fitzroyalty

All supermarkets are evil, but some are more evil than others. For everyday items I often go to Safeway on Smith St in Fitzroy or in the Lygon St shopping centre in Carlton. Both supermarkets price their home brand butter the same.

250g costs $0.99. Easy.

500g costs $2.75. What?

Who of my readers is old enough to have learned real maths at school? Can anyone tell me what is wrong with these prices?

For those of you who find this too difficult, I’ll explain. Common manufacturing and retail practices makes small items of a particular product more expensive per unit (in this case grams). This reflects the slightly greater cost in manufacturing many small items.

With butter, the paper wrapper for 250g would only be slightly smaller than the wrapper for 500g, and the machines that shape the butter have to make more items, meaning it would cost slightly more per gram to make 250g of butter than it would to make 500g.

This manufacturing cost is usually reflected in the price. A rational pricing structure would price the 250g at $1.50 and the 500g at $2.75. If you bought 2 250g packs, it would cost $3.00, thus making it more efficient for the consumer to buy the 500g at $2.75.

But at Safeway the opposite applies. They have built a pricing structure that encourages consumers to buy what in theory should be the less profitable product – the 250g. 2 of these costs $1.98.

Because it seems so implausible to think that a profit machine like Safeway could make such an obvious mistake, I instead think this is deliberate. I suspect that some evil marketing people at Safeway have devised this as a secret experiment aimed at determining how many of their customers have poor numeracy skills, and hence how many people can be easily fooled into paying more for goods than they need to.

At Safeway, the cost of poor numeracy and stupidity starts at $0.77.

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This entry was posted on Sunday, August 12th, 2007 at 12:02 am and is filed under Carlton, Fitzroy, Smith St, business, customer service, food, intelligence. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.