Price Elasticity of Supply

Heston Blumenthal’s Hidden Orange Christmas pudding is expected to sell out once again at Waitrose as the last few reach the shops next week.

Last year saw prices rise on eBay to more than £250 for a product with a price tag of £13.99.

This year Waitrose have ordered more puddings from their suppliers to cope with the demand but they are once again being surprised by the amount that have been snapped up already. There is a possibility that speculation has a role to play here and it may be worth watching eBay to see the outcome!

Price inelastic supply is the cause of the problem for Northern Foods, who supply the Hidden Orange pudding to Waitrose. Last year they bought the entire stock of Valencian candied oranges, which take 7 weeks to cure. Once the time to the festive season is less than the lead time of these oranges, shoppers will begin to panic. Last year The Telegraph offered readers an alternative by showing them how to make their own.

This year stock has been built up to cope with the rush, an alternative, cheaper version is available, and both Heston and Delia have more than one festive offering to tempt shoppers.

Waitrose are looking to capitalise on the ‘Delia factor’, with television advertising and a dedicated website space.

I think there’s something to be said for making your own…