If Companies Can, They Will

A follow up thought from last week’s post, which I began with a truism: If companies can hike prices, they will.

We can extend and broaden this truism if we want to:

If companies can do anything, they will.

This includes irritating things like discontinuing or changing a product that you like, ending maintenance or support services for a product you’ve already bought, buying out a competitor’s product and discontinuing it, forcing product upgrades[1], and so on. They can do all these things… in addition to pulling typical garden-variety stunts like putting in stealth price hikes.

Average consumers[2] tend to have a common response to these things: they get angry, they complain, they shake their fists, and they whine about how greedy corporations put profits before people, etc. And then they call on a parent figure (usually “the government”) to “do something” about it.[3]

These reactions are understandable, but effete. Truly empowered consumers do not bother to ineffectually shake their fists at some company. Instead, they go Bill Belichick on that company! They get cold, rational, solution-minded and creative. And they beat that company at its own game by finding alternatives and substitutes for the products that these companies sell. Our goal here is to understand the greater chess game being played around us so we can navigate it as effectively as possible.

It’s a pointless, unprofitable and effete exercise to impotently shake your fist at whatever latest greedy thing whatever greedy company did. Stop buying.


Footnotes:
[1] Technology companies are the worst offenders here. A typical example would be Microsoft rolling out increasingly complex operating systems that slowed down computer performance, which drove consumers to upgrade to new computers, after which Microsoft would roll out a still more bloated operating system, driving yet another upgrade cycle, etc. In the 1990s, cynical computer industry observers used to say that Microsoft sold “bloatware,” not software. Fortunately, today’s computer buyer has more options, and can now choose among various free operating systems (e.g., Chrome, Linux), and this has devastated Microsoft’s formerly dominant market position. They had it coming.

[2] But not Casual Kitchen readers of course.

[3] Even worse, they do any or all of these things on Twitter, a place where no one has ever listened, ever. The online equivalent of screaming in your car.

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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

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Noticing and Optionality as Defense Against Price Increases

A truism about prices and consumer products companies:

If a company can raise prices... it will.

Companies are always on the lookout for circumstances where they can raise prices. And they especially like circumstances where the consumer:

a) doesn't notice, or
b) doesn't have a choice.

Doesn't notice
When I say "the consumer doesn't notice" what do I mean? I'll explain with a hypothetical price-hiking tactic. Consider your basic Kraft brand salad dressing at $2.49 for a 16-ounce jar. Kraft decides to roll out a new, "upmarket" brand extension (for example, an "organic" or "natural" salad dressing) at a price point as much as 30-50% higher than the regular product. They market this product aggressively, paying for prominent shelf locations, signs, special displays, and so on, as Kraft attempts to position this salad dressing as a high end product.

Now, this creates a subtle "pricing umbrella"--for Kraft's regular brand, but for all other brands too. Even the store brand! Each of these brands now have room to raise their prices at least another 10-15%, to a point where they are still comfortably cheaper than the high-end brand.

Yet to a non-noticing, non-attentive consumer, all these products seeeeem less expensive, even though they're not. Voila! A price hike that consumers don't really even see. Because we notice relative differences much more easily than absolute differences, a new high-end or aspirational product can improve pricing dynamics for the entire product category. This is how pricing umbrellas work. And it goes without saying that consumers who "don't notice" don't even realize they're being fooled.

Doesn't have a choice
Let's move on to the second case: where consumers can't do anything about a price hike, even if they do notice. So, for the sake of argument, let's say (for some bizarre reason) you have undying brand loyalty to Kraft brand salad dressing. You simply refuse to buy anything else.

Well, you're pretty much screwed. And it's because of your "loyalty" to a brand that doesn't care about you, that doesn't even know you exist, and that sees you as a mere mark for future price hikes. You're stuck. You have to eat any increase in prices.

You can maybe hold off on buying until you see an attractive sale price (see last week's post for more on this), but you don't know when or to what extent the company actually will discount, if at all. At the end of the day, you're gonna eat a price hike. This is why brand loyalty is toxic to consumers.

