Wednesday, March 21, 2007

Stupidnomics

Finest frozen Euroshopper oven chips in my local supermarket


A one kilo bag of which cost 0.75 EUR, or as the little figure helps the terminally stupid work out: 0.75 EUR per kg.


A 2,5 kg bag of which cost 1.95 EUR, or as the other figure more usefully shows 0.78 EUR per kg.

What's going on there then? My economics training might not have got beyond GSCE level (pretty basic to the non-English/Welsh out there), but it appears that Finnish supermarkets still haven't quite got the idea of bulk buy discounts (this isn't the only product where I've noticed they try to charge you more if you want to buy larger amounts of it). Besides being crap in the range they offer and prices they charge, they actually want to charge you more if you have the temerity to buy more from them?!

10 comments:

Anonymous said...

I have been wondering the same thing since the day I arrived in Finland many many years ago. It must make sense in some weird Finnish way I guess.

Toby - Northern Light Blog said...

Thank you very much Mr. Anonymous. Last night whilst writing this my significant-other told me I was simply sad if I really thought anyone would be interested. I was made to feel rather pathetic. I now take great strength in knowing I'm am not alone in noticing these matters! You've made my day. :-)

Bob Hughes said...

Toby, you may not be alone in noticing it but your indignation may be misplaced. If politics is the art of the possible, pricing is the (less pithy) art of what you can get away with.

ed said...

i think it's a case of, 'if you want more, you must really really like them, therefore you will be prepared to pay more for them'. dead logical those Finns. I'm surprised there aren't five kilo bags for five euros.

Toby - Northern Light Blog said...

Ed - I can see you never did GSCE economics! :-) I needed lots of chips (various small children to keep sweet) so just bought two 1 kg bags.

I was wondering if the government was trying to force oven chip makers into reflecting the social costs of getting fat from eating junk into the pricing, but again this doesn't make sense as you just buy more small packets. This actually increases the social costs due to resources involved in the packaging and its production.

jussi said...

The Norwegians are more down to earth as in Tromsö a pack of fish fingers was 9,95 but if you were really onto the nasty things you could go for the megasaver: 10 packs for 99,50! On the topic of fish fingers, I always found it strange that the same pack of crap is cheaper here as opposed to the supermarket next to the fishfinger factory in Norway.

On the other hand Kesko Food alone made a profit of 173,2 million euros last year. I'm happy to see the mud slinging campaign against Lidl and other cheap brands is working. Long live finnish quality.

ed said...

Perhaps it's to do with scarcity. Or simply the idea of scarcity. Maybe Finns have a hangover bunker mentality from the cold war and still think that stuff needs stockpiled, just in case of nuclear winter (or even winter). The higher price on the 2kg bag of chips sends out the signal that 'hey, these chips are actually in short supply - you better stock up and get some' (regardless of 1kg or 2kg - it's simply a signal to say the chips are going to run out, so buy them now). Brits raised on abundant choice from supermarkets laugh, but to those who have lived with rationing or short supply, or even the thought of short supply, it's sets alarm bellls ringing - 'the price is going up: buy now'. In other words, it is a cynical marketing ploy to sell more 1kg bags more quickly, based on a certain trait in the - naturally depressive - national psyche. Once the 1kg bags run out, well 'Hey! We told you they were in short supply, lucky you bought them when you did'.
Incidentally, how many other brands of chips in the supermarket? And how many supermarkets? What other choice is there? It's like a tricky creative question in my Higher economics exam.. you know, the one we Scots - people like Adam Smith, Gordon Brown - sit. (What's a GCSE by the way?:)

Anonymous said...

Just noticed this item. Oddly I saw a similar example of premium-priced-bulk stuff in a supermarket here (in this case, 4-can-pack of baked beans /4 > single-can of baked beans). I reckon it is pure opportunism by the retailers; they've spotted that people assume bargains even when the contrary evidence is in front of them.

Toby

Olly said...

I am surprised there are any 1kg bags left in your supermarket. Once this material information reaches international capital markets, hedge fund managers will surely rush in to take advantage of this arbitrage (risk free return) opportunity. Transaction costs would appear to be minimal and so by 'going long' the small bag or 'selling short' the big bag, we could soon be witnessing a reduction in pension deficits across the globe, underpinned by chips. Perhaps the 1kg chips could even be securitised via Junk Bonds?? (sorry)

ed said...

@olly. a reduction in pensioners maybe... after they've eaten all those junk bond chips.

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