So are you like me where your mind is always looking at pricing and doing the math? My apologies if you are—drives my wife crazy whenever we’re shopping as I keep looking for pricing anomalies and feel compelled to point them out. Even though I know she doesn’t care.
Here’s a fun one I saw recently as I was shopping for shredded cheese at my local King Soopers. I like Kraft sharp cheddar cheese. I use it in when I cook up my favorite breakfast—eggs with onion, cheese and salami; and my 17-year daughter just eats it right out of the bag. I’m walking down the aisle with the cheese and there it is—16 oz bags for $5.89 and 8 oz bags for $2.99. Quick math shows two bags of the 8 oz would be $5.98. So I save a dime for buying the bigger volume bag, and I feel good that my carbon footprint is lower since the packaging is less. All is right with the world.
But wait. These items are on special. $4.99 for the 16 oz bag and $2.29 for the 8 oz bag. That’s $4.58 for two 8 oz bags—a savings of 41 cents! I’ll say it’s a savings of 8.2% which sounds a whole lot better (I did that calculation with Excel when I got home, not in my head at the store).
Why is that? I doubt it’s an intentional strategy—probably just somebody in a decision-making capacity who isn’t as numerate as they should be. Or are they practicing a form of revenue management? Maybe they have a surplus of 8 oz bags and need to sell them before their expiration date?
Why do you think they did this? I really don’t know. I’ve submitted the question online on the www.kingsoopers.com website. I’ll let you know if they respond.
Donald is CEO of Real Estate Business Analytics (REBA) and principal for D2 Demand Solutions, and industry consulting firm focused on business intelligence, pricing and revenue management, sales performance improvement and other topline processes