theft that much anymore which of course really increases the loss factor.

    1. Not just the stores; in any number of jurisdictions (mostly blue), the cops won’t even come out to take a report on anything less than $500 to $1000 unless there’s blood involved. And if the blood is from you defending yourself or your property, you have better odds of being charged than the perp(s).

      Colin Flaherty has multiple books with links describing this on Amazon.

  2. It’s like the family of that guy who got shot recently (for shoplifting or b&e and robbing a house, I forget which): how’s he supposed to buy clothes and stuff? You bunch of racists!

  3. Had a friend that was in retail loss control. He maintained that 2/3 of the losses were from employees rather than customers. Further, that 20% of the employees would never steal, 20% would always steal and 60% would go with the dominant culture. Not that this detracts from your original point.

  4. That is so right about inside shrinkage, especially when companies try to run with minimum wage and overworked poorly paid managers who feel now ownership at all in the company. Some retail companies who have great employee retention and profit sharing probably come out way ahead on controlling this factor. At the same time in both retail and food services I would not be surprised if the information richard posted above is not totally correct.

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