Facebook has decided that I should love Dave Ramsey. I can’t stand him. His personality grates on me, he claims to be an expert in economics but doesn’t understand it at all, and the worst part is when he sticks to his lane he is really good. Dave Ramsey does one thing really well, help people get out of debt. The issue comes in when he tries to do anything else.
The video I woke up to this morning was about paying a living wage and how if the person who stocks bread is paid more then the price of bread has to go up. Something in my brain was immediately triggered, because just like Dave Ramsey has never bought a $13,000 car I don’t think he’s ever been to a grocery store. The business he is thinking of is a bakery and not any bakery because most bakeries sell cakes and muffins and scones and other items as well as bread. Davey Ramsey is thinking of some breadery where they only stock bread all day, bread and bread alone.
That isn’t how grocery stores work and it isn’t how stock people work either. Bread is only one item that a grocery store sells, and it is even diversified further when we look at the types of breads the store sells. A good grocery store isn’t going to raise prices willy-nilly. They are going to look at what impacts their customer and raise prices in a controlled manner.
Let’s pretend though that they do have to raise the price of breed to offset the rise in labor cost. They can raise the price of their most popular bread that everyone buys and an increase will be felt by most customers or they can raise the price of specialty breads that aren’t bought as often but are bought for different psychological reasons than the daily bread. Which do you think a smart grocery store would increase?
If you think about it this is exactly how Wegman’s operates. I’ve long told people if you go to Wegman’s and resist temptation and just buy your daily grocery items you will pay less than anywhere else. It is when you start buying the specialty cheeses and luxury items that Wegman’s gets you in trouble.
All of this is probably why there is that sign on the wall in every Wegman’s behind the cash register that reads, Voted One of America’s Top Employers. They can pay their employees more because they respect their customers more and know where they can increase their margins.
David Huzzard Writes 