Price range for basic products

[lpm]

One of the features of modern capitalism is the creation of enormous choice for everyday needs and wants. Companies try to find tiny niches within the overall range.

The outcome is wild variations in price for basic products. For example bread: 80p for a loaf. Or £4.50. I'm wondering what the biggest range is? A tea bag can cost 1p if bought in bulk from Costco. Or it can cost 33p from some ordinarily fancy tea company (even more from silly snob-value fancy tea company).

Is this a good or bad thing? Do adverts for the high priced niches make most people feel they are missing out on something, that their perfectly adequate tea is in some way inadequate? Do high earners not realise they are incredibly wealthy because there's always a product out there they perceive as unaffordable?

[El Pollo Diablo]

I would imagine that beauty products probably have a pretty wide range. The markup on them can be astronomical, and they're pretty much non-perishable.

[Gentleman Jim]

Branded v Generic health care products?

[El Pollo Diablo]

Medicines, yeah, that must be a scorcher.

[plodder]

On a more everyday level toothpaste and bog roll are biggies, not just between brands but also in the same shop over time, or even on the same shelf. I have a theory that most people don't really know the cost of a tube of toothpaste (99p) and therefore accidentally spend £3.50 on the same thing.

I am an interesting person.

[P.J. Denyer]

I saw a Youtube vid yesterday on a £450 gold iced Panettone if overly sweetened sultana bread counts as 'every day'. But to be fair, it did apparently come with a plate...

They also had a premium Japanese instant coffee at £35/jar.

[Allo V Psycho]

I went to the local B & M, because it was near, and picked up a trolley load of household stuff (a clothes dryer, lamp, extension cables, cleaning products etc. etc.) I supposed it would be about 50 quids worth, judging by my usual Tesco Extra standard.

When the checkout lady told me the total, I exclaimed out loud: "£16.75! That's ridiculous!".

"Yes", she said sympathetically. "Things are really expensive these days".

[lpm]

Branded v Generic health care products?

Paracetamol 3p, branded paracetamol 13p. Next to each other on the same shelf in Tesco. Though maybe the branded gives a slightly stronger placebo effect.

On a more everyday level toothpaste and bog roll are biggies, not just between brands but also in the same shop over time, or even on the same shelf. I have a theory that most people don't really know the cost of a tube of toothpaste (99p) and therefore accidentally spend £3.50 on the same thing.

The only price check I always do in the supermarket is this sort of thing.

Dishwasher tablets 8p, branded 20p, eco-friendly 30p. Next to each other on the same shelf in Tesco. Though maybe the branded gives a slightly stronger placebo effect, no wait, that can't be right.

[Fishnut]

I would imagine that beauty products probably have a pretty wide range. The markup on them can be astronomical, and they're pretty much non-perishable.

I'm speaking well outside my area of expertise here but I'm pretty sure that make-up can and does go off. The most critical is stuff used around the eye as it can cause infections. There are symbols on the packaging of all toiletries that show how long they last (that little triangle thing with a number in it).

[El Pollo Diablo]

I thought that was the recycling type

[P.J. Denyer]

I went to the local B & M, because it was near, and picked up a trolley load of household stuff (a clothes dryer, lamp, extension cables, cleaning products etc. etc.) I supposed it would be about 50 quids worth, judging by my usual Tesco Extra standard.

When the checkout lady told me the total, I exclaimed out loud: "£16.75! That's ridiculous!".

"Yes", she said sympathetically. "Things are really expensive these days".

I feel the same way whenever I do an Aldi shop. Unfortumately our local Aldi, Lidl and B&M are all clustered together, within yards of each other, a p.i.t.a. drive through the middle of the next large town away so we don't tend to use them very often.

[Fishnut]

I thought that was the recycling type

Oh yes, I got the symbol wrong. It's the little "pot" thing. This is the one on my toothpaste,

Toothpaste.jpg (11.94 KiB) Viewed 4608 times

[El Pollo Diablo]

ahhh, okay. anyway, soz. back to price ranges.

Mrs PD works in the furniture industry and has visited factories where she's aware of cost prices. Markup isn't as strong for furniture as it is for beauty products, as you might expect, but it's interesting to hear her stories of, say, garden furniture, which are vastly marked up in the UK (above the typical cost in other countries) for what they are.

[Fishnut]

ahhh, okay. anyway, soz. back to price ranges.

Mrs PD works in the furniture industry and has visited factories where she's aware of cost prices. Markup isn't as strong for furniture as it is for beauty products, as you might expect, but it's interesting to hear her stories of, say, garden furniture, which are vastly marked up in the UK (above the typical cost in other countries) for what they are.

I find clothing here in the UK to be much more expensive than that in Australia. But books in Aus are extortionate compared to the UK (I think they have tax on them which doesn't help).

[lpm]

There's always going to be some things that are out of line in a country, but I don't think this has much wider impact on a society. Maybe a country with cheap tomatoes and olive oil follows a better diet or something, but there's no real distortion when it's the same for nearly everyone.

What I curious about is whether modern capitalism is increasing unhappiness via this great diversity in prices for routine product.

For thousands of years there's been snob pricing - deliberately absurd prices to make things exclusive and ostentatious status symbols. Lark tongues and otter noses weren't actually for the masses at the children's matinee. But when did bread and tea get this huge range? People don't spend 30p on a teabag for ostentatious status display, but because they think they want the "better" product.

Sainsburys and Tesco started the "Taste the Difference" / Normal / "Tesco Value" variations in about 2000. My perception is that it's been an accelerating trajectory. Has it changed how we perceive inequality and our status as consumers?

[Fishnut]

This paper may go some way to answering your question. It's available on request from the authors.

