Thursday, February 26, 2015

LED Light Bulb Pricing Variance at Home Depot

For those unfamiliar with Home Depot, it is an American home improvement warehouse store that operates in North America.  Home Depot has had limited success expanding beyond North America.  The stores are very large warehouses.  Some people might refer to them as hardware stores, but that really isn't an appropriate name.  They carry far more than a traditional small hardware store.  They have a lumber area, a garden center, appliances, interior home stuff, lighting, tools, and so on.  As a new home owner, Home Depot is now a store that I frequent more than any other store.

Recently I decided to change out the various light bulbs in use in our house with LED light bulbs.  I researched different options and went to stores to see what they looked like.  I decided on Cree brand bulbs (currently exclusive to Home Depot).  I purchased 60-watt and 40-watt equivalent bulbs and a bunch of 65-watt equivalent flood light bulbs.

I found that Cree is a company that primarily manufactures the parts used by other bulb makers.  They decided to get in to the bulb and light making business to increase adoption of the technology and to lower the cost for consumers.  There is even a special page for the bulbs:  http://creebulb.com/

On the day I purchased my bulbs, I found that Home Depot sold the bulbs in packs of 4 as well as individually.  I had calculated my costs based on the individual pricing, but in the multi packs the bulbs were a bit cheaper.  I paid $4.25 per bulb before sales tax.  The individual price was $4.97 per bulb before sales tax.  That was for the Cree Model  #BA19-08027OMF-12DE26-2U100 (Internet #204592770, Store SKU #1000003071).  The description for the product is 60W Equivalent Soft White (2700K) A19 Dimmable LED Light Bulb.

Pleased with the outcome, I started recommending these bulbs to friends who were looking at LED bulbs.  In New Hampshire, a friend went to Home Depot to purchase the bulb and found it was $9.97 each.  But as a New Hampshire resident, the power company gives you a $3 per bulb instant rebate at the register, so now it's only $6.97 per bulb.  I was informed of the difference and thought that maybe I bought them on sale or something.

I checked online and they were still listed as $4.97 each individually.  If I changed my store to a New Hampshire store, the price on the bulb changed to $9.97 each.  What?  I began looking in other states and found prices were all over the place.  Here are the locations and stores I checked and the price advertised for the bulb mentioned above:

LocationStore NumberPrice of Bulb
Alabama85779.97
Alaska130210.97
Arizona4869.97
Arkansas14029.97
California6349.97
Colorado15056.97
Connecticut62104.97
Delaware16089.97
Florida2569.97
Georgia1449.97
Guam171011.47
Hawaii (Oahu)17015.97
Hawaii (Maui)17035.47
Hawaii (Kauai)170510.47
Hawaii (Big Island)84535.47
Idaho18066.97
Illinois19789.97
Indiana20126.97
Iowa21044.97
Kansas22029.97
Kentucky23159.97
Louisiana3679.97
Maine24149.97
Maryland25096.97
Massachusetts26674.97
Michigan27219.97
Minnesota28436.97
Mississippi29069.67
Missouri30216.97
Montana31019.97
Nebraska32029.97
Nevada33036.97
New Hampshire34819.97
New Jersey9107.97
New Mexico35039.97
New York12639.97
New York City (Manhattan)617710.67
North Carolina36449.97
North Dakota37019.97
Ohio68579.97
Oklahoma39069.97
Oregon40136.97
Pennsylvania41014.97
Puerto Rico640210.97
Rhode Island42854.97
South Carolina11109.97
South Dakota43019.97
Tennessee89169.97
Texas5778.98
Utah44035.97
US Virgin Islands862210.67
Vermont45014.98
Virginia46329.97
Washington47025.97
Washington, DC25833.98
West Virginia48026.97
Wisconsin49099.97
Wyoming60029.97

This list is only a sample of stores, but I tried to hit one in every state (sometimes more). The lowest price I found was a store in Washington, DC selling the bulb for $3.98. While the most expensive prices were found in New York City, Alaska, Kauai, the US Virgin Islands, and Puerto Rico. Actually, Guam wins here by offering the bulb at $11.47.  You're probably better off buying your bulbs at the world's largest K-Mart if you are in Guam.  A number of states offer the bulb at the price I paid, including 3 more states in New England. The standard price for the item appears to be $9.97 and special pricing adjusts from that. $6.97 and $5.97 appear to be common discounted rates. The majority of the states in the southeastern United States (where Home Depot is from) carry no discounts on these bulbs. Hawaii is a special case given its non-contiguous nature. Oahu has the bulb for $5.97, Maui and the Big Island have the bulb for $5.47, and Kauai carries the bulb at a whopping $10.47.

Home Depot clarified the pricing differences for me. In this case, the differences are related to power company and state incentives. Right now it is a common trend to reduce energy usage. LED bulbs are a cheap way to do that and some states and power companies are making deals with Home Depot to offer the bulbs at lower prices in those states. In Hawaii's case, the power companies are unique per island which explains the pricing differences there. Certain cases like New York City indicate a market difference being more likely.  And some states, such as New Hampshire, have discounts for state residents.  Those apply at the time of purchase meaning the store cannot advertise a lower price.

If you are looking at buying bulbs at Home Depot, I encourage you to look at stores near you in other states if that's possible.  Border cities expose you to multiple markets.  Kansas residents can save money buying bulbs in Missouri, for instance.  Virginia and Maryland residents should buy bulbs in DC.  New England residents should buy bulbs in one of the $4.97 states.

This is just one product at one store.  Market differences always affect pricing, but I find this difference odd because it's really driven by government incentives and/or power company incentives.  We had federal regulation mandating the phase out of incandescent bulbs, yet we have state regulations and state power companies that affect the pricing of replacement bulbs.

I guess my point is, avoid paying the $9.97 price if you can.