The Global Phenomenon of Abnormal Pricing in the Online Food & Beverage Industry
Archived analysis. Data from 2023 or earlier. First published on or before 8 June 2023.
Archived analysis of abnormal prices on food delivery platforms, from 0.1 drinks to billion-euro dishes, and why brands should audit their prices.
The era of digital commerce presents a world of opportunity for businesses, but it also comes with its fair share of challenges. One significant issue is maintaining consistent pricing across various platforms and regions, a key factor in establishing customer trust and brand credibility.
Our data reflected existing research findings. Businesses often adjust their prices in response to consumer feedback, with positive reviews leading to higher prices, and negative ones to lower prices. It was apparent that dynamic pricing strategies, powered by data analytics and pricing algorithms, were widely employed. These aim to optimize prices based on various factors, like demand and time. Further, our data highlighted the intense price competition among online food delivery platforms. Strategies such as discounts, promotions, and loyalty programs were commonplace, directly impacting the profit margins for both platforms and restaurants.
At Dashmote, we have an extensive overview of item pricing and fluctuations, allowing us to identify noteworthy instances of incorrect pricing in the food delivery sector. These examples underline the critical importance of price accuracy. Let's explore some of these instances.
Pricing Discrepancies: A Snapshot
Drawing on real-world data, we can gain a deeper insight into the magnitude of this issue and the importance of adopting strategies to counteract it. Our data revealed puzzling pricing discrepancies across various online delivery platforms. For instance, in the UK, a Pepsi Max listed on Deliveroo cost only £0.1, while a comparable Coca-Cola on Uber Eats was priced at £0.04. When we switched platforms to Just Eat, the price of the same Coca-Cola leapt to £0.15.
From Europe to Asia: A Global Challenge
The phenomenon of abnormal pricing was not limited to one country or platform: it extended globally, resulting in significant inconsistencies. In France, the issue was amplified with a Deliveroo-listed Coca-Cola priced inexplicably high at €399. Switching to Spain, we found surprising pricing on Glovo, where Monster Hunter Nintendo Switch games and accessories were fixed at €15000. Notably, 'Menu Cheesy Doritos' variants were priced extravagantly at €999.99 each, in stark contrast to their actual market value.
In Italy, on the Deliveroo platform, price consistency took an odd turn. Here, items as diverse as beverages and specific meal selections were uniformly priced at €0.1. Further anomalies appeared in Greece on the Efood platform, where a broad assortment of beverages, including Coca-Cola, Sprite, and even Fanta, were all listed at €0.1. Returning to France, a striking price variation could be observed on Deliveroo between a Red Bull energy drink listed for €0.1 and a 'Thieb bœuf' dish priced at a staggering €1.45 billion.
The issue wasn't confined to Europe. Even in Asia, we saw surprising examples. In China, on the Ele.me platform, an interesting anomaly emerged where a popular meal, 'Spicy Hot Pot', was listed at an exorbitant ¥1800. This is a price significantly higher than the expected cost, showing that pricing inconsistencies pervade diverse geographies and platforms.
The Consequences of Abnormal Pricing
These examples shed light on the challenges businesses face when managing pricing across different platforms and countries. Abnormal pricing can create customer confusion, undermine trust, tarnish brand reputation, and even lead to significant business losses.
The reasons behind these pricing discrepancies can vary from simple data entry errors and issues with digital listing management, to complex platform-specific pricing algorithms. Regardless of the cause, the impact on businesses is consistently negative.
Navigating Abnormal Pricing
To combat this issue, businesses should perform regular audits of their product prices across all platforms and regions. Transparent pricing strategies and maintaining close relationships with online delivery partners are key to ensuring price consistency. In the dynamic landscape of online food and beverage commerce, your brand's credibility and customer loyalty hinge on your ability to provide a consistent and trustworthy experience.
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