Friday, March 17, 2006

Beware of Price Perceptions

Most mornings (depending on where I'm working), I grab a coffee from Gloria Jeans. GJ's is an Australian-owned, franchised chain of coffee shops, and a recent winner of Australian Franchise of the Year.

Anyway, on Wednesday my regular brew rose in price by 20c, from $3.50 to $3.70. Being a franchise, every Gloria Jean's probably put up its prices by the same amount across all its stores (after all, when was the last time you saw two or more McDonalds engaged on a price war?).

This price increase probably hasn't caused too much grief amoung GJ's customers around the country. But in Melbourne's cafe society, it may have been perceived differently. Wednesday was the day the XVIII Commonwealth Games started in the city, a time when the city is bursting at the seams with tourists, who have little or no knowledge of GJ's prices.

But for locals, it wouldn't surprising if the price rise has been accompanied by what appears to be a shot of price gauging and opportunism. GJ's could probably have picked a better day to change prices.

Happy St Patricks Day!

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