Watching Competitors, Playing Fairly
Competition often brings out the best in people, and leads to good outcomes for consumers and the marketplace. That is, if all competitors are playing by the same set of rules. When the rulebook is abandoned, it often leads to bad decisions, poor behavior, and warping the playing field.
The retail landscape is no different. In order to keep things fair and protect the health of your small business, retailers should always be mindful of what is unfolding around them. And this includes glancing at nearby competitors to gauge how they are pricing their product. This not only makes you re-evaluate if you’re reasonably competing for patrons, but also if they are potentially engaging in unfair practices.
New Jersey has strict laws on below cost selling (BCS), deceptive signage, passing off one grade of fuel for another, selling unbranded as branded, and similar violations; but the authorities are unlikely to know a potential issue exists unless they are notified.
What are we talking about? We’re not talking about needlessly calling regulators and state officials to harass someone down the street for competing fairly against you. Not only does that take resources and attention away from investigating actual violators, but such a dynamic might have unforeseen consequences that could ultimately come back to negatively harm your own establishment.
No, we’re talking about spotting (and reporting) owners who have actually engaged in BCS or other deceptions.
When the market notably changes, some nefarious types will try to harm the competition to gain an advantage. We were reminded of this possibility when a member called to report a concern.
A few weeks ago, we saw gasoline prices dip below $3 a gallon in some parts of the state, and Labor Day fuel prices hitting a five-year-low.
Shortly after, prices rose by over 10 cents a gallon, frustrating many motorists who believed prices would fall after the traditionally high-volume summer driving season ended.
We aren’t using this week’s message to analyze why prices rose; though lower capacity certainly has played a role (that is, refineries slow production to recalibrate as they switch from lower-volatility-summer blend to winter blend). Some extended scheduled maintenance shut-downs didn’t help either. That means prices are likely to stabilize (and possibly fall) as cheaper-to-produce winter blend production ramps up.
So why mention the market at all? Because, as our member noticed a few weeks ago, notable changes often entices some bad actors to engage in deception and unfair practices. Sometimes that enticement may manifest itself as BCS. Other times it may be attempting to sell one grade of gasoline for another. And yet other times, a competitor might use deceitful signage to get a customer to patronize their location.
You should always respect an adversary, but it is just as important to “police our own” to ensure the rest of the market remains vibrant and consumers are best served.
Have you noticed anything along these lines in your area? If so, we want to hear about it. Take pictures and notes, then contact us so we can get the accompanying details to the right state officials.
When another business is breaking the law, they are cheating YOU and taking advantage of all honest business operators. Reach out to us at 732-256-9646 or Nick@njgca.org, and we can anonymously pass the information along to our contacts in enforcement.
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