Shop Talk

2 for the price of 1: Works for sweaters, why not TVs?

It wasn’t too long ago that flat screen TVs were a novelty, costing thousands of dollars and hung only on the walls of high-income consumers.

How quickly thing change, especially in the world of electronics. 

This year, as TV makers confront excess supply and shoppers show a reluctance to splurge on big-ticket items, Costco is selling bundles of two flat screen TVs, pricing two for basically the price of one.

Right now on Costco.com, consumers can buy a 52-inch Sharp LCD TV bundled with a 32-inch Sharp LCD TV for $1,799.99.  Or shoppers can get two 42-inch LCD Sharp TVS for $1,499.99.

It appears the same Sharp 52-inch LCD TV is listed for $1,699.99 on bestbuy.com.

CFO Richard Galanti said on Thursday that while shoppers are shunning splurges, in November its unit sales of TVs soared 50 percent. But that translated into only a 3 percent increase in total dollar sales.

BJ’s: Prices are going up and competition may be “brutal”

Late last month, Costco warned its quarterly profit would miss Wall Street estimates as soaring costs and inflationary pressures ate into its margins.

While the cost of the goods it sells was going up, the No 1 U.S. warehouse club operator said it was delaying passing along price increases to shoppers in order to boost its sales and appeal to cash-strapped consumers.

“It is times like this, painful as it may be, that holding off on price-increasing certain key items, by even a few weeks, we believe helps and strengthens our business for the longer term,” Costco Chief Financial Officer Richard Galanti said at the time.

BJ’s Wholesale, the No 3 U.S. warehouse club operator, said on Wednesday that it is  keeping an eye on what its competitors are doing when it comes to marking up their prices.

“Inflation is a huge challenge for all retailers as we try to manage pricing in such a way that we recoup our costs while continuing to deliver value,” said BJ’s CEO Herb Zarkin on a call with analysts. “Our overall goal is to maintain our margin rate but it is quite a balancing act.”

But one thing is clear — BJ’s does not intend to undermine its profits by selling goods below cost.

“No rational retailer can accept these kind of increases and expect to make a profit. It’s just not going to work,” he said.