Surge Pricing
- Thread starter LOAM
- Start date
And if you can sell some of them for more money, you've made even more money.
Why wouldn't you do that?
Why not just put 5p oñ everything, still sell out or reduce all your stock at end of the day like most places have to anyway.
Or if you have such a good product that it sells out, set the price higher in the first place or have stock that matches daily demand.
Why do you need prices to change throughout the day?
If I was a shop, I'd rather be marginally overstocked (which I think most supermarkets are).
Because then you'll just be more expensive than everyone generally.
If you just 'surge' at lunchtime when your market is captive, in a rush, don't have time to go the extra 5 miles down the road to your competition etc. then you make more money without being more expensive all the time.
I wouldn't do that because it turns off customers as it's rather insulting.
Many have already said they wouldn't shop at a place that did this.
of course, dynamic pricing doesn't negate the need for good stock control, but the focus in my response and with the simple example by the other poster was this dynamic pricing and its utility
We'll see how that goes when all the major shops are doing it and 'won't shop at a place that does this' essentially means you won't be shopping anywhere bigger than your local co-op
They're not in business to be nice, they're in business to take your money. If they think they can successfully take more of it overall by surge charging for certain things at certain times, they will do.
If their competition think they'll make more money by playing on not doing it, they'll do that.
It is the idea that you can sell something for more than you did that is potentially important there re: efficiency. It is just going to turn into an optimisation problem, obviously if you can increase the supply then that is a factor too - however in your simple scenario you've got a finite amount and they're going quickly ergo it is probably optimal for the price to increase.
Where do we draw the line? Fast food Restaurants charge more during lunch and dinner times?
Petrol goes up at weekends.
Train prices go up in rush hour?
The line will be drawn wherever they can't make extra money by inflating prices alongside demand
Now it's 1am and I want a sandwich
With surge pricing in effect, 1am would likely be the optimal time for sandwich purchasing
With surge pricing in effect, 1am would likely be the optimal time for sandwich purchasing
I think it would actually be the highest. Low volume of customers means either you sell for a high price now and make enough money to pay employees (who are probably being paid extra), or simply be closed right now.
Big supermarkets are generally subsidising sales right now from sales during the day. Very few even bother to stay open after midnight.
It is also why Tesco Express, Sainsburys Local etc. are generally more expensive than the main stores. They lack economies of scale and are open longer on average.
Tesco Express, Sainsburys Local etc are generally more expensive because of their geographic location, i.e. they are closer than the nearest larger supermarket, ergo they increase their prices so you pay for the convenience. Nothing to do with them being open longer or shorter
total over reaction by most in here imo.
if you look at the data it increases profit by just 3% but reduces waste by 30% that tells me that unlike the name it is not increasing the prices, but is more able to respond to low demand and can quickly implement bogof offers or similar to shift stock rather than throwing it in the waste bin after spending money to purchase it in the first place. As well as fewer errors and reduce staffing needs further.
https://www.theguardian.com/technol...omes-to-the-supermarket-dynamic-personal-data
if you look at the data it increases profit by just 3% but reduces waste by 30% that tells me that unlike the name it is not increasing the prices, but is more able to respond to low demand and can quickly implement bogof offers or similar to shift stock rather than throwing it in the waste bin after spending money to purchase it in the first place. As well as fewer errors and reduce staffing needs further.
https://www.theguardian.com/technol...omes-to-the-supermarket-dynamic-personal-data
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Stores won't surge price change lunch, already a lot of them lose money on their lunch deals to increase footfall at what is usually a quieter time (not school rush/weekend/evening topup) to encourage customers to pick up food for an evening meal or essentials instead of waiting until the end of the day.
Electronic price tags would make shopping so much easier, so many times I've picked up an item and the label hasn't been corrected since last week's price change or it reads the wrong price at the checkout. At least with linked price tags the checkout and the labels should show the same. If they are planning surge prices I'd expect the checkout to allow 30-60mins from the price change to allow the customer to buy the item at the lower price.
Electronic price tags would make shopping so much easier, so many times I've picked up an item and the label hasn't been corrected since last week's price change or it reads the wrong price at the checkout. At least with linked price tags the checkout and the labels should show the same. If they are planning surge prices I'd expect the checkout to allow 30-60mins from the price change to allow the customer to buy the item at the lower price.
Actually that's true, shouldn't your product be at it's cheapest when there is plentiful supply and maximum customers?
Muon is right. Shouldn't off peak sarnies cost more because they sell less and need to cover overheads more?
Muon is right. Shouldn't off peak sarnies cost more because they sell less and need to cover overheads more?
If it's 30% less waste doesn't that directly translate to more profit? Unless they flat out ordered 30% less stock. Which is still more profit?
I hate economics.
I am all up for minimising food waste though, so if it's this effective then maybe it is a good thing. Apply it to all areas of supermarket shopping?
I hate economics.
I am all up for minimising food waste though, so if it's this effective then maybe it is a good thing. Apply it to all areas of supermarket shopping?
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