Why would a store charge more for a smaller soda?

September 26, 2012 7:13 PM

A store charges more for the smallest size of fountain soda than for the next size up. What’s a rational explanation for this? The store is a Quick Chek, for what it’s worth.
posted by Sidnicious to Society & Culture (20 answers total)

It's usually a fancy container, like a designed glass bottle, or similar.
posted by Mai2k3 at 7:15 PM on September 26, 2012

Response by poster: Mai2k3: Trust me, all of the cups are the same kind!
posted by Sidnicious at 7:17 PM on September 26, 2012

I remember reading somewhere that people will pay extra for imposed portion control so they don't have to use will power... like they will buy a small ice cream cone even if it's only 1% cheaper than the medium. I never heard of the small size costing more than the medium, but that could be the reason.
posted by scose at 7:24 PM on September 26, 2012 [1 favorite]

Because they can, basically. They have some research that says some people will only pay 99 cents for a drink, so they have one available for 99 cents, but this size at this price nets them the best margin that they can get, so they highlight it with big numbers and make it look really attractive, and correctly assume that most people won't carefully look at the rest of the ad, they'll just buy the one with the big red numbers.
posted by brainmouse at 7:25 PM on September 26, 2012 [2 favorites]

Are they exactly the same kind? A lot of convenience stores and fast food places sell the smallest size in a paper cup, and the bigger sizes in plastic ones. If that's the case, maybe the smaller cup costs more?

Not on account of it being fancy or anything, just because, like, the supplier sells a case of 12 oz paper cups for $19.95 and a case of 20 oz plastic cups for $14.95.
posted by Sara C. at 7:25 PM on September 26, 2012

Three offhand possibilities:

(a) They're getting a promotional allowance from somewhere on the 32 oz.
(b) They think that some percentage of customers will always order the smaller one, regardless, and they're gouging those price-insensitive shoppers.
(c) Some math tells them that the 32oz is the opotimim size and they want to discourage purchasing anything else.
posted by tyllwin at 7:25 PM on September 26, 2012 [5 favorites]

It's a marketing gimmick, and not even of the "loss-leader" variety, since they're still pulling a profit off of a 32 oz. fountain drink. The extra money for the larger cup and extra syrup + carbonated water are pittance. But hey, there are chips! And gum! I probably need some gum. And there are higher markups on the chips and gum (etc.)

Will people drive/walk a bit further to save 20 cents on a soda? Evidently. I see stuff like this all the time.
posted by Ufez Jones at 7:26 PM on September 26, 2012

optimum, but you get the idea
posted by tyllwin at 7:26 PM on September 26, 2012

Short answer - Some people will always order a large. Some people will always order a medium. And some people will always order a small.

Very, very few people actually look at the price difference between them. This store has probably noticed that most customers buy smalls, sooo...

On preview, what tyllwin said, part b.
posted by pla at 7:27 PM on September 26, 2012

There is higher demand for the medium than the small, so they can charge less for the medium and still make a profit on volume. The demand is so great that they can even drop the price below the price of the small and still be profitable on volume!

It's the same explanation as why a flight from Vancouver to Toronto with a transfer in Winnipeg can be priced cheaper than a flight from Winnipeg to Toronto. It's the demand.
posted by ceribus peribus at 7:47 PM on September 26, 2012

I'm one of the weirdos that would buy a small and pay 10c more because I am never, ever going to drink 32 oz of anything and I'd rather carry around a small empty cup than a larger half-full cup.
posted by desjardins at 8:21 PM on September 26, 2012 [5 favorites]

This is basic market economics-- people who buy small instead of larger are deliberately trying to limit themselves (or their kids) and thus are not the same market as people who will buy the cheapest deal or the largest size. Charge what the market will bear. (This is not gouging, even by the most generous definition, and even if I believed in gouging.)

Anyone with sense will buy the 32oz and either pour out half, or just half-fill in the first place.
posted by Sunburnt at 8:45 PM on September 26, 2012 [1 favorite]

also, the cups cost MUCH more than the soda inside (percentage-wise it's like twice as much or more...the mark-up on soda is HUGE! like 1000% or more) and (because... MATH) smaller cups have a higher cup to soda ratio making it more expensive than the larger size.
posted by sexyrobot at 8:56 PM on September 26, 2012 [1 favorite]

Because people who were not inclined to buy a soda will buy one when they perceive it to be a good deal. 99 cents! That's even cheaper than the small!
posted by hydrophonic at 9:32 PM on September 26, 2012 [1 favorite]

I would assume it was promotional...sales on 32 oz. were probably down or something.
posted by lhude sing cuccu at 10:16 PM on September 26, 2012

Then there's McDonalds, which charges the exact same amount for all three sizes of regular coffee. Which just makes the fact that liquid part of your beverage is the least expensive part even more obvious. This is especially true with soda since most places buy only the syrup from the bottlers, mixing it with water and CO2 in the machine as it's dispensed. Cups, tops and straws represent more of the total cost than the soda.

I bet this store pays more per cup for the small and has decided to pass the cost onto their customers.
posted by tommasz at 6:07 AM on September 27, 2012

Best answer: It seems like this has always been the case, but I think demand is the answer.
posted by stopgap at 6:14 AM on September 27, 2012 [1 favorite]

In the last few years, there have been summer promotions for 99 cent beverages at a lot of places. Either a standard 32 oz fountain beverage, or all the sizes. In the last couple years, the promotion has held over all year in a lot of places. I think this is a remnant of that.

And I think tommasz could be right in that the 32oz cups might actually be cheaper these days owing to their popularity.

When I worked at McDonald's 15 years ago, the cost of the cup and the cost of the syrup/CO2 were about equal. I have no idea what the cost structure is now.
posted by gjc at 6:17 AM on September 27, 2012

I asked a similar question about vitamin pricing at a health food store, and the owner's answer was, "You wouldn't know if you didn't look, would you?"
posted by StickyCarpet at 10:13 AM on September 27, 2012

Response by poster: Thanks y’all! I also wrote to the company and got an official answer.

Thank you for contacting us.

We offer what is considered “regular” pricing on our 20- and 44-ounce fountain drinks. Our 32-ounce fountain cup is the most popular size, so we choose to provide our customers a special value price of 99¢.

I hope that you and your friends have frequent opportunity to take advantage of this great deal.

posted by Sidnicious at 8:38 PM on October 1, 2012