Investment advisers always say you should never try to time the market, but based on our analysis of cheese prices, maybe it’s worth a go?
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Our team of cheese analysts have pored over the data collected since launching The Spinoff Cheese Index and noticed something pretty clear: most 1kg cheese blocks are discounted on a predictable week-on/week-off basis.
If you look at the above graph, it’s evident that Alpine Tasty and Mainland Colby cheese are regularly discounted for a week-long period every fortnight – so they’re on special for a week, then return to their “normal” price for a week, then go back on special for a week, and on and on it goes.
Alpine Colby is a little more erratic, but it is also frequently on special. We’d like to think that the price of Alpine Colby briefly plummeting to $9 was a reaction to the TSCI launch, because we have not seen that steep discount in the last month.
Are these special prices in fact special?
This got us thinking: if prices are changing so frequently, how do we know which is the real price and which is the “special” price? On its website, the Commerce Commission says of discounts:
“Businesses often discount goods and services and advertise the savings you can make by buying at the discounted price. A business that makes these types of discount claims might mislead consumers if: the claimed usual price is one of many prices at which the business commonly sells the good or service.”
We asked the Commerce Commission for comment on this specific fluctuating cheese price, and a spokesperson said if a business routinely sold products at a promotional price, that promotional price becomes the usual selling price. “It would be misleading for a business to keep claiming it was discounting a price if the discounted price was the usual selling price.”
The spokesperson said as the commission hadn’t investigated this specific example, it couldn’t comment on any potential breach of the Fair Trading Act. “Generally, to determine the usual selling price it is helpful to have a longer sample of pricing information than that provided.”
They also said, however, that “in our market study into the grocery sector and the final report released in early March 2022, we identified several areas under the Fair Trading Act and Commerce Act where we intended to consider further compliance and enforcement actions.
“This ongoing work is a priority area for the commission, and includes restrictive and exclusive covenants, refusals to supply due to low retail pricing, and pricing and promotional practices.”
Unfortunately none of this is a major surprise. That same market study highlighted the excessive discounting and promotional pricing conducted by New Zealand supermarkets:
Regardless of the moral or legal implications of these weekly price changes, unless you’re scoffing more than a kilo per week you should be able to time your purchases to always access the discounted price – assuming our sleuthing doesn’t cause the supermarket to change its strategy.
What about the never-discounted king of cheeses?
Bucking the fortnightly trend is Mainland Tasty. Unsullied by cheap tricks, the bougie paragon of cheeses never budges from the perfectly round price of 20 dollars and zero cents per kilogram. A price that one supermarket steadfastly claims is “great”:
That supermarket would of course argue that many of their prices are also “great”:
We asked Consumer NZ for its thoughts on supermarkets using big “Great Price” stickers on products that are rarely, if ever, discounted, and a spokesperson said this type of marketing was “certainly ethically questionable”, with a question mark over its legality.
“The vagueness of this statement means supermarkets can hide behind an impression you are getting some type of added value in the price, when this may not be the case.
“There is a question mark over the legality of this type of marketing and whether it is misleading or not will depend on the precise example and the circumstances. It is certainly ethically questionable, given the evidence of consumer confusion. We think the Commerce Commission should use its powers to require supermarkets using this type of marketing to substantiate their claims.”
Remember, as a wise investor once said: there is always free cheese in a mousetrap.
*The supermarket in question did not respond to request for comment by deadline