Surprising Retailer Beating Amazon Prices

by Christopher Freeburn | August 28, 2013 11:43 am

Surprising Retailer Beating Amazon Prices

bed bath beyond flickr 630 300x224 Surprising Retailer Beating Amazon Prices[1]Few consumers would cite Bed Bath & Beyond (BBBY[2]) as a discount store. But it turns out that prices at home products chain beat those of a leading Internet retail powerhouse[3].

According to a report from BB&T analyst Anthony Chukumba, Bed Bath & Beyond’s price for a basket of 30 selected items was 6.5% less than a comparable basket purchased from Amazon (AMZN[4]). And that was before he applied the 20% discount coupons that Bed Bath & Beyond routinely mails out to potential shoppers, Yahoo Finance notes.

The analyst noted that Bed Bath & Beyond does not appear to be deliberately cutting its prices to beat Amazon. The difference in prices between the two retailers has actually been closing for some time.¬†Chukumba adds that Bed Bath & Beyond has “built a real customer service culture.”

Online retailers like Amazon have been able to underprice traditional brick and mortar outlets because of their lower operating costs — i.e., Amazon doesn’t have to build and maintain stores.¬†In fact, Amazon became the bane of many retailers like Best Buy (BBY[5]), who discovered that consumers would go to its stores to examine merchandise only to buy it at a better price online[6].

Bed Bath & Beyond appears to have managed to lower its costs and control margins enough to best Amazon without the need for gimmicks.

Shares of Bed Bath & Beyond rose almost 1% in Wednesday morning trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/07/bed_bath_beyond_flickr_630.jpg
  2. BBBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBBY
  3. beat those of a leading Internet retail powerhouse: http://finance.yahoo.com/blogs/breakout/bed-bath-beyond-beat-amazon-prices-153102415.html
  4. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  5. BBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBY
  6. only to buy it at a better price online: http://investorplace.com/2012/09/why-some-retailers-are-thriving-in-the-showrooming-era-dks-fl-cab/

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