Sushi Money

Does something as simple as the shape of a milk carton influence your decision to shop at a particular store? Or is price a more important factor? Maybe a strange question, but a couple of months ago one of our grocery stores dramatically changed the shape of their gallon milk containers. Here’s a picture- can you guess what store this is from?

And why did they choose this shape? Maybe a packaging decision… they can fit more of them in a box or crate, and save on shipping costs with large volumes? Now what about customer concerns, usability or ergonomics? They certainly didn’t ask anyone at our store, and even the checkout personnel were surprised by these when they first came out. I will say the jug is narrower and fits on a refrigerator shelf much better. But it’s taller and more awkward to hold and pour. What I really don’t like about it is that it doesn’t pour as effectively! It’s easier to spill the milk, and the milk comes out faster and drips more often. Under the cap there is also a peel-off seal that is somewhat of a pain to deal with. Overall most customers we have talked with do not like the milk jug redesign.

Yet with all of the things I don’t like, what I do like is the price. It’s about .75 cents to a dollar cheaper than any other store I’ve found. Which is about 25% to 35% of the price of each gallon! We go through about 3 gallons of milk each week, so price is the major factor for us and we buy this one.

I call it the “milk jug factor” although I’m sure there are more appropriate economic terms. As we consider price versus usability for a given product, we must decide which is the most important. A lot like opportunity cost decisions, but more in terms of efficiency or usefulness to a given person. Economically speaking, I imagine milk is a fairly “inelastic” consumer item. Our society drinks a lot of milk, and people are going to buy milk regardless of small changes in price, or even carton shape/size. I think this grocery store figured that part out, and maybe it saves all of us money. Would you buy this one? Does it even matter? I still like the old-fashioned fat milk jug better… but I’m not willing to pay for the difference! Did you guess what store this is from?

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