Of course, I'm using salad dressing as an example in this post for reasons of rhetoric (and metaphor, as we'll soon see). After all, a flexible, empowered, open-minded reader who hears the words "Kraft salad dressing" and "price hike" in the same sentence will instantly begin reeling off solutions, substitutions and alternatives. To most readers here at Casual Kitchen the idea of buying salad dressing at all, much less a branded salad dressing (and much, much, much less an overpriced upmarket "aspirational" salad dressing) would be a ridiculous, even vaguely pathetic act. Especially in light of how easy it is to make inexpensive (and far more healthy) salad dressings at home.

Therefore, any reader here should easily be able to arrive at multiple solutions to subvert any price hike anywhere in this entire genre of products.

Okay. Salad dressing is easy. With other products it can be more difficult. Obviously. But the point is to try and think of any product, regardless of what it is, as if it were "salad dressing" in order to help your brain generate alternatives.

Really, it doesn't matter whether it's salad dressing, airline tickets, cars, houses or ...yachts. You want to make it so that all providers of all products have to compete--on multiple, multiple levels--in order to win your business.

And yeah, I know: one one level, salad dressing doesn't really matter. Nobody changes their standard of living by beating price hikes in the salad dressing aisle. But you will change your standard of living if you can employ these concepts in other life domains and with other, much bigger-ticket items.

If there are competing products in the same store, great. If not, make them them compete "temporally" by holding off on your buying until you see a truly attractive sale price. Invoke competition from other retailers, from online retailers, and so on.

Finally, when all else fails, make them compete with a truly out of the box solution. (Examples: make the product yourself at home, use the "don't want it" heuristic, find a truly original substitutive solution, etc.) Force these guys to compete for your business on multiple, multiple levels, and you will reclaim most of your power and resist any pricing games they play.

Remember: if you don't have options you are toast. You'll be beholden to some retailer or some company and all their sneaky, creepy pricing tactics.



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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

How Prices are Changing in Your Grocery Store, and Why This One Frugality Hack No Longer Works

Something has changed in the grocery store pricing environment. And it's not just prices rising (which they are, across the board in almost all food categories).

What we're also seeing is a fundamental change in the way things are priced relative to each other, and it's ruining one of the key grocery store hacks frugal shoppers have used for years.

What's the fundamental change? It used to be that store-brand products always sold at meaningful discounts to branded products. Not any more. And so, one of the easiest ways to save money food shopping--switching from the branded to the generic product--no longer works as well as it used to.

The backstory
Consumers were a lot better behaved twenty years ago. They didn't change brands often. So, to induce the typical consumer to even consider buying a store brand or generic product, the store had to offer a really juicy price. The price discount had to be huge.

Remember, this was back when companies actually made things, and when there (sometimes) used to be an actual difference between branded and unbranded products. Not so much any more. Furthermore, if you've read any of Casual Kitchen's posts on branding, you're well aware that, today, many consumer products brands don't actually make the products they're known for. They instead outsource it to other third party food manufacturers.

Not only that, but often those third party manufacturers make not only the branded item, but the store brand product too. Often in the very same factory. And those two products sit right next to each other on the store shelf, differentiated by absolutely nothing but price. [For a depressing and highly typical example, see CK's article on commodity canned tuna.]

Consumers, especially the ones who didn't enjoy getting separated from their money for no reason, caught on to this game. They stopped playing checkers and started playing chess. When you figure out to your dismay that the only difference between a branded product and a store brand product is a label and a 30-50% higher price, you won't just consider the store brand, you'll buy it. From now on. What kind of fool would do otherwise?

Add in some inflation
There's one more step in this discussion. We're now in a more inflationary environment than we were just a few years ago. Prices are starting to rise across many grocery store categories. But here's what's unusual in today's pricing environment: while many branded products have hiked their prices, store brands have hiked their prices even more. Now, the pricing differential between branded and generic items is a lot smaller than it was. Instead of discounts of 30% or more, you might see discounts of as little as 5-10%.

I'll share an example. Over the past couple of years, Planters brand nuts has put in meaningful price hikes to the point where (in grocery stores in our area) their standard 1-lb jar of peanuts now costs up to $4.29. The store brand in my store responded to this "pricing umbella" by raising their standard price to $3.99, a mere 7% discount. Yes, both have raised prices, but the store brand raised its price more, and now the store band offers far less of a discount to the branded product than before.

