I love the shopping experience when I don't have to wait in line because they have enough cashiers and don't have people haggling over $5 at the cashier, if you want their prices go to their store...
As a general rule, anytime an institution [0] has an established reputation for lower prices such that people assume their prices are lower without doing comparisons, this becomes a license to charge higher prices.
[0] this is true beyond just institutions, too; "economy" packs of products frequently sell for higher per-unit costs than packs with fewer units per pack, because enough people assume that the cost is lower and don't do the math.
Assuming the "economy" pack is the only offer you visit a distinct store for and the good is perishable (so that stockpiling doesn't work), then it might be cheaper if you factor in the time you need to reach said store, shop there and get back home into the "cost". The less often you have to go shopping, the more time you save.
That is especially true with cat foods when your cat is a picky eater and only eats certain food from a certain place which is most unfortunately at the other end of the city...
I'm actually referring to same-store, same-time prices when neither the economy nor the smaller pack is specially discounted, so the travel, etc., cost is the same.
Stockpiling/perishability doesn't seem relevant in any way that favors economy packs -- an economy pack is either a larger single sealed pack (in which case, with most perishable goods -- which go bad faster once opened -- is strictly more problematic than stockpiling smaller packages with the same aggregate contents) or is itself an aggregate of smaller packages (in which case, its equivalent to stockpiling smaller packages.)
The only place I can see the convenience issue you raise being a factor is if one store only sells the economy pack and another store sells the smaller pack, and there is a convenience difference between the two stores. Then, there is a premium for the convenience of the store. But that kind of different-store scenario is not what I'm referring to.
I'd like to know the tricks that online stores use. I know that two people can click at the same time and get two significantly different prices on Amazon, for instance.
While demand is always applicable, production costs often dominate in more vertically integrated firms and there are large lags in adjusting to signals.
Like, for example, the current situation with new car prices.