They fall into the C-Store category, aka convenience stores. They always have higher prices, sometimes significantly so, than a grocery or other related type shop. eg an auto supply, souvenir shop, etc that has the same or similar products.
Why? It has been shown first of all people will pay a premium for convenience and many purchases in C-stores are impulse buys. Ka-ching.
For Pepsi-Cola and Coke brands as the size goes up the cost per litre drops. In any normal supermarket a 2 litre Pepsi Max or Pepsi is $3.20 in Coles or Woolworths, 3.19 in ALDI, and I think $2.99 in The Reject Shop. A 1.25 litre bottle of similar Pepsi-Cola products, unless on sale, costs around $3.00 in the stores that sell this size (price has risen recently from around $2.80). A 600 ml bottle at the front end is $3.95 (but it is chilled). Coca Cola Amatil 1.25 litre products normally are $3.55, the 2 litre products are $3.65, and the 600 ml at the front are $4.05 (again they are chilled). A consumer pays for the 600 ml convenience and that it is chilled
Go to a store such as a sandwich bar, a service station, fast food stores, or a myriad or other smaller stores and the price can be as high as $5.00 for a 600 ml bottle of any variety.
If a person doesn’t mind a non chilled beverage they can buy the 2 litre bottle (unless the 1.25 litres are on special) and have a drink from that. If a Maccas or Hungry Jacks is nearby, often you can just ask for a cup with ice (for free) and then just add your drink. If buying for 2 from KFC or Red Rooster, don’t buy the 600 ml, instead buy the 1.25 litre bottle which now most stock. If you have a Seniors Card use that at KFC or Red Rooster and the price will be reduced by around 15% on most items. Just as a FYI a Seniors Card will get you a free small drink with any burger/meal purchase at Maccas or Hungry Jacks e.g. nuggets and chips would count at Hungry Jacks or Maccas.
Thanks. Actually the Chilled comment is interesting as I have never seen a 600ml bottle that wasn’t chilled. As I mentioned $5.80 in a gas station for a 600ml bottle, brutal stuff! The 1.25L bottles at the gas station are chilled and very cheap.
It is Pepsi-Max that is my favourite, I went away from Coke years ago after all their polar bear “persuasive” advertising. I can only take so much of the obvious sympathetic heart wrenching propaganda.
I have a seniors card but not much use for most things as I still work … I should try it though!
The product is priced according to what the market will bear. I’ve posted similar to the following previously. 7-eleven at a major Japanese railway station, Kanazawa, pre Covid. Admittedly just 500ml or around $1.57 Aussie at present.
I’ve seen $8 for the 600ml soft drinks at some Aussie food court counters. The price will be in small print on a label inside the display fridge behind the serving staff. One needs to always ask if it is not evident. More than once I’ve encountered staff who seemed to have difficulty with the question, while there was no problem hearing the rest of the order.
Vending machines offer another level of excess markup for convenience and being cold. 600ml is just too much no matter how caffeine or sugar deprived one might feel.
Thanks, how does it explain a supermarket and convenience stores selling 600ml bottles at $3.95+ and 1.25L bottles at less than half that price? (1.25L bottles are simply double the size of a 600ml bottle)
I do know the difference between the 2 kinds of outlet, thanks for your advice, but that doesn’t explain why we allow these outlets to gouge us the way they do, does it?
This is just one example where Australians get constantly gouged and there appears to be no competition in prices, except who can set the highest price.
Thanks Mark, I travel a lot and was in Japan in August. The prices of all their soft drinks seem quite reasonable and none of the price gouging we see in Australia.
The survey of coca-cola (thanks for that) shows a 500ml bottle in Australia as US$2.21, at A$1.00=US$0.6500, that’s A$3.40 for the drink - which would equate to A$4.08 for a 600ml bottle.
We’re one of the most expensive countries in the world for food and drink.
I know a lot of people don’t care about prices or competition and their response is, well don’t buy it, but that doesn’t improve competition or fair pricing, as I said “Not impressed!”
Price differences between the supermarkets and smaller convenience stores isn’t price gouging. The article, while not Australian, explains why there is a pricing differential:
It is to do with its use. 600mL is about a single event consumption from the bottle most likely away from home…larger bottles are about taking home (or somewhere else) to dispense into a cup with multiple event consumption.
The drink manufacturers know this is the case an the pricing differential between bottle sizes is about convenience and being able to drink from the bottle.
If one is worried about the price differential and doesn’t care about how one drinks, buy the bottle with the lowest unit price.
We can report to the ACCC if we notice unfair practices in prices.
Difficult to miss that the unit price of a smaller size item is so much more than the largest one. Not sure why that happens, I guess there’s a difference in production/operating costs?
Regarding price variance among supermarkets, convenience stores, discount stores etc I would think it comes down mostly to the difference in business expenses? A store operating 24 hours would have higher costs? Would it be fair for a convenience store which has ongoing costs of staff/energy/security/ etc on the premises 24/7 to not consider those in the operating expenses?
But we are fortunate that we can shop where it suit us best, after all, as the ACCC says, market prices are dependent on supply and demand.
It possibly is the manufacturer knowing a consumer will pay a premium for convenience or a single serve sizing. Pricing can be set what a consumer is willing to pay.
It is a very important and fundamental option any time you cannot find value for money. Choice has a function in helping us find out when that is.
It does explain the difference, whether it is gouging is another question. The differences are:
At the convenience store you buy a single bottle, it is cold and it is right at hand when you walk in. You are paying for a bottle of drink and the convenience. If you do not value convenience then go somewhere that you don’t have to pay for that level of convenience, like a supermarket.
Are you advocating price control? If not how are prices to be set if not through market forces?
It’s simple marketing. Charge what the consumer will pay. One has to differentiate between necessary and discretionary spending. You could argue that bottled water is a necessary item (especially at closed venues like music events) but it’s hard to extend that argument to carbonated drinks. They are discretionary.
Price gouging is when a necessary item is overpriced. Some people may need the product (as opposed to want the product) so overcharging is predatory. When a product is discretionary, it’s up to the buyer if they want to pay the asking price or not. And if there are people who choose to pay the price, that’s not gouging. Consumers effectively shape the retail product offering by their buying choices.
Don’t like the price but like the drink? Get a cool bag, put in some cool packs and a couple of cold tins and take it with you. Or is that not convenient?
Coles Express and 7/11 service stations are classed as convenience stores . Problem is with Coles Express , Shell Service stations ,they are open approximately the same hours as Coles Supermarkets . I use Shell 98 octane in my car and when going to my local service station , that being a Coles Express Store , I pass 2 Coles Supermarkets where prices can be up to 80% cheaper than the Express Shop .
I would class Coles Express Servos as an "inconvenience " store , wallet wise in any case . Open same hours yet a tremendous difference in price . Oh yeah I do get 4 cents off a litre sometimes . Big deal to that .
While companies such as the EG Group (Ampol) and Viva Energy (Shell) might not have the purchasing power of Colesworths they are consequential customers for suppliers. Individual stores do not buy by each store, they are a collective customer unless the store is an unaffiliated independent.
I expect what you meant to focus on is that inventory capacity at servos and C-stores probably varies widely and might require a higher frequency of delivery than a grocery so contributes to higher pricing.
As a reference C-store prices in Japan are very high compared to their groceries that are high partly because of extremely limited inventory space, sometimes requiring multiple smallish deliveries per day all contributing to an inefficient and expensive distribution system.
