This forum is about wrong numbers in science, politics and the media. It respects good science and good English.
I think gouging is a different phenomenon. When a hurricane is about to hit your city and you can't get out, those who are able will pay the $100 for a bag of rice and $5000 for a rifle that the shopkeeper wants. During the petrol strikes in the UK some years ago, a few enterprising independents with remaining stock charged £5 a litre. That isn't a myth, it actually happens, and there are even laws against it in some places, to ensure the benefit goes to the quick rather than the rich. Cue political discussion.
Rounding prices up (rather than down, or 50/50) when a once in a lifetime opportunity, such as decimalisation or a change of currency presents itself, doesn't seem to fit the definition. Inflation and competition see to it that any benefit from doing this is short-lived.
Retailers don't look too closely at the margin on individual producs anyway. They can't. If someone goes into a supermarket and buys one of the thing with the biggest markup the supermarket still makes a loss on the sale. The public also doesn't understand the difference between profit and mark-up. They essentially believe retailers have no costs and think it's evil profiteering that one loaf of bread in their local shop costs more than 1/1000 of 1000 loaves at the factory gate. The Italian press have made a Daily Mailesque art form of this, with annual stories about how a loaf costs 3000% more than the wholesale cost of the wheat in said loaf.
It is also about outdated perceptions.
Supermarkets originally arrived on the idea of "stack it high and sell it cheap". The self service business model proved to be one of the most effective and still is.
But like all models it has costs.
The costs of doing business via the self service model are spoilage and shoplifting. You can't eliminate either without damaging the model so much it no longer works.
So instead they persist with the model but keep track of losses, so much easier with computers. As shoplifting increases and threatens margins so they respond just enough to protect the margins but not so much as to damage the model.
So we have the store detective. In my youth as a weekend assistant at Waitrose that was a little old lady who wandered the isles all day with a basket with about two items in it.
Then comes security tags and uniformed guards at the doors, and in the US we now have till reciept checks at the door and the receipts marked by the door staff to show you took the goods with you (otherwise they'd simply buy some stuff, off load it outside, come back in and grab duplicates and when stopped show their receipt).
Of course, when they start tagging packaged meat and the staff neglect to detoxify the tags you get stopped at the door when the alarms go off.
And for some reason Sainsburys with their DIY fast track just take your money when you hand in your points card and bar code reader so anything tagged is still actively tagged as you try and leave the store.
But the point is that the idea that prices are cheap is misleading. Supermakets haven't bothered to tell anyone but what they are effective at is convenience and not price. This is especially noticeable at the specialist stores like Halfords for car accessories. I went there for a new fuse box for the wife's car.
So I went to an auto electrics specialist shop, not part of a chain, and the price they wanted was £4.50.
But please, maybe the public don't know the difference between mark-up and profit, but the supermarkets are not charities and they are making substantial amounts of money and it would be a mistake to think that equal profits are made all the way down the supply chain or that they are necessarily the cheapest any more.
Look, a good use of a model!
The model is bounded within the store. It corrects itself at the register (which is tied to accounting which handles payroll and expenses). If the model isn't working, you see that in the accounting books. Revenue < Expenses. FIX IT QUICK!
The challenge with the offloading to computers is the many ways people manipulate the inventory system and all the different layers that do the manipulation.
If you RFID every item, you can conceivably drive a cart down the aisle and inventory your stock. If someone wants to help you shrink your shelves without you knowing they can find that RFID and stick it to the opposite side of an adjacent product. Or in the case of DVDs, excise the DVD and leave the wrapper (which is why DVDs are so painful to get open these days if you do buy them).
Any automation will leave a hole for someone to sneak through.
Some of the holes people are finding are amazing. The TIDE scam was a great example. People noticed that the high margin, high return items were too carefully watched. Go take lots of the low priced low margin items and resell them "legitimately" to other resellers.
How many guards do you hire?
How well do you train them?
How much do you pay them?
No matter where you are or what philosophy you espouse (Communist, Socialist, Corporatist, Capitalist), Revenue has to exceed Expense.
The supermarkets make miserly returns on turnover and even more miserly returns on capital. One wonders why they even bother, other than for the fact that they are already doing it and can't think of anything else to do.
That is the secret of their success. That they make such pitiful returns yet stay in business. Quite the opposite of the popular belief that supermarkets are driving the dear old "mom'n'pop" (since when did such an abberation become customary in rightpondian English?) stores out of business by making sickeningly huge profits.
Your price difference on one article is great anecdata but hardly useful. That convenience can easily be worth more than heading to the old-fashioned hardware store - the £10 "surcharge" is eaten up in a few miles driving, for example. And you'll find plenty of stuff the friendly neighbourhood hardware store is marking up hugely.
Huge markups are not always insane. It helps keep the doors open. I was at a hardware store a couple of years ago looking for a lightswitch. There was one on the rack. I grabbed it $4. I started to walk away, but something on a bottom shelf caught my eye. Bulk light switches. $0.99 ... I picked it up. I compared it to the carefully packaged item. The same switch. Pretty **** clever that packaging...
Then again, paying $4 to get a switch and install it yourself is still a lot cheaper than calling in the electrician. You can look at the package and say HE TOOK AN extra $3 from me for the honor of throwing away packaging. OR you can say, Hmm. one way I saved $60 over calling in an expert. The other way I saved $57.
Either way though is a lot cheaper than improvising your own from available items short of leaving the wires bare and touching them together when you want to turn on the lights. If you just bend them correctly you can create a spring loaded switch that keeps itself on when touching and apart when not.
Which reminds me of that embarrassing incident 30 minutes or so after I bought the light switch. I installed it, putting the hot lead on one side and the ground on the other. I turned on the light switch and the breaker blew. ****. Three more throws of that switch before I suddenly saw the circuit in front of my eyes. I called myself a few names that would be filtered by this lovely forum, looked around to see if anyone else had seen my awkward idiocy and swapped the leads...
Which reminds me of the time I thought it would be cool to adjust my 220v water heater with my wet hand and a swiss army knife. Never did find that knife. The real irony was the 15 months of training I had just completed that included extensive sections on proper electrical safety precautions.
My colleague and I were at the Ryvita Plant in Poole, installing an American made Mass flow meter.
The design of the power supply part of the PCB was such that it was as easy as anything to short the L and N terminals (not so easy in the UK manufactured version) and that, inadvertently, was what we then did.
There is nothing so embarrassing as the sudden hush of an entire factory shutting down as various mains breakers tripped out and the silence then filled next with the sound of rushing feet heading our way as the plant manager came to see what had shut-down his plant.
The next day when we arrived we found their electrician had been busy and installed our own personal circuit breaker so that if we repeated our misadventure only our bit of kit would be affected.
Mistakes in the home environment are far less embarrassing.
Incidentally, Ryvita is a healthy diet option.... but my colleague (from Manchester) was impressed by the works canteen (something that appears to be disappearing from the British working scene) where breakfast was all things cooked in deep fat fryers.... including black pudding, sausages, bacon, mushrooms etc. The sight of all these staples swimming in fat was almost too much for him.
Possibly the only "food" product for which the packaging is both more nutritious and tastier. Allegedly.
As I didn't mention which food product I assume no writs will be served.