Kroger is adding additional discounts to people on welfare.

https://www.grocerydive.com/ne...alty-produce/808736/

As long as the grocery is not getting any government subsidy, it’s their prerogative to sell it at a lower price to a niche market segment. The goal is increase total profit for that market segment by lowering prices to increase volume. They are not being generous.

One example I remember are cigarettes. It costs the same to manufacture a low cost cigarette brand than a name brand. Buy they sell the low cost cigarettes to presumably low-income people. As a matter of fact, they engineer the cigarettes to make them taste “low cost” to validate the buyer’s expectations.

This should be okay rather than charging me based on what they know about me as discussed in another thread.

I'm okay with it. Seems like it's through 1/31/26, and once a day. I don't think that 20% discount will be used by many on welfare, as fruits/vegetables aren't generally what they buy.

It's how charity should be administered.

If the goal is higher profit by increasing volume at a lower margin, why not extend the discount to every customer?

The problem is the normal cash customers are really paying the cost of such programs.
Management ain't pay it out of their pockets.
I wouldn't mind so much but I firmly believe that many of the people on welfare shouldn't be on it. It is suppose to be a safety net not a way of life.

quote:

Originally posted by bigwagon:
If the goal is higher profit by increasing volume at a lower margin, why not extend the discount to every customer?

Great question. It is based on market segmentation. For a given market segment and a “normal” product, there is one price that maximizes profit. Charge higher and while your profit per unit increases, the total quantity goes down. Charge lower and while demand increases, profit per unit goes down because profit per unit decreased. ROI also decreases. If you charge one price for everyone, that price is going to be too high for some and you lose sales.

The magic is to be able to segment the customer base and in this case, it’s whether you use government subsidies. These are lower income people who would buy more at a lower price. You’re not losing overall profits because the additional demand is incremental sales that you won’t have otherwise. Meanwhile, you’re protecting your total profits because you’re keeping everybody else from “qualifying” for the lower price.

Another way of creating separate market segments for your products is made clear with Tesla’s models made transparent by their business model of turning off features already paid for when the car changes ownership. This shows every car in the same line has every capability and the segmentation is made by making the buyer determine how much is he willing to pay for for “additional” features to be activated but are already built in.

quote:

Originally posted by gjgalligan:
The problem is the normal cash customers are really paying the cost of such programs.
Management ain't pay it out of their pockets.
I wouldn't mind so much but I firmly believe that many of the people on welfare shouldn't be on it. It is suppose to be a safety net not a way of life.

The normal customers will still be paying the same price. See my post above, it’s about generating incremental sales and profit.