Explaining the 'Costco effect'

The "Costco effect" is a term used to describe how the warehouse chain has perfected the art of the impulse purchase. The strategic layout of the store and product placement encourage shoppers to explore and make impulse purchases after initially getting reeled in by low prices on high-quality goods. Read first-hand accounts from shoppers explaining the spell-like effect in this story.

Dollar stores often place staple items at the back of the store so customers encounter other less-necessary items on their way there, leading to impulse buys.

Batteries, baby wipes, and other Costco buys that might not be worth it

Costco's private label Kirkland sells just about everything at a price many customers say can't be beat. While often a cost-efficient way to buy household goods in bulk, some shoppers not all Kirkland products are created equal and there are some items that aren't worth the cost savings.

What Costco does with its unsold baked items

Ever wonder what Costco does with its seemingly endless supply of muffins and other baked goods? Rather than mark down the items or toss them in the trash, the big-box retailer donates the perishable food to Feeding America, a network of food banks and other programs that help feed those in need.

Dollar stores procure their merchandise in bulk to help cut costs

In order to keep prices cheap, dollar stores source this merchandise from a variety of places, including liquidation sales (an event that happens when retailers need to sell off inventory quickly), directly from distributors, foreign markets, and more.

Costco's bullion program offers an attractive option for retail investors, experts say

Although Costco's gold bars often sell out, experts caution that the Costco gold rush was more "mob mentality" than sound investment. The bullion program is one way for retail investors to get exposure to the commodities market.

Costco and Amazon have very similar pricing across everyday staples

This article compares the average prices of everyday staples at Amazon and Costco, like toilet paper ($1.12 at Costco, $1.14 on Amazon), to help consumers decide which discount retailer to purchase from.

Expanding supermarket chains began offering coupons to attract customers in the 1940s

This was partially a customer acquisition strategy devised to lure customers into chains and away from their local independent grocers.

'Buy one, get one free' is often a clever way to get you to spend more money

One Burger King diner recently saw the price of her $2.16 sandwich rise to $3.19 per sandwich when she used a buy-one-get-one-free (or BOGO) coupon. Naturally, she became suspicious about how good a deal BOGO really is. This video explains why BOGO deals are a way for companies to get you to spend more money, rather than less.

'Buy one, get one free' is a clever way to get you to spend more money

One Burger King diner recently saw the price of her $2.16 sandwich rise to $3.19 per sandwich when she used a buy-one-get-one-free (or BOGO) coupon. Naturally, she became suspicious about how good a deal BOGO really is. This video explains why BOGO deals are a way for companies to get you to spend more money, rather than less.

Coca-Cola operates under an asset-light, divided structure

The "company" manages the brand itself, as well as its secret formula and syrup production. The capital-intensive "system" of independent bottlers, on the other hand, handles manufacturing and distribution.

How big brands keep your loyalty

We perceive ourselves as rational decision-makers—but research about our consumption habits suggest we are easily played by clever marketing. Here's how big brands design their branding to keep you coming back.

Soda is one of the most overpriced items at restaurants

All restaurant food is marked up—that's how they turn profits, after all—but soda is one of the most egregious. Fountain soda is remarkably cheap, with restaurants often paying a few cents for each glass before selling it for a few dollars. Food publication The Takeout estimates that the typical markup is around 1,000%.

11,000 new US dollar stores opened between 2007 and 2017

Dollar store retailers experienced significant fiscal gains during the 2010s, which were then accelerated by the COVID-19 pandemic. But in recent years, dollar stores have been closing in large numbers and suffering financial hardship. Experts point to Walmart's strategy of decreasing prices to cater to inflation-fatigued customers, and point out that when Walmart does well financially, dollar stores typically suffer.

Southwest Airlines was profitable for nearly 5 decades, offering free whisky, cheap late-night tickets, and free-for-all seating allocation—despite how hard it is to make money running an airline.

The phrase 'hot dog' likely evolved from the common name 'dachshund sausages,' a late-1800s slang term for sausages based on rumors that butchers were using substandard meat to make them.

Coca-Cola began developing Diet Coke to compete with a diet cola called Tab

Launched in 1963, Tab was successful in part because of its diet-conscious branding, with the name "tab" referring to the idea of "keeping a tab on your weight." Diet Coke made its debut in 1982.

Dollar stores are often found in rural, low-income areas of the US

Shoppers in these areas are increasingly turning to dollar stores for food. A study published in 2023 found that dollar stores were the fastest-growing food retailers by household expenditure share, with rural growth outpacing growth elsewhere (a 102.9% increase in rural areas versus 89.7% elsewhere).

Why there's a snack recession

Inflation and economic uncertainty have driven many Americans to make cuts to their snack budgets, according to reports from major food manufacturers like General Mills, JM Smucker, and Campbell's. Major retailers have also observed lower-income consumers cutting back on nonessentials due to the macroeconomic environment.

