Comments on: Unit pricing games

By: brisbanedavey

brisbanedavey — Wed, 15 Jul 2009 00:09:08 +0000

There’s two different things going on here: the unit pricing is in response to pressure from the ACCC, and can be considered as part of the horse trading currently going on. You know, unit pricing in, grocery choice out.

The ‘buy 3 get one free’ type offers are there for one reason only – to get you to spend more money. If you’d normally buy two of an item that costs $5 for exmaple, you get tempted by this offer, spending $15 instead of your usual $10 and taking home 4 items over 3. “Bargain!”, you think.

From the shops perspective you’ve just spent $15 instead of your usual $10, a rather nice 50% increase. The fact that you took home 4 items is irrelevant, as the shop makes the same amount of money per item, and rips the ‘discount’ from the supplier when it comes time to settle in 90 days’(!) time.

By: Moz

Moz — Tue, 14 Jul 2009 23:37:29 +0000

I expect that a warehouse where the unit is a case would be fine – they don’t allow sub-case purchases at all. It’s equivalent to the supermarket not allowing me to buy one biscuit out of a packet.

But I think that rule is silly anyway. The whole point of bulk purchases is that you get the price break and the supermarket trades future single sales for big sales now. Especially with stuff that is seasonally popular or unweildly – why do you think xmas wrapping paper goes on special a month before xmas? But they also do the same thing with stuff like fizzy water, there’s generally a bulk special a week or two before each holiday so people thinking ahead can buy early… the benefit to the supermarket is spreading the sales load.

By: Peter

Peter — Tue, 14 Jul 2009 22:29:39 +0000

Australia doesn’t seem to have quite as strong consumer-advocacy the US does so I don’t know if there’s much hope of it ever happening, but it would be nice to have such a thing legislated in Aus too.

Why would this be necessarily a *good* thing? Why shouldn’t a shop be allowed to charge what they like? Most people expect to get a price break if they buy several of the same items, so why not tinned food as well? How would this work with the warehouse type markets where you have to buy a whole case? How is buying *one* of something on special saving you money, when the next time you buy it, you have to pay the higher price?

Seems like some people here just can’t stop themselves – insisting they know better how things should be run.

By: Heather

Heather — Tue, 14 Jul 2009 18:26:50 +0000

Mercurius: this is the case all over the US, not just NYC (thank god!). There’s still some cleverness on the part of the supermarket, in that they’ll usually have a price tag stating “2/$5.00, regular price $2.99″, so that only someone savvy enough to know the law would be aware that they could still buy a single item for $2.50. The end result is that most people (based on my very casual and not at all scientific observations) still buy two items and the supermarket gets to shift some stock, while those who know the law get to save a bit of money.

Australia doesn’t seem to have quite as strong consumer-advocacy the US does so I don’t know if there’s much hope of it ever happening, but it would be nice to have such a thing legislated in Aus too.
PS: Wanted to say great post!

By: Heather

Heather — Tue, 14 Jul 2009 17:14:24 +0000

By: Brent

Brent — Tue, 14 Jul 2009 09:07:02 +0000

They were pretty prominent in Adelaide last weekend at Coles when I went, so I am guessing it is an Australia wide thing at the moment.

By: Stephen Moore

Stephen Moore — Tue, 14 Jul 2009 06:36:52 +0000

Are these 3-for-2 specials Australia wide or just in Victoria (or even just Greater Melbourne)? I’ve noticed the abundance of them, too, in the local Coles. I thought it may have been a response to the recent ACA story about CostCo opening in Melbourne soon.

By: Grumphy

Grumphy — Tue, 14 Jul 2009 04:33:59 +0000

@6 yeah, I agree that its happening more, but I wonder if it isn’t also a response to people tightening their belts? I’ve noticed ACA et al have shifted their programming a little more towards ‘how to save/budget’ articles and a little less towards pursuing dodgy builders lately, too, and of course we have politicians urging us to spend for the sake of the world. Whether people are actually tightening their belts or not, there’s at least a perception floating around that spending needs encouragement.

____
WRT the petrol discounts, watch what happens to the prices of other groceries as petrol discounts eat into profits…

By: Mercurius

Mercurius — Tue, 14 Jul 2009 04:29:26 +0000

Further to Greg’s comment about supermarket pricing in the USA, I noticed over in New York last year that supermarkets seem to be *disallowed* from doing ‘multiple buy’ discounts in the sense that, if they’re offering a “two for $5.00″ deal, they *must* let you pay only $2.50 if you only want to buy one.

For some reason in NYC the stores can’t force you to buy more than one of what you need, and they still have to charge you the promotional ‘multiple buy’ discount price for the lousy single item you are buying.

I was happy. Good deal for the consumer. We were a household of two in a tiny Manhattan apartment, so having to buy 6 packs of toilet paper to save 50c per unit was never on the cards for us…

I never looked into the history of it, but I suspect it was the result of some creative litigation by a consuemr group at some time in the murky past…

By: j_p_z

j_p_z — Tue, 14 Jul 2009 04:09:03 +0000

I think they should do price discounts that appeal to magical thinking — buy 4 instead of 3, and it means you won’t be late for work again this week. Buy 5 instead of 3, and that cute girl at the skating rink really *does* like you.