This archive report was first published on 26 October 2021.
Buying in bulk is a common practice that many consumers believe will save them money. However, a recent spot check by Financial Standard in several supermarkets revealed that this may not always be the case.
For instance, while a 1kg packet of Soko maize meal goes for Sh54 at Cleanshelf's Rongai branch, a 2kg packet of the same brand costs Sh107, while a 5kg one goes for Sh270.
This means that if you go for a 2kg packet of the brand, you would save Sh1 compared to buying two 1kg packets whose cost comes to Sh108. However, if you buy the 5kg packet at Sh270, you would spend Sh2 more.
Conversely, if you opt for two 2kg packets and a 1kg packet, you will make a saving of Sh2, as the total cost comes to Sh268. This goes to show that there is no value in buying in bulk going by the cost of the 5kg packet that goes for Sh270.
The same case applies to the Pembe brand of maize flour, with a 5kg packet going for Sh285, a Sh15 difference compared with Soko.
Similar trends were observed in the pricing of other items, such as tissue paper. For example, a pack of four (Hannan) tissue rolls will cost you Sh147. However, if you bought four single rolls of the same brand at Sh34 each, it would set you back Sh136, an Sh11 saving compared with the price of the four-roll pack.
On the other hand, a two-roll pack goes for Sh75, which is Sh7 more expensive compared with buying two single rolls at Sh68.
According to Wambui Mbarire, the Chief Executive of the Retail Trade Association of Kenya (Retrak), pricing can be based on a retailer's pricing matrix or on the recommended retail price.
“The manufacturer could send you goods with a recommended retail price or it can be based on an individual retailer's pricing matrix,” said Ms Mbarire.
This phenomenon could subtly explain why the 'kadogo' economy - where households purchase small amounts of products that meet their daily needs - thrives in the country as documented in a 2014 survey by Nielsen.
“Similar to other African countries studied, affordability remains a key driver for Kenyans. Companies can use smaller pack sizes to make products more affordable,” reads the survey findings in part.
Former Tuskys Supermarkets Chief Executive Dan Githua also weighed in on the issue, saying that apart from the recommended retail price, retailers also consider competition and their profit margins when pricing their products.
“That is where the difference comes in because different retailers will load a different margin,” said Mr Githua.
He added that pricing also affects aisle traffic, which is determined by consumers' shopping behaviour.
