How Walmart’s turkeys are gobbling up your wallet - the power of loss-leaders

Ever wondered why turkeys get cheaper right when everyone wants them most? It’s not because retailers are suddenly brimming with holiday cheer. Nope, it’s all part of a clever strategy to get you into their stores. This Thanksgiving, giants like Walmart, Target, and Aldi are practically giving turkeys away at prices as low as 79 cents per pound. It sounds like a win for you, but here’s the twist: they’re not making money on those turkeys at all. In fact, they’re likely losing money. So, what gives?

This is called the “loss leader” strategy. Retailers lure you in with dirt-cheap turkeys, knowing full well that once you’re there, you won’t stop at the bird. Stuffing, gravy, wine, a pack of holiday candles—your cart fills up with all the other profitable goodies you didn’t even know you needed. For stores, turkeys are the ultimate bait.

And it works. Research shows most of us don’t just grab the discounted item and leave. Instead, we stock up on a range of items, helping retailers make up for the turkey losses and then some. Plus, this tactic builds loyalty. Shoppers leave thinking, “Wow, I really saved money here,” and keep coming back long after Thanksgiving is over. Meanwhile, the rest of the year, turkey prices quietly climb back up.

It’s a win-win game for retailers and shoppers—cheap turkey for you, more of your grocery dollars for them. And you’re not just buying dinner; you’re buying into their strategy. Clever, huh?

Your key takeaways

  • Loss leaders drive traffic: Offering a key product at a super low price—even below cost—can drive store traffic and create opportunities to sell higher-margin items. It’s a long-game strategy to hook customers.

  • Seasonal pricing can be a strategic weapon: During peak demand, surprising customers with lower prices (like Thanksgiving turkeys) can strengthen loyalty, outsmart competitors, and create goodwill.

  • Psychology of bargains: Consumers tend to remember standout deals on essential items, which can boost a brand’s reputation and encourage repeat visits. You’re not just selling products; you’re selling trust and value.

  • Create lifetime value, not just sales: A temporary loss on one item can pay off through increased long-term customer loyalty and higher spending in the future. Short-term losses often lead to long-term gains.

  • Stay competitive, but strategic: When one retailer starts slashing prices, others often have to follow suit to avoid losing customers. Monitor your competitors closely and adapt quickly to retain your market share.

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