McDonald's has been criticised for planned price increases that mean customers in poorer areas will pay more for fast food meals than those in wealthier localities.
The media reported on Thursday that the cost of menu items was previously determined by restaurant overheads, but McDonald's will now use socio-economic factors. McDonald's countered by saying its new demand-based pricing system is simply a matter of giving the customer what he or she wants.
'We really let the customer speak,' CEO Catriona Noble told radio 2GB. 'And that's exactly what customers have the right to do. [They can say] "hey, that price increase is too much for me to handle and I'm going to come to you less often".'
It could indeed be true that customers in lower socio-economic areas are more prepared to tolerate higher fast-food prices than those in wealthier locations. But that is not an excuse for McDonald's to increase prices, and claim the moral high ground at the same time. As South Australian Consumer Affairs Minister Gail Gago pointed out last week, while it is not against the law for outlets to charge different prices, it's not fair either.
Unfortunately McDonald's is not alone in its 'demand-based' pricing policy. Last May, the Southern Sydney Retailers Association (SSRA) discovered that a basket of 28 grocery items was 134 per cent more expensive at Woolworths Greystanes than Woolworths Fairfield.
SSRA president Craig Kelly said: 'It is simply about a lack of competition — at Fairfield, Woolworths has a small independent shopping centre directly opposite them and that keeps them honest in terms of price, but at Greystanes the independents have disappeared and that has allowed Woolies to pump up their prices.'
It's a matter of record that Woolworths and Coles do all they can to suppress competition. The German-owned grocery chain Aldi complained to the ACCC last year that the supermarket giants are using shopping centre lease agreements to prevent Aldi from setting up shop. The covenants require huge rental reductions if a competitor is allowed space in the premises.
Aldi's prices are one third lower than those of its larger competitors. But it has also led the way with a uniform pricing policy for all its 200 Australian stores. Its research discovered that 83 per cent of customers were unhappy with the variation in supermarket prices between suburbs.
The Federal Government is aware of unfair pricing policies, but has so far proved unable to make a difference.