Discounting bulk and the conundrum of Croatian commerce

For reasons of matrimony, I’ve spent a good deal of time over the past three years in Croatia. (In other words, dividing my time between Not-Bielefeld and Not-Yugoslavia.) Can’t say that I’m much wiser about the Croatian language over that stretch though:

• seven cases and so up to seven different words for the same noun,
• three genders but no articles,
• a general reluctance to include vowels in their words such that the letter r is sometimes (involuntarily) co-opted to act as one, and
• no q, w, x, or y in their alphabet (meaning that, among other things, WTF? becomes simply F?), but a whole array of new consonants (č, ć, dž, đ, lj, nj, š, and ž) at least the first two of which even most Croatians can’t tell apart phonetically.

But, if you can believe it, I’m even more confused over the Croatian economy …

(As have been the Croatians for most of 2023. Since the first of the year, the country officially switched over from the kuna (which more or less translates out to “weasel“) to the Euro (which more or less translates out to “admin”). So at midnight last New Year’s Eve, the prices of drinks as well as of everything else dropped by about 7.5x minus the inevitable massive rounding up by all the shopkeepers. Even after they sobered up again, none of the customers really knew if they were getting ripped off more than usual anymore—more on this below—and there was about the same amount of general public confusion as when Germany switched over to the Euro some 20+ years earlier and the population was confronted with the even more mathematically obtuse exchange rate of almost dead-on 2:1.)

What I’ve noticed over the past few years is that Croatian stores don’t really seem to understand the idea of bulk discounts, where things become proportionately cheaper the more of them you buy. In fact, it’s often the other way around insofar as the XXL versions are proportionately more expensive.

Take this example I spotted a few weeks ago …

As you can see, at a local supermarket in Zagreb, the single, larger cans of Red Bull in the middle cost 2.26 € apiece whereas the four-pack of smaller cans on the right costs 6.25 € in total. No problem there so far: more to drink, more to pay. But, if you whip out your electron microscope and try to make out the prices per unit volume on the lower left of the price tags, you see that the four-pack is only marginally cheaper at 6.25 € / L compared to 6.37 € / L for the single cans. The extra cardboard holding those four packs together must be some quality stuff.

(Now, by way of confession, what originally caught my eye by this example, and the inspiration for this blog piece, were the single, smaller cans on the left, which at 1.19 € each are much cheaper per unit volume (4.76 € / L) than the bundled four pack of them. So, whereas most other countries would offer “Buy 4, get 1 free”, Croatia hits you instead with “Buy 4, pay for a 5th you don’t even get.” What I didn’t realize, and what was not so obvious at first glance, was that this was a sale price. So caught between the immortal words of either T.H. Huxley (“The great tragedy of Comedy: the slaying of a beautiful joke by an ugly fact” (or something like that)) or Richard Branson (“Screw it, just do it“), I decided for the latter. The example still shows my general point, just not as ridiculously outrageously anymore.)

This, however, was just one (less) obvious (than originally hoped for) example that I’ve stumbled on. There are many others. Cheese tends to be a good one as well. For some strange reason, there is a worldwide contradiction that cheese becomes cheaper by weight the more you process it (e.g., shredded or sliced cheese compared to block cheese), with the extreme bottoming out, both economically and gustatorily, being Cheez Whiz, which for the longest time was marketed as “processed cheese food”. (Dunno. Maybe processed cheese is cheaper by weight because it represents the scraps from the floor that the company can’t otherwise sell.) But only in Croatia does block cheese tend to be more expensive by weight the bigger the block is. Although thoroughly consistent with smaller, processed cheese bits being cheaper, it is hard to know what the logic behind discounting bulk (as opposed to bulk discounts) is except possibly for an unhealthy sense of cynicism on the part of the Croatian shopkeepers that anyone will even notice. With or without an electron microscope.

What most Croatians do notice, however, is that the prices they pay, regardless of how many of whatever they buy or how big it is, tend to be higher than those in the rest of western Europe and in Germany in particular. Again, this is not a one-off thing. And now where they no longer have to whip out their weasels to pay for stuff, it’s a lot easier to see just how much more expensive everything generally is in Croatia. That bigger can of Red Bull? Costs only 1.69 € here in Not-Bielefeld.

Although the graphic here on the right is only for one, sort of unnamed, drugstore chain, things generally are cheaper in Germany than in Croatia across the board and this despite Croatia losing badly to Germany in any and all comparisons involving salaries and relative purchasing power. (But then Croatia does have the better national football team at the moment, although I’m not sure if that evens things out.)

Naturally there are extenuating circumstances, like having to produce products for a much smaller market with a much weirder language as well as getting them there. Neither really hold water though, regardless of the size of the can.

Transport costs nowadays are by far and away the most negligible component in the sticker price of anything. There’s also the fact that Croatia pretty much borders on the German speaking part of Europe in the form of Austria. (Ok, yes, Slovenia technically does lie between Croatia and Austria, but it takes less time to cross Slovenia than it does to read this sentence.) And remember that Red Bull is Austrian and so much closer to Zagreb than to Not-Bielefeld. In addition, there are very few products made specifically for the Croatian market. Instead, the packaging tends to be in the original language (usually German) with a sticker slapped on top of it to say (in Croatian) what’s in the product and how to use it. Actually quite the clever idea, but definitely not responsible for the price differences.

Unless, of course, those stickers come from the same factory that Red Bull buys its cardboard from …