Cheap petrol an urban myth

[snopes]

Economists refer to it as TINSTAAFL, an acronym for "there is no such thing as a free lunch", and in an Australian context it could be recast to TINSTACP - there is no such thing as cheap petrol.

The National Association of Retail Grocers knows there is no such thing. Last week, its senior policy adviser Gerard van Rijswijk told the Australian Competition and Consumer Commission's inquiry into petrol prices that the supermarket shopper docket discount system was "a sham".

The cost of the discounts in service stations operated by Coles and Woolworths, he said, was recouped by lifting grocery prices.

Shoppers fill their trolleys with life's essentials and wonder why their fistful of dollars seems to buy less with every passing month, a concern soon forgotten in the excitement of being given a docket which entitles them to a 4¢ a litre discount at a Coles-Woolies servo.

http://www.news.com.au/couriermail/s...-27197,00.html

[matches]

Umm...so the news is that supermarkets use loss leaders to encourage shoppers to use their store?

A couple cents off a liter or a gallon of gas is a great way to get people into the store, just as a couple of cents of a gallon of milk, a dozen eggs, or a pound of beef is a great way to get people into a store. If you're not an idiot you understand that a deal on one item is likely to mean an increase in the cost of another, and you weigh your choice as to whether or not you want to pay the higher cost for a non loss leader item or if you want to go across the street and pick up the item at another store where it is the loss leader.

I am unsure how this is any differnt.

[A Turtle Named Mack]

I would shop at the same supermarkets regardless of the gas discount, especially since the particular stores near me do not have the gas pumps. So when I am able to use those, and it saves me 10 cents/gallon (and they are usually the cheapest gas in the immediate area anyway), I take it.

Often there is not such a trade-off anyway. If the volume allows a lower margin, both the store and the customer can reap a better return on the deal. That's the core principle for discount chains.

[Elsie]

Albertson's here in Chandler gives a $.25 off per gallon coupon when you buy $50 in groceries and $.50 off per gallon coupon when you buy $100 in groceries. I just started shopping at Albertson's not too long ago because one week I checked their sale ad against my regular store and that particular week they had some awesome deals that I just couldn't pass up. I wasn't even aware of the gas coupon promo until I got it at the check-out. I have shopped t Albertson't every week since because a) I don't see a noticeable price difference in the groceries between them and my "old" store" and 2) I get the gas coupon too.

[FullMetal]

Well, When Safeway started having Gas bars at their stores here, they started by offering a 3.5 cent / litre off with the safeway club card. A lot of other gas stations followed suit, to the point that I think now, the gas stations simply make up the 3.5 cents by increasing the price of gas 3.5 cents. it makes people happier to save 3.5 cents off 104.9 cents/litre gas, than paying 101.4 cents/litre.

I honesetly don't think Gas is any cheaper because of it...