Monday, August 15, 2011

Let them eat ... bread

This evening on the way home from work I had to stop off into the supermarket to pick up a few items. Normally I just lob the groceries in the basket, paying no attention to the prices, and then hand over my hard earned cash. This evening though, for some reasons I noticed something a bit odd while picking up some bread.

Normally we get through about 3/4 of a sliced pan before it goes stale and starts turning a bit blue. So being my environmentally conscious self I had a look to see if they had any small pans on the shelf. Usually by 6pm the few that were delivered that morning are well gone but today I was in luck. There on the top shelf was a small Brennan's (non batch) waiting to find a new home. Yoink says I, until I noticed the price sticker underneath - €1.39. Casting a downwards glance I see plenty of full sized loaves prices at €1.60.

Now with my ostentatious cash splashing and jet-set lifestyle I shouldn't really be quibbling over 21c but it does strike me as odd that pro-rata the full sized loaf should cost 67% more or the half sized 43% less. I can accept that there are economies of scale in the larger loaf. I imagine that about 90% of bread is sold in the larger form factor. But is the cost differential really that much? While it uses about 15% more packaging per kg, it takes up the same amount of shelf space.

So who is pocketing the margin? Is it the bakeries or the retailers? Or is it just a case of this is what the market is willing to bear? To make this post even slightly political, one wonders was this price differential always the case, even in the era of the Grocieries Order. If not, then Micheál Martin has to bear some responsibility for this fiasco. I'll just add it to his long list of failures.

So in the end I put the small pan back on the shelf and took the large one. It's better value for money even if I know I'll end up putting the last few slices into the brown bin at the weekend.


  1. Nice article, thanks for the information.

  2. I wonder is it because bread is a very commonly bought item and used to even be a loss-leader. People who buy half-loaves are poor customers and clog up the checkouts by buying 3 things every day instead of 50 things twice a week. Is it the same with small volume milk?

    I can't find it now but a recent study showed that the each person in a supermarket is equivalent to about 23 items. That is if you want to know which queue is shorter you should calculate total items held by all customers + 23 times the number of customers. So 10 people with 4 items each will take longer than 1 person with 200 items. Mostly due to paying.

    So although half-loaves and other similar items are cheap for the super market to buy, they are more expensive to sell.