Deceptive Retailing: Bagels

For a bit of a change, this is a post about an ordinary consumer item: the lowly bagel. It is motivated by what I consider an underhanded marketing tactic. Since everything is clearly labelled, there is no deception involved, nor is it in any way illegal, but it does highlight an important issue in the relationship between consumers and businesses.

The product is Country Harvest bagels, manufactured by Weston Bakeries, a large Canadian food products corporation. Their regular price at Loblaws is $3.29 for a half-dozen of these popular baked goods. Something changed recently, and it wasn't only the format of the plastic package.

The bagels got smaller. Instead of 672 grams per package of 6 bagels, you now get 540 grams worth of 6 bagels. That's a 20% decrease in quantity for the same price. This is a unit increase in price, except that it has been accomplished by a reduction of the product quantity rather than a price hike.

Price increases are not unexpected since many agricultural commodities have seen sustained price rises in the past couple of years, which is good for our farmers. However, how the input costs are dealt with does matter: do it wrong and credibility is risked, along with consumer trust. Most companies will loudly trumpet on their packaging when they provide more product for the same price ("same low price, 15% more!"). Price and unit-price increases are announced the same way that heavy-metal content is promoted in bottled water plastic packaging -- silently.

A slightly different package (to fit the smaller product), a single number changed on the packaging, and the same price. Most people would consider this deceptive, and I am among them. If they had instead kept the product unchanged and increased the price, I would have respected their position, even had I then considered alternative products.

Now I am unhappy that they have pocketed a 25% price hike (the reciprocal affect of a 20% quantity reduction) with exceptional stealth. How much of this money goes to Weston and how much to Loblaws? I don't know, so both companies are sullied by this action. The proper way to build customer loyalty is through respect. It's only a bagel, but it can cause long-term damage to their businesses. After all, tactics like this are not isolated; they add up in the public consciousness.