ECONOMIC FRAILTY - Paychecks versus Retailers

As the economy worsens, the reality of "paycheck frailty" becomes starker.

What does this really mean? Paycheck frailty is simply the weakness of our earning power. It reveals how financially tenuous many of us are. Retailers have defined this trend and are responding, especially snack and convenience food companies. The February 23 edition of the Wall St Journal reported how retailers adapting. This is how it works. With more Americans living from paycheck to paycheck, certain grocery product sales spike at the beginning of the month. As cash winds down, these same products dramatically decline in sales. This is "paycheck frailty". It is also known as the “paycheck cycle”, but in this sour economy, more Americans have been sucked into this cycle.

Retailers are now designing promotions for opposite ends of the month.  Knowing this, can it be taken advantage of? Maybe. Even though there is paycheck frailty, there is also retail frailty.  As retailers strain to grab as much of our money as they can, savvy shoppers can grab deals and stretch their food budget dollar.

For example, the Frugal Yankee is not a big snack eater, but this is one area where you'll see deals, especially at the end of the month. Retailers know the average shopper will buy around $6 snacks at the beginning of the month. At the end of the month they shun these and gravitate towards items priced around $2 a pop. Retailers are adapting their promotions and sales accordingly. The frugal shopper can take advantage of this retail frailty and buy those items which fit their shopping habits.

Other areas where retail frailty is having an impact is with non-essential or brand named items. New larger sizes at the same price will be soon seen on the shelves. Retailers, such as Banquet frozen dinners is eliminating less profitable lines to maintain lower price levels.

The observant, and frugal shopper, will notice how each particular store responds to this emerging retail frailty. Take advantage of this because they are trying to take advantage of our paycheck frailty.

You can find out more how supermarkets try every trick in the book to get money out of your pocket by heading over to FrugalYankee.com and check out our Savvy Consumer section.

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From traditional tips to savvy perspectives, the Frugal Yankee knows how to enjoy life and spend less. Find out more by going to FrugalYankee.com. Be sure to check out Hollywood Breakdown in Gather's Movie Essential for some smart takes on the film business.