Another example. Store brand analgesics (aspirin, ibuprofen, acetaminophen) now are priced at a smaller than ever discount to branded analgesics, with discounts of only 10-15%. Previously you could buy store brand painkillers for sometimes half the price of branded Tylenol or Advil. And because these products have to be identical in every way by law, this was the easiest, most entry-level frugality hack in all of consumer products.

As a matter of fact, with some products, the generic/branded pricing differential has gotten so tiny that you can sometimes find a branded product offered at a temporary "on-sale" price that's actually less than the store brand product! Grocery store reality seems totally upside down when this happens. More on this in two paragraphs.

You can only push consumers so far
Finally, you can only push prices so far before consumers push back. In many food categories, companies and grocery stores are discovering to their dismay that they hurt sales by ramming through big price hikes, as consumers adjust by finding substitutes or buying less. Then, to win those buyers back, consumer products companies rely on discounting, sales and couponing.

Here's a somewhat ludicrous example of this from the packaged cookie aisle: after years and years of price hikes and stealth price hikes (keeping the price the same but offering fewer cookies per box, one of the most annoying tactics out there), it feels ridiculous to pay $6.00 or more for a box of some 17 Oreo DoubleStuff cookies, a quantity of cookies I could easily inhale in one sitting. Apparently many consumers agree with me (maybe not about the inhaling part, but definitely about the price), and in my grocery store, these cookies are frequently offered at half off. Half!

So, let me offer readers a thought experiment. What really is the price of Oreos?

Obviously, for a non-savvy, non-flexible customer who must have her Oreos on the exact day she happens to shop… that day's price is the price, however high it happens to be.

For the rest of us, however, we easily defeat these pricing games by shopping opportunistically, and never paying full price for anything, ever. Ever! Unless something is offered at a highly desirable, on-sale price, we. don't. buy. Here's where a savvy consumer separates herself from the pack.

Or! An even savvier, self-reliant consumer can always use the Don't want it! technique and not buy Oreos at all. After all, a batch of homemade cookies--made with love from laughably cheap commodity pantry items--will taste far better and cost far less.

And because learning to make delicious food at home is an inherently good skill, and because working on this skill improves your independence, flexibility and self-sufficiency, doing so will bring you far more satisfaction than overpaying for some flimsy, pathetic plastic container of 17 lousy Oreos.

So what's the takeaway here? First, all of this goes to show, yet again, who has ultimate power in this business environment. We consumers do. We are the ones who willingly decide whether or not to pick the product up off the shelf, carry it over to the checkout counter, and fish money out of our pockets to pay. By definition, companies cannot sell us products at any price unless they offer sufficient value to us such that we decide to buy.

The minute we say no and don't buy... they start discounting. Then we buy.

The consumer products marketplace is changing, it's evolving, as companies seek ways to maintain their profitability in an increasingly uncertain retailing environment. Some of our favorite frugality techniques still work, but some aren't working quite as well as they used to. We have to stay flexible, independent and opportunistic.


READ NEXT: Why Bad Blogs Get More Readers (An Accidental, Secret Recipe for Massive Web Traffic)
AND: Nine Terrible Ways to Make Choices

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You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

On Not Explaining Yourself. Ever.

Today's post offers thoughts I've gathered over the past several years on why it's never worth it to explain yourself.

I'll start with a premise. When asking you for an explanation, the vast majority of people are not seeking to learn, they are seeking to argue.

While that statement isn't always true, it's true a lot more than I'd like it to be. So, with my typical window-licking slowness, I have finally learned to tread carefully when asked questions like:

Why do you live in a small home?
Why do you drive an old car?
Why do you (or don't you) eat X? (meat, grains, carbs, lentils!, etc.)
Why do you practice X? (Stoicism, frugality, anticonsumerism, etc.)
Why in the world would you do intermittent fasting?

...and so on, just smile, nod, and deflect the question. Don't explain yourself.

I'm not quite saying you should never, ever, ever explain yourself when asked. What I am saying is, before explaining, it's worth it to assess:

* Is the person merely affecting to be curious, while not being genuinely curious at all?

* Is the questioner engaging in Sealioning: asking for citations, studies, and evidence (e.g: "Where are the evidence-based scientific studies supporting intermittent fasting? Links?") when no amount citations or evidence will actually convince them?

* Is the person asking questions as a device to then tell you exactly why you're wrong?

