Grocery costs: Why are stores owned by the same companies charging different prices?
Grocery costs: Why are stores owned by the same companies charging different prices?
The names on the outside are different, but most grocery stores are owned by the same companies — yet CTV News shopped around and found they charge significantly different prices for the same items.
Why are stores owned by the same companies charging different prices?
“Prices are often important signals of how **competition **is working.”
Um, what competition if we're talking about stores owned by the same company? Competing against itself?
A profit driven company will always sell a product for as much as they can. Costs doesn't factor into price at all.
Not true. They will price their inventory in a way that maximizes profit for all of it. Sometimes that means individual products being sold for cheaper.
Or not being sold directly to customers, but to discount retailers.
You can find the same product for different prices in the same fucking Zehrs. There is a section of the store clearly intended for immigrants, and the items are cheaper there. Save a few bucks on a tub of cashews.
I needed a few cinnamon sticks. Went to Save On Foods.
Spice aisle: small spice jar with maybe 8 sticks in it. $6.99.
Ethnic food aisle: 4lb bag with like 100 sticks: $4.00.
It's exhausting.
A lot of that is for to the distributor.
What people don't realize is that grocery stores don't really order/stock everything themselves. A lot of product is brought in by vendors who bought shelf space. The big guys, like Nabisco, coke, Pepsi, Frito lay, Bimbo, etc., all order and stock their own stuff.
They might be getting standard spices from over distributor and the Mexican spices from another, etc.
Never heard of that where I am, sounds pretty cool.
Do they have any restrictions preventing "well-off" looking individuals from shopping for the cheaper items, or possibly are these cheaper items a different brand with the same thing lower priced?
Because of third-degree price discrimination (not discrimination with the negative connotation).
This is literally economics 101 for how to maximize profit when you have a monopoly. You find a way to sell the same thing for different prices depending on the customer's ability to pay
There are some arguments and scenarios which support price discrimination, OP's article is a prime example. Price discrimination encourages firms to sell more output (at all levels), which enables more customers to purchase goods at each of their willingnesses-to-pay. The natural consequence is, yes, the producer captures more profit. This seems ideal if we are to accept the theory of a capitalist economy.
Monopolies do exert a great deal of control over price and therefore price discrimination to the detriment of the market, but reasonably competitive firms also have some influence over price in ways that are supplemental to the market.
As with all pricing: because they can.
Couldn't this just be used as an avoidance tactic? Like saying, "see we are trying to keep the prices low, by offering competitive prices in different stores". All the while raising the base price of the item in all stores to trick people into thinking they are getting a good deal.
I mean I work in retail. Prices are different based on region. If a local competitor has a better price, then they'll try to match it out beat it. That's basically it.
Do you want to go to multiple stores or just pay for convenience? That's how they over charge. Best buy sells 40 dollar HDMI cables.
Shopping around can save a lot of money on groceries. It wasn't so bad when all the stores price matched, since this could simply involve opening an app to show you all the flyers and highlighting the ones you want to price match at a single store.
Now, hardly any do price matching, so that's one more way they've found to screw us over.