Monday, August 24, 2009

What this economist sees in line at the grocery store

This week is Picture Week on This Young Economist. Every post tells a story, and every story begins with a picture.

Here's a picture of the line as it was when I arrived with my cart full of frozen Tombstones and black beans. As you glance at this picture, what do you see?

Sure, you see the milk in the shopping cart, but your eyes are drawn to the butts, aren't they? If so, I don't blame you. After all, there is the saying, "Unless you're the lead dog, the view never changes." I expect that's what a normal person would see in this photograph, but it isn't what convinced me to take the picture.

When I took this picture, I saw an interesting economic question, bundled in four observations:
  1. There's a collection of magazines, candy, and soft drinks waiting at the checkout counter. These products are especially prone to impulse purchases.
  2. Someone installed miniature flat screen televisions, which are continuously playing Jewel-Osco advertisements.
  3. There is a lengthy line, even though there are several registers that are not open.
  4. The woman on the right is reading the headlines on the magazines, and I suspect the man on the left is contemplating buying a Snickers.
Taken together, these facts suggest to me that Jewel-Osco does not mind having a line at the registers. That way, their advertising for impulse buys is more effective. Moreover, the checkout is designed for a line. If you arrive at the counter without having to wait, you're much less likely to seriously consider buying the Snickers.

Don't get me wrong. Jewel pays a price for consistently having too long of a line. That's why they sometimes open additional registers, but it would be foolish for Jewel to open enough registers to serve each customer immediately: some wait time for each customer is optimal from Jewel's perspective.

Now, there's something to chew on the next time you buy a Snickers from the checkout stand.

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