Stupid Consumer = Stupid Prices

I’d have loved to use the word ignorant, it would have been more sensible, but like Vlad I tend to lose control when I see some of the complaints about changes in prices following the switch to euro. Thanks to David Casa I discovered Pricewatch – a site purporting to monitor changes in prices of a number of items that are “frequently purchased”. Not a bad idea on the whole -it  could be useful if used by intelligent consumers to target real abuses. A quick glance through the complaints shows that “intelligent consumer” is a dying breed.

Before I go on let me tell you about one site that is very popular with the French – one among many I hasten to add. It’s called Kelkoo (a play on the words “quel cout” or “what price”). The principle is simple. You look up a product, compare the different prices available on the market then buy from the cheapest supplier. Kelkoo is mostly limited to internet purchasing but there are other sites that do the trick for consumers.

Back to Malta. It would seem that consumers, or those who bother to use pricewatch, have not grasped the principle of consumer power. It’s not purchasing power I am talking about – that is all about he who can spend most. It’s consumer power – the right to choose the cheapest option for the same product. Pricewatch is not a site intended to tell you where the prices are cheaper. It is intended for consumers to flag abuse of the changeover. As has been repeated ad nauseam a change in price of school canteen baguettes to a rounded euro price can reflect an increase of three Maltese cents. That is not technically an abuse. The worst example is the following:

Submitted By:Renato Joseph Costigan
Date Submitted: 09/01/2008 20:35:00
Outlet:
Complaint:I have been buying a sliced maltese bread from a street vendor for .54euro cents (.23c), when from a bakery just 200mtrs away I buy it for .51euro cents (.22c.). The vehicle’s No. is DBJ 075. Thank You and well done for your efforts. NB:- Between 16.30 hrs and 17.00 hrs he will be around the following streets ie Pjazza 7ta’ Gunju, Barbara Street and the nearby streets.
Comments: This is a case where an item can be sold at different prices from different outlets and it gives the customers the right to shop around. The street vendor is buying it from a bakery and it stands to reason that he has to make some profit. We tried to call you to explain this issue but the tel no provided was not correct.

Full marks to Pricewatch for the answer. They were being polite. I hesitate as to whether I should go one step further. For the sake of decency let me just ask Renato Joseph (surely a trumped up name) one rhetorical question… If the street vendor sells the sliced maltese bread for 54 cents and your bakery JUST 200m away sells it for 51 cents, what is keeping you from buying your bread for 51 cents from the bakery?

Renato Joseph we do not live in the times of Price Control. Mintoff is retired and so are the socialist ideas of his government. Renato Joseph three euro cents are 1c 2mils in old money. Renato Joseph if you want to save your one cent two mils then walk the extra quarter of a mile.

There. I was polite wasn’t I?

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4 responses to “Stupid Consumer = Stupid Prices

  1. Claire Bonello

    Well obviously Renato Joseph can pop over to the cheaper baker down the road and make his paltry savings. But can everybody? Is everybody mobile enough, informed enough and ready enough to google the price of many consumables? In the case of a few cents, it’s nearly almost more convenient to round up and probably consumers (except for Renato Joseph) don’t really mind – it saves them the hassle of dealing with those minute coins which are equivalent to mils. But I suppose there could be some people (the elderly spring to mind) who can’t make it to the outlet which hasn’t rounded up and whose pension is a fixed sum and who are not internet friendly. Price control has dark Mintoffian overtones so I’m not sure what the solution is

  2. Ghalxejn tibqa tinsisti li l-hajja mhux sa toghla imma ghax il-problema m’hijiex il-1c tal-hobz jew it-2c ta’ xi capuccino. Il-problema hija s-servizzi li m’ghandekx ghazla fuqhom. Il-professur li min Lm20 issa sar jiehu E50, it-teacher tal-privat li minn Lm4 issa sar jiehu E10, il-plumber li minnflok Lm30 issa jiddeciedi li jiehu E100 ghad-dritt u affarijiet ohra li hadd m’ghandu kontroll fuqhom. Affarijiet li ma m’ghandhomx prezz fiss u li tistax tahdimhom bil-calculator.

  3. Antonio, i can confirm what you just wrote. In the construction industry this is what is happening. rates are being rounded up and always upwards. Believing that choice and competition alone can control price hikes is an illusion or a good excuse for those who do not want to do anything about it.

  4. To begin with. I never claimed that there will never be inflation. Every euro switch has an estimated inflationary effect. I heard something on the radio recently about there being a percentage of price increase that is expected normally (something like 0.3%) without abuses.

    Claire:I think we have to start by differentiating between a product purchased everywhere (like a box of teabags) and a product sold as part of a service – like tea sold in a bar or restaurant. In the first case, Pricewatch is doing just that. Checking that there is no increase in prices. In the case of the second the consumer remains king. You choose to go to a bar or restaurant or titotla and you determine which one does well by going there.

    Antonio & Rupert: Apart from the fact that I never said there will not be a change in cost of living, I still insist that the best way to control would be an efficient Competition and Consumer policy (As always, and not only in time of Euro changeover). Whether there is the euro or not, traders are constantly escogitating ways of milking the consumer. The problem is not the euro… it’s the efficiency and means available for the authorities to monitor the markets.

    A general remark is that the euro changeover needed an adjustment. A trader had to calculate his new price and see whether to round up or down or just leave the converted price as it is. Whether he will suffer / enjoy the effects of his decision depends on his consumers. Consumers themselves will need time to adjust and understand their numeric buying power in terms of numbers of euros. It is much easier to feel shortchanged (or even to feel that you are making some deal) now than later on when consumers are more aware of the value of the euro per se and not vis-a-vis the lira.

    Having said that I admit that it is not easy for anyone to adjust!

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