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Price difference in products in store v online

I have been ordering groceries from Woolies online to have delivered since the start of the lock-downs. I have noticed a huge difference in price of a couple of items online as compared to the in-store price. One is Carmen’s Clusters cereal which is around $6-7 a box in store and $11.50 online!! The other is Haagen-Dazs ice cream which is also about $6-7 in store, sometimes as low as $5 on sale and $11.50 on line!!

What is the go with this? It is the exact same product which requires no special handling to deliver. Well, okay, the ice cream has to be frozen. But what can you do to a box of cereal that doubles the price?

Shouldn’t they be the same price in the store and online? I pay a fee for the delivery as well.

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This one’s usual price is $5 online (or $8 for clusters only)…

https://www.woolworths.com.au/shop/search/products?searchTerm=Carmen%20cluster

I know this is the same as instore price as they are expensive instore at these prices too.

It is $11.50 online but as never have bought it, don’t know it’s instore price. I (or maybe someone might best me to it) will check next time instore if I remember.

A few years ago Woollies announced that its online and instore prices would be the same…not sure if this has changed as there hasn’t been any announcements. I have noticed that Woollies has instore manager specials which may be a store by store pricing set by store management and that sometimes they specials for individuals holding reward cards which differ from online or instore prices.

I know Coles didn’t match Woollies online/instore pricing announcement at the time Woollies made their announcement and they indicated that their price discrepancy was due to higher cost of handling online orders (packing specific orders for each and every customer…which instore the customer does).

It would be interesting if anyone can confirm if Woollies has changed its pricing approach.

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We do not buy it either, but as a shopper have noticed while the shelf price is usually $11.50 it is routinely on sale (Woolies Rewards emails or their catalogue) for $8-9 every few weeks. Same happens with all the other ice cream (and frozen dessert that resemble ice cream) products. They were historically often half price on the sale, and more recently only about 30% off on sale, product and timing dependent.

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Its the shipping fee that I find outrageous. If you are a single person, you only need minimal stuff and $15 a week is too much (thats what it costs, and I have found myself looking for a bit more to buy, so that the fee can drop to $12… but that is a slippery slope). I don’t shop in store at woolworths, so I have no idea if the prices are more online, but they seem to be in line with what Coles charges in store. Havent done an online shop with Coles yet. Was considering it for next week.

The one thing I did notice… DF pure cream skyrocketed as soon as the Coronavirus restrictions were on… went from $3.75/600ml to $4.50/600ml. And now that the restrictions are off, the higher price remains.

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We also noticed the DF Pure Cream price rise, and many others that similarly crept up and stayed up. In cases it was only noticed because the 50% off sale prices were higher than ever :wink:

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But the products in the warehouse have to be sorted and allocated to each and every outlet; then shipped to each and every outlet; then the products have to be taken into, stacked and displayed in each and every outlet; then each product purchased being processed. That seems a lot of handling in comparison to products being sorted per customer in a warehouse and being shipped directly to customers. Amazon seem to do online shopping and deliveries without too much difficulty and a surcharge on products.

In any case a surcharge used on some online grocery shopping is minimal when compared to the cost of physically shopping.

There are quite a few products continuously unavailable on Woolworths’ online grocery. But these products are available in the offline shops. Maybe Woolworths do not want photos of empty shelves and so preference is being given to stocking the shops. I am told it is the same with Coles. If so then this shows that Woolworths and Coles still dont get online shopping and their systems and approaches need more work.

One has to remember that products in a warehouse to store are handled in bulk and not individual product items. Say they cost for handling a unit of bulk product is the same as that for a single item, the cost is spread over each item in the bulk amount diluting the per item cost (noting bulk handling cost would be generally less that that for an individual item).

There’s reasonably enough recent research from UK, Europe and US showing the handling charges between pure online fulfilment (with last mile delivery) and bricks and mortar stores distribution and fulfilment to be within a close range. But of course there’s plenty of variations depending on amount of automation, locality, labour costs, etc that impact on either online or offline. Grocery chains offering both channels do not necessarily get any amortisation benefits but some do using the store as the last mile collection point for online orders.

What we didn’t include in both of our observations are the other costs such as rental, landlord costs, safety and health needs, security services, administrative oversight, POS requirements and more. These costs probably give a smaller margin to offline grocery chains. Real estate is a large cost to bricks and mortar stores and that is largely driven by the property market. Guess rentals will be coming down now but will foot traffic to grocery shops come back to previous levels?