It is frustrating seeing a retailer take shoppers for fools. I think this is what WH Smith is doing at Melbourne Airport. They are promoting a multi buy of Allen’s Party Mix of 2 for $6.50.
Here’s the product.
Right now at Coles, the price is $2,50.
At Woolworths too.
At the IGA in Natalia, they have the product at the regular price of $3.00.
All of this begs the question, how is the WH Smith price special? Well, it’s not special. They want you to buy two, and pay more than if you planned ahead and bought at the supermarket. And, I guess, that’s what is happening here – their pricing is convenience premium.
Given that these products are readily available elsewhere, I wonder what the ACCC would make of the pricing approach that suggests a discount.
Firstly, WHSmith’s multi-buy price is more expensive than the specials of Woolworths and Coles.
Secondly, from your pictures, we can find out the bag’s RRP of Woolworths and Coles. WHSmith’s 2 for $6.50 is cheaper than RRP of Woolworths ($3.6×2=$7.20) and Coles ($3.3 x2=$6.6). Therefore, WHSmith’s 2 for $6.50 deal is a special / a discount compared with RRP.
Lastly, from a shop owner’s view, the wholesale everyday price is $2.5 (inc GST) per bag, and special wholesale is $2 (inc GST) during promotion, for independent shops. WHSmith might get a further 10% discount as a group, but they made nothing or $1 if they match the supermarket special.
Anyone selling stuff at an airport generally has to charge more to cover the higher rents that airports charge (compared to most landlords). That and they have a captive audience so they know can get away with charging more.
This article is unfair for several reasons. Firstly, the Coles price was their price on special. To compare a price on special to a different business without, is automatically unfair.
Second, WH Smith would have high rent & other costs at an airport, which a supermarket wouldn’t have.
Third, Coles bullies manufacturers to sell to them for cheaper than a small retailer can get it for (in some cases the rental price at a supermarket is lower than the wholesale price a small business can get for it – and yes some small businesses have been forced to buy retail from supermarkets).
And fourthly, expecting a small business to be able to price match with everybody, particularly given the other businesses aren’t even at that location, is unreasonable.
Firstly, Party mix bags are best sellers, we sell over 300 bags of 2 SKUs from Cadbury and Nestle. Price at $3 and multi-buy 2 for $5.
Secondly, newsagents should sell more lolly bags and block chocolates (160g to 180g) as our competitors do so.
Most newsagents only focus medium bars. For us, the sale of Lolly bags is equal to the sales of block chocolates, and equal to the sales of medium bars.
Lastly, gift box of chocolate are good sellers. Plan ahead before Xmas and Easter, If we are learning from IGA stores, and choose some SKUs as loss leader to match price.