Food
Unit pricing
Introduction
Buying bigger packs and heading for the bulk bins at the supermarket is not always the way to save money on groceries.
Supermarkets don't make it easy to compare prices between pack sizes. Unit pricing - displaying the price of goods per unit of measurement - would make comparisons much easier.
We find out what the major supermarkets are doing about unit pricing, and ask our members about their experiences.
Small can be cheaper
In our recent supermarket basics survey we found that smaller packs were sometimes a better deal than the large "economy" size. So we decided to look further. We asked members for their own experiences and we went out shopping.
Sometimes smaller packs work out cheaper than the "economy" size if they're on special. But we found examples of products that weren't advertised as discounts where you could make a real saving by buying the smaller pack.
More than 60 of our members also told us how they made savings by comparing pack sizes. Here are some of their tips:
- "I saved about 80 cents by buying two 1.5 kg bags of sugar instead of one 3kg bag."
- "It was cheaper to buy 4 single tins of sardines than the 4-tin pack."
- "We have found loose prunes at a $15 per kg, but pre-packed on the shelf (cleaner and better-tasting as well) the normal price per kg is about $10."
- "Toilet rolls are often cheaper in the 8-pack sizes than in the 12 or 16 packs."
- "Disposable nappies are cheaper to buy in the small plastic-wrapped packs (as those are often on special offer) than it is to buy a bulk box at the same supermarket."
- "Toothpaste in the small tubes is usually cheaper per gram than the cheaper looking large tubes."
Tricks of the trade
Manufacturers and supermarkets certainly don't make it easy for you to compare prices. Here are some of the difficulties we encountered:
Bulk bins
These are often placed well away from the packaged groceries - so it's hard to make comparisons.
Price increases
Price increases can be disguised by reducing the pack size while keeping the same price. In August a 350g pack of Milo cost $4.49. Three weeks later a 310g pack at the same store cost the same - $4.49.
Odd pack sizes
Pack sizes can make comparisons difficult.
It's easy to work out that it's better to buy 50 Dilmah tea bags at $3.54 than to pay $7.19 for the 100-bag pack. Or that two 100g packs of Nescafé ($5.49 each) cost less than one 200g pack ($11.49).
But it's harder to do the mental arithmetic on whether Weet-Bix is cheaper in the 750g or the 1kg pack. And you'd need to take along a calculator to find out whether the 500g block of cheese on special is a better deal than the 700g block.
Unit pricing here
Most of us don't have time to do the arithmetic and don't normally take a calculator to the supermarket. That's where unit prices on shelf labels come in.
Unit pricing means displaying the price of goods per unit of measure - per 100g or per litre, for example. This makes it easy to compare the price of products that come in packs of different sizes.
So what are the major supermarkets doing about unit pricing?
New World and Pak'n Save stores don't show unit prices on their shelf labels. Melissa Hodd, executive manager of Foodstuffs New Zealand which controls these stores, says the company is watching developments in Australia. Unit pricing may become compulsory there - and Foodstuffs is interested in whether it's effective and meets shoppers' needs.
The company has no immediate plans to introduce unit pricing: it sees significant compliance costs. Although they're owner-operated, individual New World and Pak'n Save stores can't introduce unit pricing because they use Foodstuffs' integrated computer-pricing system.
June 2009 update: Foodstuffs is to introduce unit pricing in 2010. Read more in our news item.
Woolworths, Foodtown and Countdown have displayed unit prices in some stores on thousands of lines for more than 10 years, says Bill Moore of Progressive Enterprises (which operates these supermarkets). The company is working towards unit pricing in all its stores, but can't confirm if it will be available on Woolworths Online.
This at least is a start. But Progressive could do more. Not all its stores use the same print size for their unit-pricing labels and Countdown's is particularly small.
Pricing accuracy
Pricing accuracy is also vital. Unit-pricing campaigner Ian Jarratt says he's found discrepancies and errors in the unit prices of some Progressive supermarkets in Christchurch that he's brought to the attention of Progressive and the Commerce Commission.
The Commission has sent a "compliance advice" letter to Progressive and has recommended that Progressive review its internal systems to ensure all unit pricing is accurate.
Progressive says it has identified a system error in recently introduced software and corrected the matter.
Global trend
In the European Union all but the smallest shops must give unit prices for all their pre-packaged goods. And several states in the US have mandatory unit pricing.
In July 2008 the Australian Competition and Consumer Commission (ACCC) published a report recommending a mandatory unit-pricing regime for standard grocery items - both on instore price labels and in print advertising. The Australian government is considering the best way to introduce such a scheme.
There are many issues to consider: which items would be included; which stores (how big? what type?) would have to use it; what measurements would be used (per kg or per 100g? per litre or per 100ml?). And what about toilet paper and kitchen towels? As well, the formatting of the labels would need to be specified. Information isn't much use if you can't read it.
Two Australian discount supermarket chains, Aldi and Franklins, have already introduced unit-pricing schemes. Woolworths Australia is running a unit-pricing trial and says it intends to roll out the system to all its supermarkets.
Our view
- In times of rising food prices consumers need all the help they can get. Displaying unit prices saves shoppers time and money.
- Foodstuffs should introduce a unit-pricing scheme.
- We applaud the efforts of Woolworths, Foodtown and Countdown. But there's room for improvement. We'd like to see the unit price displayed in all stores and in a readable print size. And what's the problem with displaying unit prices at Woolworths Online?
More from consumer.org.nz
Report by Bev Frederikson