ETA and this report.

[science_fox]

Given that some products* can only be that way because of a race to the bottom in supplier chain conditions, I'm sometimes quite happy to not buy the cheapest version possible. The trick (which isn't easy) is to tell which products genuinely have higher costs, vs those which just have high mark-up, vs those where you can tell the difference.

Tea being one example of very atrocious working conditions on some plantations as a consequence of the drive for the lowest costs. bog roll maybe not - although can the cheapest products really be sourced from sustainably derived
timber? Bread somewhere inbetween - there are different manufacturing processes used, and you may or may not be able to tell the difference in the loaf, but the traditional process is vastly longer than that used for supermarket bread, and hence you'd expect it to cost more.

Part of the 'green' problem in today's society is the expectation that goods are cheap, and hence people don't want to pay for the full costs of labour and environmental best practise. Companies of course want to charge as much as they can, but only pay the barest minimum.

I don't know how to escape this trap. Meticulous research https://www.ethicalconsumer.org/ethical ... r-magazine takes ages - part of the hidden costs I suppose.

[Bird on a Fire]

Given that some products* can only be that way because of a race to the bottom in supplier chain conditions, I'm sometimes quite happy to not buy the cheapest version possible. The trick (which isn't easy) is to tell which products genuinely have higher costs, vs those which just have high mark-up, vs those where you can tell the difference.

Yes, for most products these low prices come at the cost of appalling worker conditions and environmental destruction.

Despite earning a pittance I do try to impose voluntary price-hikes on myself, especially really destructive tropical products like coffee and chocolate. Rainforest Alliance are excellent all-round and Fair Trade are at least good on the people stuff. Organic is less clearcut, but possibly more beneficial and less wooish in the developing world. At a push even buying products imported from places like Cuba where at least I know the workers can see a doctor and send their kids to school.

[lpm]

But none of that applies to dishwasher powder. - they all come from the same factory, just with different recipes and packaging. Ecover has its own factory with fancy water recycling - but is now merely the eco brand of the S. C. Johnson multinational corporation, alongside their other products like Toilet Duck, Mr Muscle and Pledge. Yet people still choose the premium options.

[JQH]

I happily pay a few pence extra for a jar of Fair Trade coffee, although right-wingers an libertarians tell me I am "distorting the market".

If that distortion results in a better income for the Third World farmer who grew the beans then I'm all for it.

[dyqik]

As I've mentioned elsewhere, over here the price disparities between supermarkets for the same product, in the same packaging, are substantial.

Old Croc Cheddar (7oz) (one of the few strong enough cheddars on the market, imported from Australia) is $2.99 in one supermarket chain, $4.99 in another, and $6.99 in a third.

A rustic style sliced loaf from a local bakery (about the same quality as a UK supermarket bakery loaf) may be $2.99 in one supermarket and $4.99 in another.

Possibly interestingly, it's the more local and more widely loved chain that is the cheap option here, with the more widely known and distributed chains being more expensive.

And I'm not including Whole Foods here, or Costco and similar, which are their own special categories. And I don't count Walmart and Target as supermarkets, as they don't really act like that around here.

[dyqik]

I happily pay a few pence extra for a jar of Fair Trade coffee, although right-wingers an libertarians tell me I am "distorting the market".

If that distortion results in a better income for the Third World farmer who grew the beans then I'm all for it.

That's not distorting the market, it is the market.

[lpm]

This paper may go some way to answering your question. It's available on request from the authors.

ETA and this report.

Thanks for this. The first link is on how to develop luxury brands, rather that what the impact is. To summarise the second link:

- the jargon for this is "fragmentation between product and pricing"

- they have a causation of increasing prosperity leading to more people in "comfortable" and "spend freely", vs "cover the basics", which then leads to companies concentrating on getting richer people to spend more

- the US leads the way in this divorce of pricing from underlying product

- in the last decade, there's been strong growth at the discount and premium ends of the spectrum, while the mid price "normal" segment has suffered

- in Europe, the main trade-ups are electronics, clothes, food, coffee/tea and dairy

- labels like "organic" or "local" are very successful symbols in showing premium attributes while not necessarily adding any quality

[science_fox]

This paper may go some way to answering your question. It's available on request from the authors.

ETA and this report.

Thanks for this. The first link is on how to develop luxury brands, rather that what the impact is. To summarise the second link:

- the jargon for this is "fragmentation between product and pricing"

- they have a causation of increasing prosperity leading to more people in "comfortable" and "spend freely", vs "cover the basics", which then leads to companies concentrating on getting richer people to spend more

- the US leads the way in this divorce of pricing from underlying product

- in the last decade, there's been strong growth at the discount and premium ends of the spectrum, while the mid price "normal" segment has suffered

- in Europe, the main trade-ups are electronics, clothes, food, coffee/tea and dairy

- labels like "organic" or "local" are very successful symbols in showing premium attributes while not necessarily adding any quality

How are you defining Quality there?

[lpm]

I happily pay a few pence extra for a jar of Fair Trade coffee, although right-wingers an libertarians tell me I am "distorting the market".

If that distortion results in a better income for the Third World farmer who grew the beans then I'm all for it.

This is more than "a few pence extra" though. It's not paying 3p per tea bag instead of 2p. There are teas in the supermarket where people are paying 20p or 30p.

Ostentatious displays of status symbols accounts for people paying premium prices for cars, clothes and smartphones. But does anyone buy Teapigs tea bags for display reasons? Keep them in the cupboard and dig them out when the neighbour pops round, like our grandparents did with the best china? While casually leaving the top brand dishwasher tablets visible?

The vastly higher costs can not be coming anywhere near reflecting higher environmental or ethical standards.