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American Morning

Interview with Phil Lempert

Aired August 15, 2002 - 08:40   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BILL HEMMER, CNN ANCHOR: America has become a nation of bulk buyers. Supersized supermarkets now offering customers mass quantities of everything from pickles to pillows. Shoppers flock to the warehouse stores expecting that more will, in the end, will cost less. But is bulk buying really a better buy?
Supermarket guru Phil Lempert is the author of "Being the Shopper." He's live in L.A. this morning -- Phil, good morning to you.

PHIL LEMPERT, AUTHOR, "BEING THE SHOPPER": Good morning. When is the last time you went to a warehouse club?

HEMMER: A couple months ago, Atlanta, Georgia, as a matter of fact, but I don't necessarily buy in bulk. Let me ask you something, Phil. I want to go ahead and put something up on the screen here, just to give a couple examples here. The first one is Wrigley's PlenTPak. It says that you can get 17 sticks for a buck, or you can get -- for 25 cents, five sticks in a pack. The bottom line, you can buy four regular packs and get three sticks more for that purchase. That's one example. Here's another one. Country Time Lemonade, 30 ounces versus 20 ounces. If you compare the cost per ounce, the bottom line in all this, Phil, is that the larger size actually costs 7 percent more. I would imagine things like this do not surprise you, right?

LEMPERT: Not at all. In fact, we have been talking about warehouse clubs and the fact that walking in, the idea of concrete floors, piling it high, making it look like an airplane hanger, is absolutely great merchandising. In fact, the other aspect that warehouse clubs have done really smart, and also taught supermarkets a lesson is called sampling. You go into the stores, you see five, ten, 15 different sampling experiences, and that puts you in a great mood to shop, and you think -- not necessarily reality, but you think you are saving money.

HEMMER: These are interesting marketing ploys, and I think they go hand in hand with sales (ph) too. A couple more examples, just for our viewers.

Peanut butter now, Jiffy (ph) four-pound canned Family Size, 64 ounces versus the Creamy Jar, 18 ounces. If do you the math throughout all this, Phil, you find out the larger size actually cost 4.5 percent more.

Here is another one. Kraft Cool Whip Family Size, the 16-ounce compared with the eight-ounce, the smaller version, almost a penny more per ounce. How do you advise consumers when you're doing the shopping in these large supermarket areas to go ahead and counter things like this?

LEMPERT: Well, Bill, you have got to understand how much you actually use, and the peanut butter is a great example. Another one is olive oil. I have seen people walk in, get that four-pound jar of peanut better. That is going to take even a family of five or six a year to go through. I don't care how much peanut butter you actually like, at some point either the product is going to spoil or you're have to go throw it out, and when you throw out products, guess what? You're not saving any money. So number one is, you want to understand how quickly you will use a product. Five gallons of olive oil, again, might take you two or three years to use, and guess what is going to happen? It's going to go rancid before that.

In fact, just last week, we announced a survey that was done in conjunction with the food marketing institute and supermarketguru.com. We talked to over 1,300 people, and what's interesting is people are saying that now, only about 39 percent of them actually fill up at a supermarket on a weekly basis, that old idea of a full shopping cart. What they are doing now is they are going to other alternative formats, whether it be a warehouse club, or a gourmet store. But you've got to have the rules when you go into a supermarket. You have got have that shopping list, you've got to compare prices. And unfortunately, a lot of the warehouse clubs do not talk in terms of unit price. So that little tag that we have seen on the bottom of the shelf that we're used to seeing, isn't there. So you have got to bring a calculator, you have got to bring a Palm Pilot, you have got to bring a notebook, if you really want to make sure that you are saving money.

HEMMER: That takes time and a lot of effort, too, if you are going to walk up and down the aisle with a calculator, or a Palm Pilot?

LEMPERT: Exactly. And, you know, the technology isn't there yet, Bill. I think that in a couple years from now, we can have a Palm Pilot going up and down the aisles, click on Jif peanut butter, and it will show the price comparison between four different store, but we are not there yet, and it takes a lot of work.

The bottom line is, if you are going to go to a warehouse club, you have got to pay even more attention than in a supermarket, and for the most part, as these numbers point and as you have said, any number of times, just because it's bigger doesn't mean that it's less expensive.

HEMMER: Listen, we are out of time here. Just want to pass along a few more tips. You say compare the previous week's grocery receipt, coupon clippings still a favorite of yours in the Sunday newspaper, and don't buy the sales job at the end of the aisle, because apparently it's not always as good as it looks -- thank you, Phil.

LEMPERT: Thank you, Bill.

HEMMER: Phil Lempert, the supermarket guru, live in L.A. with us this morning.

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