Identifying Financially Sustainable Pricing Interventions to Promote Healthier Beverage Purchases in Small Neighborhood Stores
ORIGINAL RESEARCH — Volume 15 — January 25, 2018
PEER REVIEWED
Panel A shows how demand for water increases with decreasing water prices. The range of pricing options are from $0.75 to $1.00 for water and $1.00 to $1.30 for bottles of SSBs. Only a subset of price combinations of SSBs and water are profitable: those in which the price for water ranged from $0.80 to $1.00 and the price for SSBs ranged from $1.00 to $1.26. Panel B shows the percentage increase of demand for water and percentage increase in profit from all beverage sales for profitable pricing combinations only, starting with $1.00 for water and $1.05 for SSBs. Three different prices are highlighted. The first is the price combination for the biggest percentage increase of demand for water: $0.80 for water and $1.26 for SSBs, with an approximately 14% increase in demand for water and no change in profit. The second is the biggest percentage increase of profit: $1.00 for water and $1.26 for SSBs, with an approximately 6% increase in profit but no increase in demand for water. The third is equal increase of both demand and profit: $0.94 for water and $1.24 for SSBs, with an approximately 4% increase in profit and 4% increase in demand for water.
Figure 1.
Water demand and profit for coordinated price changes for selling bottles of sugar-sweetened beverages (SSBs) for corner store A, Baltimore, Maryland, 2014. Panel A shows absolute demand of water over prices of water and bottles of SSBs. Panel B shows only profitable price combinations for percentage change of water demand in relation to profit change.
Panel A shows how demand for water increases with decreasing water prices. The range of pricing options are from $0.75 to $1.00 for water and $0.95 to $1.00 for cans of SSBs. Only a subset of price combinations of SSBs and water are profitable: those in which the price for water ranged from approximately $0.85 to $1.00 and the price for SSBs ranged from $0.75 to $0.93. Panel B shows the percentage increase of demand for water and percentage increase in profit from all beverage sales for profitable pricing combinations only, starting with $1.00 for water and $1.05 for SSBs. Three different prices are highlighted. The first is the price combination for the biggest percentage increase of demand for water: $0.87 for water and $0.93 for SSBs, with an approximately 9% increase in demand for water and no change in profit. The second is the biggest percentage increase of profit: $1.00 for water and $0.93 for SSBs, with an approximately 4.5% increase in profit but no increase in demand for water. The third is an equal increase of both demand and profit: $0.96 for water and $0.90 for SSBs, with an approximately 3% increase in profit and 3% increase in demand for water.
Figure 2.
Water demand and profit for coordinated price changes for selling cans of sugar-sweetened beverages (SSBs) for corner store B, Baltimore, Maryland, 2014. Panel A shows absolute demand of water over prices of water and cans of SSBs. Panel B shows only profitable price combinations for percentage change of water demand in relation to profit change.
The opinions expressed by authors contributing to this journal do not necessarily reflect the opinions of the U.S. Department of Health and Human Services, the Public Health Service, the Centers for Disease Control and Prevention, or the authors’ affiliated institutions.