Same product - different prices: Greggs sausage roll costs more in Hammersmith than Hull

The Daily Mail reports that a 66p sausage roll in Hull sells for 85p in Hammersmith – that’s almost 30% more. That finding won’t surprise you perhaps, although the size of some price differences is quite a shock.

Economists call this phenomenon price discrimination. That basically means that it is possible to sell the same good or service at different prices if markets can be separated. Obviously, cinema tickets in London are in a different market to those in Hull so can retail at different prices. That might also be true for the times of day when things are sold (think of ‘off peak’ and ‘peak’ prices).

Firms like to be in this situation, as it allows them to get closer to charging the maximum price they can get from each customer. Often a cleverly targeted discount will bring in customers that might otherwise pass by. Keep your eyes peeled: it’s surprisingly common, and perhaps worth a mention when you discuss pricing policies in your work.