Price discrimination by packaging
I recently discussed the notion of price discrimination, where the same product is sold to different people at difference prices, with the aim of extracting the maximum profit for the seller.
Another form of price discrimination can be found in many supermarkets. It’s price discrimination by variation of packaging.
For example, at Sainsburys at the moment, Granny Smith apples are £1.05 per kilogram loose. Or, you can buy them in a pack of seven for £1.05.
I weighed some of the packs, and they were around 800 or 900 grams. It’s clear that you get a better deal buying the loose apples and having them weighed at the checkout – plus you can pick and choose the better quality apples. The shopper in a hurry, picking up the prepacked bag in haste, doesn’t realise (and may not care) that they are paying more.
The same thing applies to other fresh foods, such as broccoli. It is consistently cheaper bought loose from the boxes, than pre-wrapped.
Strictly speaking, these differently-packed products are not absolutely identical. They may come from different batches, different distribution centres, or even different countries. But from the consumer’s point of view there’s unlikely to be any practical difference.
So remember – if price is important, the loose produce is probably the better bet. If convenience is important, go for the pre-pack, but realise that you may be paying a premium for it.
(photo by Linda Huber)