Advocacy Articles

Paying the Price

Theory: Lease operators' prices are higher than independent stores'.

Test Conducted: Connect2One regional consultants and member stores surveyed prices of basic school supplies at 12 lease stores and 38 independent stores between 8/23/99 and 9/24/99

Findings: While lease operators hold significant aggregated buying volume, that buying power is not passed on to students and the campus community. The Connect2One price survey supports the argument that lease operators do not use their volume buying power to deliver lower prices. Independent stores deliver a better price value to their campus.

Spiral notebooks and binder categories represent the two highest volume categories for most supply departments in college bookstores (national estimate: 45% of total school supply sales). The lease operators consistently showed elevated price points on spiral notebooks, averaging 21%-26% higher than independent stores. Lease operators offered 80-count spirals starting at $1.59. Yet, of the independent stores, 6 stores actually offered 80-count spirals at $.89 or less! Non-imprinted binders likewise were priced 26% higher at lease stores.

With filler paper it is interesting to note that while 200-count filler was the most frequently reported item, two lease stores only stocked 150-count filler and that at a higher price point ($1.99) than the independents' 200-count filler. The item-based method of price comparison used in this survey cannot provide a complete analysis of an overall product mix used by lease operators to achieve higher price points on lower value product.

One surprising finding indicated that independent stores showed a significant margin of price competitiveness on calculators and computer diskettes more in line with mass merchandisers and office superstores.

For a copy of the Price Survey results or to participate in future surveys, contact Paula Haerr at 800-563-9034 or e-mail at phaerr@connect2one.com.