Two years ago I wrote about the irrational pricing of butter at Safeway on Smith St and theorised that pricing is not simply about reflecting costs and profits but that it is also about misleading and manipulating consumers. I recently saw a new development in Safeway’s butter pricing that made me stop and think ‘how stupid do they think their customers are?’

A 250g pat of butter currently costs $1.29 (up from $0.99 in 2007). A 500g pat normally costs $2.49 (down from $2.75 in 2007) except when it has a big ticket covering the usual price with the new price of $2.79. There are two dishonest and misleading things about this ticket.

butter1 double the dishonesty at Safeway

First, big tickets are usually used to draw shoppers’ attention to discounted items or items that are priced at the ‘everyday low price’. Using a ticket to encourage shoppers to buy an item that has had its price increased is disingenuous and misleading.

butter2 double the dishonesty at Safeway

Second, with unit pricing now mandatory, the price tag of the 250g pat of butter notes that it costs $0.52 per 100g. The hidden $2.49 price notes that it costs $0.50 per 100g. The big ticket however is lacking the unit price (which would be $0.56 per 100g). I think the absence of the unit price on the big ticket is deliberate, and is another strategy by Safeway to manipulate people into buying the more expensive product.

Safeway probably have an office where economists sit around analysing consumer behaviour trends, setting up hypotheses and devising experiments like this one to test the accuracy of their prediction models. What percentage sales increase can we achieve with a big ticket? Can we get away with inflating the price? Can any of our customers add up? I don’t expect Coles or IGA to be any better, but I am planning to spend more time and money there finding out at Safeway’s expense.

double the dishonesty at Safeway

4 thoughts on “double the dishonesty at Safeway

  • 13 March 2009 at 4:31 pm
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    This is a good point and something I have also noticed. After an experience a couple of days ago where a Safeway check out attendant accused me of stealing a water bottle I bought 2 months earlier and had been refilling every day since, I have decided to not shop there anymore. Little nasty tricks like this one, preying on the supposed stupidity of their customers, are the icing on the cake. Have you noticed the new Coles store designs, where it has a wide open entrance/exit, meaning you can exit freely if you choose not to purchase something, rather than scuttle out besides the queues feeling vaguely guilty? A step in the right direction.

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    • 13 March 2009 at 4:36 pm
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      I have noticed the new entrance at Coles in Richmond is very wide and open – I thought it was a waste of space and wondered why they did it… so it’s deliberate? The new Coles on Johnston St is different because it’s smaller and not a full size supermarket. I’m thinking of doing a story on the new self checkouts at Safeway. I tried the auto checkouts at Melbourne Central when they first got them and hated it – more annoying and difficult than queuing and I like to pay cash. I think they will abandon the self checkouts at Safeway after a while – I’ve already seen people avoiding it!

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  • 23 March 2009 at 2:16 pm
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    Anna, i’m surprised a checkout attendant gave it a moment’s thought – most of the times i see/hear the electronic tag alarms @ checkouts go off but one one seems to even care, least of all an employee!

    i noticed this “per 100g” store labeling at Safeway Smith St just yesterday, buying Rexona. i’m sure the public rationale is “well now you can compare apples with apples” (is there any new industry regulation requiring this now?), and perhaps you can, but i bet a large slice of their motive for doing so it that it puts another number in front of the customer, that in all cases of any item greater than 100g is going to be a lower number than the item’s price, in the hope a busy shopper’s eyes will fall on that instead of the real price.

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  • 23 March 2009 at 2:59 pm
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    Yes, it’s now compulsory to provide unit pricing ($ per 100g). It will be interesting to see if there is any evidence of it changing consumer behaviour…

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