THE cost of convenience fluctuates wildly across Sydney - the price of bread and milk commonly varying by more than 30 per cent.

A survey by The Daily Telegraph has found that depending on which corner you walk to, customers can pay anywhere from $3.20 to $5.25 for identical 2L bottles of milk.

And anyone so desperate for a dairy fix that they buy it at Sydney Airport will be up for $6.95 - 117 per cent more than at Renown Minimart, Casula, and 85 per cent higher than the price at Andrews Corner Store, St Marys, which both charge less than the big supermarkets.

"We always try to undercut the supermarket. You lose on some items to get the patronage," Andrews Corner Store co-owner Harry Papazoglou said.

At Quix Penrith, which charges $5.25 for two litres, manager Chris Malone said: "I have nothing to do with the price. Head office tell us what price to put up and that's what we do."

One possible explanation for the significant discrepancies between prices is that owners know customers will pay, whatever the cost.

A submission to the 2008 ACCC Grocery Prices Inquiry by the Motor Trades Association of Queensland, whose members operate convenience stores at their service stations, said items purchased "may be categorised as discretionary expenditure which is either impulse buying or convenience buying.

"The products bought are not price sensitive but price in elastic". In other words, raising the price does not have an effect on the volume of sales. MTA Qld also said that margins on convenience store items were typically 27-30 per cent.

Business analysts IbisWorld estimated convenience stores turned over a combined $6.4 billion in 2008 - more than $300 for every Australian. Revenue was growing at 4.4 per cent a year.

Cigarettes account for about a third of all sales, drinks another 15 per cent.

Milk represented less than 7 per cent of turnover and bread 1.4 per cent.

This may explain why some stores are willing to cut the price on these items - they represent only a small slice of sales.

Originally published as The great convenience shop rip-off