* Is the person unable to comprehend your discussion of the domain because you practice it at an extremely advanced level? Imagine if a consumerist person who's never tried to save money came into contact with the concept of extreme savings (savings rates of 50%, 75% or higher). They'd view the idea as impossible, ludicrous even. Likewise, a person who "knows" they need to eat every 2-3 hours would consider a discussion of intermittent fasting to be insane, unworthy of comprehension. When a subject domain doesn't exist in someone's Overton Window [1] you ruin their chances of ever learning about it by explaining too much too soon. Their minds cannot (yet) make the leap.

Worst of all: in each these instances, any sincere effort to explain and answer questions merely increases your doubt in yourself about something you've already decided is important to you! Again: smile, nod... and deflect the question.

Remember the saying Never complain, never explain. And this goes double for all online discussions: If you're explaining online, you're losing. You're wasting pixels (and undoubtedly failing to convince a random person online who was never likely to be convinced in the first place) when instead you should just get back to doing the very things that make you successful.

You have no obligation or responsibility to explain your pursuits to others. None.


READ NEXT: Running Towards Humps
AND: Why Can't I Find People Who Share My Values on Anti-Consumerism and Frugality?


Warning: Do not read this footnote unless you are a geek:
[1] The Overton Window concept is helpful in understanding societal changes in all sorts of domains: historical, social, political, cultural, military, and more. In geopolitics or history, examples of "outside-the-Overton Window" situations might be things like the idea of being against the Vietnam War in, say, 1963, or wanting to go to war against the Nazis in 1936 during the peak of the appeasement era. These ideas, at those times, were too radical for people to handle.

A cultural example of an Overton Window might be something like having an openly gay character in a TV show or movie in the late 1950s, something which (again, at that time) was well beyond our culture's ability to accept. In other words, when something is outside of a people's Overton Window, it simply doesn't exist as an element of open public discourse.

Note also that Overton Windows don't care about ethics or morality, they just are where they are. In 1936, an appeasement strategy with Nazi Germany was entirely inside our cultural Overton Window, even though in retrospect this consensus opinion turned out to be horrifically, tragically wrong. And today, sadly, our collective Overton Window includes wide acceptance of lamentable practices like Twitter mobs doxxing and threatening high school students based on a snap interpretation of a partial video clip.

It's fascinating to think about how our culture changes over time, how we collectively grow to accept or reject certain cultural norms, and what drives these changing norms. What's even more useful and interesting, however, is to think about where our collective Overton Window is going to move next.




You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Not Listening

"Most of my adult life I have not been listening fully. I only listened long enough to determine whether the speaker's ideas matched my own. If they didn't, I would stop listening, and my mind would race ahead to compose an argument against what I believed the speaker's idea or position to be."
--John Francis, environmentalist, and author of Planetwalker: 22 Years of Walking. 17 Years of Silence

We all do this. All of us. And if you believe you don't, you're lying to yourself.[1]It's refreshing that Mr. Francis has both the perspicacity to notice and the ego strength to own up to this common, common habit. I'm guessing it has something to do with his predilection for silence.[2]

Today is the ultimate era of not listening. We're convinced we are right... and all those other mentally ill idiots are wrong. Convinced.

The closest we come to listening these days, it seems, is aping the behavior of a listener. Except that our brains are still actively composing a response argument.

In other words, not listening at all. But at least looking good while doing it.

Do we just have a permanent disease of not listening? Is it terminal? Is it a feature, not a bug, of the human condition? It really makes me wonder.

And it makes me wonder about my own words: What is the purpose of the words I write at Casual Kitchen and elsewhere, what good do they do? Are they valuable, or are they just a pixelated version of "not listening"? Would it be better just to shut up and just… listen?



[1] If you still believe you don't do this, perform this simple test: Take the single political position you believe in most strongly. Find someone who holds the opposite position, and ask him or her to articulate why they're right and your position is wrong. Observe yourself during this conversation. Yep... you do it.

[2] A gem from the Wikipedia page on John Francis: "On his birthday in 1973, Francis decided to stop speaking as a gift to his community, to not argue for one day and instead listen to what others had to say. He found this so valuable that he continued to be silent the next day. This continued and he ended up not speaking for 17 years, with the exception of a phone call to his mother after 10 years of silence."





You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

Status Signals All the Way Down

At every socioeconomic level there are choices set out for us.

