h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

What about phony price wars? The general tactic of supermarkets seems to be to put the price of staple grocery goods down as low as possible (even selling at a loss), as these are the goods which consumers take most note of the price of. The supermarket can then charge as much as it likes for the other projects, and the consumers think they are getting a good deal.

Psychology can play a big part too. Merketing and advertising are more important than price and quality in todays society. People buy lifestyles not products

I agree that this is a major issue that exploits the unprepared shopper. However, this does fit into the model as it is presented.

Advertising, especially that which attempts to mislead consumers, is a technique of weakening the Buyer's strength. One method of weakening strong buyers is to mis-inform or mislead/distract them from unfavourable facts. Promising a consumer that you are saving them money is one thing, but a few low prices on recognizable items is misleading evidence that if a few things are cheep, then on average they must be saving money.

Hmm..

Well it's all interesting anyway. Even if I'm not one who subscribes to the 'free market' model.

I don't know how much diluting the strength of the buyer supermarket style loss-leading does.

I did the shopping for our family as a teen (I liked doing this). Since I was a kid, no one was paying me for my time. Also, part of the starting set of postulates, here in California, you must have, and in sufficient quantities, what you are advertising.

I knew what my family needed, and in purchasing the loss-leaders I would save enough money compared to the cost of bicylcling or driving to each store to make it worthwhile to go to each and every store. Furthermore, since I was at each store, I was able to price each and every item I knew we needed that was not on advertised sale. After doing this for awhile, I also got a good idea of the cheapest stores in general, which carried the foods my family would actually eat, and a good idea of where the cheapest foods of any particular kind were, for those times when the purchase could not wait until next week.

Now that I am an adult, I don't pay attention to the loss-leaders at all, because I am looking to spend the least of my free time shopping, and supermarkets are cut-throat here in LA. A store can charge me a little bit more, and I will bear the cost if the check out line is really short!