Banana Arbitrage

Photo: jetheriot

Bananas are a popular topic on this blog. In February, a reader wrote in with this odd banana stand pricing phenomenon. And in 2008, Dubner explored the potentially tenuous economics of the far-flung fruit.

I’ve recently run across something similar to the banana stand case: the Starbucks closest to my apartment now sells bananas at the counter for $1 each, while right outside the door, a fruit stand sells them for 25 cents each, or 5 for $1. And the fruit stand bananas are always better looking than the ones at the Starbucks register.

Now, I can’t say I’ve ever seen anyone buy one of the Starbucks bananas. I certainly try to watch when I’m in there, but for a store as carefully orchestrated as Starbucks, I can’t imagine that they would waste counter space on a product that doesn’t sell. Though maybe with the huge margin they presumably get on each banana, they have to sell just one or two to justify it.

So, ideas for banana arbitrage, anyone? Also, what other examples can you think of where huge price discrepancies for the same product exist in such close proximity?

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  1. MilesC says:

    I have wondered about this, too, with Walmart Fruit & Vegetable Dept
    The company removes fruit, such as bananas, before the fruit should be
    Even stranger, I wonder why the pulled bananas(or any fruit) are not put on sale before they are trashed (you cannot sell the items to “oversupply” companies, such as dollar stores, since there is not enough time)
    Actually, one section of say, bananas, would not even have to be put on sale, because for most of us, they are just right — Have one section “just right” fruit and another side “Not ripe” side

    Look forward to an answer to this

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    • James says:

      Maybe because most people who shop at WalMart (or any other grocery store, really) aren’t buying just one banana to eat right away, they are buying a bunch to take home and use over a week or so. So the “perfectly ripe” fruit in the store may well be going past ripe by the time you get it home, and certainly by the time you want to slice it for your cereal at breakfast the next day.

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  2. Scott from Ohio says:

    They need to keep bananas around for the smoothies. And since they have to take up space somewhere, they might as well be out front where they can earn a buck or two.

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  3. caleb b says:

    Jock itch products vs foot fungus products. They are the EXACT same, typically right next to each other, but Jock itch spray costs much more per unit.

    Walgreens website:
    Tinactin Antifungal Cream – “Cures Most Athlete’s Foot” – $12.99 – 1 oz.
    Tinactin Antifungal Cream – “Cures Most Jock Itch” – $9.99 – 0.5 oz = $19.98 per oz

    The back of each shows the exact same ingredients.

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  4. Tracy says:

    Happens every day at your local bar.

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  5. flaxen curls says:

    If you buy a small milk at the grocery store deli, it is often more expensive than the exact same milk if you take it from the dairy section!

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  6. Steve Bennett says:

    I’m so jealous that your readers consider $1 a “crazy inflated price” for a banana. Ever since cyclone Yassi last year, bananas here in Australia have been anything up to $16/kg (something like $2 each, depending on the size) – and that’s at supermarkets! 25c each would be a dream…

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  7. Phil says:

    The Starbucks banana includes the right to consume it inside the store.

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    • Chrisfs says:

      Who’s going to check to see if you bought it there? The Starbucks banana benefits from impulse buys where the stand banana does not.

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  8. Sbard says:

    The fruit stand guy probably doesn’t take credit cards while Starbucks does.

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