What’s the real price?
(Unit pricing examples and comparisons provided by the Queensland Consumers' Association.)
Tricky packaging and labelling are a big part of how businesses sell products these days, and the tactic can make value-for-money comparisons hard to get your head around. It's not an issue with unpackaged products like meats, seafoods, cheese, and fruit and vegetables, where pricing is based on a clear-cut dollar-per-kilogram approach.
But packaged goods come in a dizzying array of brands, shapes, sizes and colours that aren't designed to make clear how much you're getting per dollar spent.
That's where unit pricing (or price per unit of measure) comes in. It allows you to look past the marketing and make easy comparisons. And guess what? Large supermarkets like Woolies and Coles (or any store of more than 1000 square metres) and online stores have been required to provide the unit price for packaged grocery items since 2009.
The code requires that the unit price must be:
- prominent – it must stand out so that it is easily seen
- in close proximity to the selling price for the grocery item
- legible – it must not be difficult to read
- unambiguous – the information must be accurate and its meaning must be clear.
The 2009 legislation was a big win for consumers, but figuring out and comparing unit prices can still take some doing. And the retailers don't make it easy. Unit prices are supposed to prominent and legible, but they're often not.
Even so, an earlier shopping excursion by the Queensland Consumers' Association (QCA) proved that making the effort to find the unit prices and make the comparisons can really pay off:
- Fresh chillies can cost $125 per kg when bought in a 20g package but only $9 per kg when purchased loose.
- A national brand of cornflakes can cost $1.13 per 100g in a small pack but only $0.38 per 100g in a large pack.
- One brand of paracetamol tablets in a 20-tablet pack can cost 16 cents per tablet but another brand only four cents per tablet.
You don't have to be a maths whiz to figure out that these kinds of price differences can have a major impact on your household grocery costs over the long term.
Sure, you may pick a product with a higher unit price because it tastes, feels, or looks better – or is in a more convenient pack size – but understanding the concept of unit pricing is important if you're keen on getting value for money.
How much can you save?
The QCA reduced the cost of 33 common packaged grocery items by 43% – from $131 to $74 – by buying the brand with the lowest unit price rather than a popular national brand of each item. Most of the items were basic products of identical or similar quality, and in similar sized packs.
In another exercise, the QCA reduced the unit prices of 20 packaged national brand items by an average of 28% by choosing the large rather than the medium size pack.
The lesson? Focus on the unit price, not the selling price – and know where to find it on shelf labels and other price signs.
Ten top tips for how to shop by unit pricing:
Compare the unit prices of different brands of the same product. Differences between brands are often large. And look out for special offers which might temporarily have the lowest unit price.
2. Pack sizes
Look at the unit price of other sizes of a brand and other brands.
- The unit price of large packs is usually much lower than small or medium size packs. But watch out for exceptions and special offers.
- On the other hand, it doesn't make sense to buy bigger packs if there's more than you'll be able to use and there will be waste.
3. Special offers
Compare the unit prices of special offers with the regular price of the same product or with other brands and sizes. You may have to search on the shelf label or price sign for the unit price of the special offer because this information can be hard to find. But it's worth making the comparison because there may be an identical or similar product or another pack size available at an even lower unit price.
4. Loose or prepacked products
If a product is available loose or pre-packaged, check the unit price of both. Often the unit price of the loose product will be much lower than the packaged product, though there can be permanent and temporary exceptions. Products available both loose and pre-packed include meat, fish, cheese, and fruit and vegetables.
5. Elaborate packaging
Compare the unit prices of products in elaborate packaging to those in simpler packaging. Generally, the simpler pack will have the lower unit price. Products available in both elaborate and simple packaging include dried herbs and spices, dried fruit, soft drinks, coffee, and processed fruit.
If a product is available in sub-packs (for example individual portions/servings/sachets within a pack) as well as a just in one pack compare the unit prices of each. The unit price for the product in sub-packs is usually much higher than for the alternative. Products often available in sub-packs or single packs include juices, soft drinks, yoghurt, dried fruit, and breakfast oats.
7. Products in different forms
Check the unit prices of the same product when it is sold in different forms, for example fresh and frozen. The frozen product may have a lower unit price or you may be able to freeze low priced fresh product yourself. Products often available in different forms include chilled/frozen meat and fish, fresh/frozen/canned vegetables, fresh/frozen/canned fruit, and ground coffee or coffee beans.
8. Substitute and alternative products
Look for close substitutes for, and alternatives to, many products. Close substitutes and alternatives are available for many products. So, check out the unit prices of substitute and alternative products as well as those you normally buy. Products that often have close substitutes or alternatives include fruit and vegetables, meat, fish, and cheese.
9. Products in several parts of a store
If a product is sold in more than one part of the supermarket, check the unit prices wherever the product is sold. There can be big differences in unit prices on products sold in different parts of a supermarket. Products often sold in several parts of a supermarket include, meat, fish, cheese, nuts, and fruit and vegetables.
10. Unit prices at different stores
Compare the unit prices of products at different stores. Unit prices can vary greatly between stores so it pays to compare them and give your business to the stores that offers the best value. Unit prices have to be provided in printed advertisements and on internet selling sites. By using this information, and knowing the unit price you normally pay for an item, you can easily make between-store comparisons.
To complain about inadequate unit pricing, or to obtain more information, call the ACCC.