Yesterday, I went to Lucky to buy some bread. Usually when I am there, I meander to the produce section to see if I like something there. As I was walking past the berries, I noticed that some of the strawberries were on sale.
The two pound clamshells of strawberries cost $8 each (or $4 per pound). The one pound clamshells of strawberries were 2 for $5. That translates to $2.5 per pound. So if you were to buy less strawberries, it would cost you something like 30% to 40% less per pound!
That went against everything I had learned about volume pricing! Why would they do that? Who would buy the 2 pound boxes? For a few minutes I was confused. Then I realized the secret.
They were depending on human psychology to get people to buy way more strawberries that they actually needed. Lucky was already making their target revenue and profit figures selling strawberries at $2.50 a pound in this season. There was not need to sell them for $4 per pound to make money! And, of course, they were not selling any at $4 either.
People would just see the savings of $3 if they buy two 1 pound clamshells instead of a single 2 pound clamshell. Some people might even be tempted to buy 3 pounds. They would only pay $7.50 for 3 pounds – still less than the $8 for 2 pounds.
Nice trick Lucky.
Of course, I could be wrong. I invite you to suggest an alternative explanation if you have one.