At lower income or entry-level socioeconomic tiers there are choices like these:

Should I buy Tide detergent? Or should I buy All at a 40% lower price point?
Should I buy regular chicken or pay double for organic, free-range, cruelty-free chicken?

As you work your way up the socioeconomic ladder, the questions change shape a little bit:

Should I buy another Honda Civic, or am I ready to step up to a BMW? Or am I the kind of distinctive person who drives an Audi, or a Jaguar?

At still higher socioeconomic levels you can ask yourself things like:

Should I live in Summit, NJ or am really a Basking Ridge kind of person?
Should I send my child to private school? Should I consider Hotchkiss or Choate?
Should I consider the Rolex? Or am I ready for the Patek Philippe?

No matter how high you go, these aspirational questions never end.

Should buy a pied-à-terre in SoHo, or on the Upper East Side?
Should I winter in Miami? Or Turks and Caicos? Or Buenos Aires? After all I'm quite an international person.

It shouldn't surprise us to find aspirational tiers for megayachts, private jets and major professional sports teams. Remember: billionaires like Larry Ellison and Paul Allen are status-signalling primates too.

As you read though this post, it’s entirely possible that these choices quickly begin to sound ridiculous to a person who happens to be far removed, socioeconomically speaking, from the upper tiers.

Then again: do you think a wealthy person cares about the type of detergent they buy? These "games" appear ridiculous from both angles.

And yet people still believe they need to make whatever choices there are at their level. And, worse, as we move up the ladder (if we are fortunate enough to do so), we effortlessly start to make decisions that used to seem ridiculous, but somehow don't any more because our brains adjust so easily to new levels of wealth, comfort and status.

Now, if you play the money game right and save and invest properly over the course of your life, rest assured: you will be facing decisions at tiers far above where you are now.

The question is, will you make these decisions from a place of self-awareness? Will you understand the greater game being played around you that structures these endless signals, these endless aspirational products? Or will you be a checkers player, obediently and enthusiastically choosing the Patek Philippe watch when it's your turn to do so?

Eventually, if you’re lucky, you’ll recognize that a system has set out the frame, the structure, of these choices across your whole life. This system "allows" you to make a series of choices from a series of pre-set menus.

Once you realize these are all pre-chewed choices that aren’t really choices at all, you escape the system. You start avoiding making these decisions at all, saving you time, mental effort... and an absolute shit-ton of money. Ironically, this simply accelerates your move up the socioeconomic ladder.

The only way to win this game is not to play.



You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!

The More We Consume, the Hungrier We Get

Readers, this week I thought I'd share an extended quote from Robert Sapolsky's book Behave: The Biology of Humans at Our Best and Worst. It touches on topics frequently discussed here at Casual Kitchen ranging from consumerism to hyperpalatable food, and it explains why we humans, sadly, can't help but always want more:

"Once, during a concert of cathedral organ music, as I sat getting gooseflesh amid that tsunami of sound, I was struck with a thought: for a medieval peasant, this must have been the loudest human-made sound they ever experienced, awe-inspiring in now-unimaginable ways. No wonder they signed up for the religion being proffered. And now we are constantly pummeled with sounds that dwarf quaint organs. Once, hunter-gatherers might chance upon honey from a beehive and thus briefly satisfy a hardwired food craving. And now we have hundreds of carefully designed commercial foods that supply a burst of sensation unmatched by some lowly natural food. Once, we had lives that, amid considerable privation, also offered numerous subtle, hard-won pleasures. And now we have drugs that cause spasms of pleasure and dopamine release a thousandfold higher than anything stimulated in our old drug-free world.

An emptiness comes from this combination of over-the-top nonnatural sources of reward and the inevitability of habituation; this is because unnaturally strong explosions of synthetic experience and sensation and pleasure evoke unnaturally strong degrees of habituation. This has two consequences. First, soon we barely notice the fleeting whispers of pleasure caused by leaves in autumn, or by the lingering glance of the right person, or by the promise of reward following a difficulty, worthy task. And the other consequence is that we eventually habituate to even those artificial deluges of intensity.

If we were designed by engineers, as we consumed more, we'd desire less. But our frequent human tragedy is that the more we consume, the hungrier we get. More and faster and stronger. What was unexpected pleasure yesterday is what we feel entitled to today, and what won't be enough tomorrow."






You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!

And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!