The products sold at dollar stores tend to be smaller in size

Recent reports suggest that dollar stores regularly practice 'shrinkflation,' the practice of making products smaller while keeping the price the same or even raising it.

The word 'coupon' comes from a French word meaning 'to cut.'

With Americans increasingly concerned about high grocery prices, experts suggest meal planning and using apps like TooGoodToGo to keep household food costs down.

Companies developing new weight loss drugs

In recent years, weight loss drugs made a tremendous amount of money for Novo Nordisk and Eli Lilly. Other companies are developing new drugs to break into the market. This piece is a concise overview of companies creating and testing new drugs, how far along they are, and what Novo Nordisk and Eli Lilly are doing to compete with these emerging rivals.

Regular coupon users pay less attention to the actual price of what they’re buying

The psychology of coupon users can feel counterintuitive: Research suggests regular coupon users actually prioritize coupon availability over actual price comparisons.

Why Coke tastes different at McDonald's

Fans of the sugary soda Coca-Cola have noticed significant differences between its canned variety versus what pours forth from the fountain at McDonald's. Is there anything to the claim? Weird History Food takes a dive into this essential fast-food...

The typical US household could lower its household costs by 6.4% by using coupons

The study looked at coupons for food, household items, entertainment, and clothing, as well as other expected expenses. The grocery store category offered the largest amount of savings at around $316 annually.

Beer companies turned Cinco de Mayo into a mass consumer event in the 1980s

Starting in the early 1980s, breweries including Anheuser-Busch, Miller, and Coors created Hispanic marketing departments and sponsored Cinco de Mayo events. By 2003, American beer companies spent over $5M annually on Cinco de Mayo advertising. Some users may experience a paywall.

Unlike its Mexican counterpart, American Coca-Cola contains high-fructose corn syrup rather than sugar

There are a few reasons why American Coke turned away from sugar in the 1980s, but none of them are related to consumer health. This Reader's Digest article breaks down the history behind Coke's recipe change, explaining why the company continues using high-fructose cough syrup.

Dollar stores can have negative impacts on local businesses

When a household name dollar store like Dollar General opens in a small town or local community, neighborhood businesses often lose out on key sales, driving revenue down and putting them at risk of closure. This has led some experts to argue that dollar store chains can cause economic stress, rather than relieve it.

Where to buy organic on a budget

In the past year, prices for organic fruits and vegetables rose 13.1%, significantly higher than the price increase of non-organic foods. While buying organic can be costly, certain stores can help organic shoppers save. This list highlights produce stores you may have been overlooking, like Trader Joe's and Walmart. Peruse the list and keep you grocery costs down.

In the 1960s, eateries started using discounted drinks (and sometimes food) as a marketing tactic to make money during off-peak hours

Today, we know happy hours as a time where bars and restaurants offer discounted alcoholic beverages (and sometimes even food or non-alcoholic drinks) in order to attract customers during off-peak hours. But originally, the term “happy hour” didn’t involve alcohol at all.

Trader Joe's isn't a public company, so it doesn't have to disclose its suppliers

However, when a product is recalled, the US FDA reveals the manufacturer. Business Insider dug into Trader Joe's recalled product history to figure out who is making its food. As it turns out, it's a multitude of suppliers, including big companies that make food for other grocers, such as PepsiCo's Naked Juice and Conagra.

One of LVMH's key business innovations was widening the luxury market's target audience

While certain items under the LVMH umbrella can cost thousands of dollars, like large Louis Vuitton bags, others, like coin purses or lipstick, cost significantly less. Some argue that these comparatively lower-priced items allows LVMH's target audience to be much larger in size than it would have been if it only targeted the world's wealthiest shoppers, whereas others argue that it makes the brand more vulnerable to economic downturns.

See an original Coca-Cola coupon—one of the earliest surviving coupons used in America—that helped popularize the soda brand in its early days.

The economics of all-you-can-eat buffets

Is it possible to out-eat the price you pay for a buffet? How do these places make money? We looked at the dollars and cents behind the meat and potatoes.

The 'dupe' economy is fueled by the youthful thrill of thrift

Historically, you don't want people to know you have a knock-off luxury item. But today's younger generations are embracing the "dupe" economy, an open celebration of luxury knock-off items where consumers are proud to pay less for something roughly equivalent to premium brand offerings.

Despite many influencers having loyal followings, creator-led brands often fail when the hype from first-time buyers dies down and doesn't translate into repeat purchases.

The economics of Chick-fil-A

Chick-fil-A has dominated national customer satisfaction surveys while growing conservatively for decades. This video goes into the economics the company deploys to be successful.