Unit pricing — the requirement that supermarkets display an indication of how much a product costs in a fixed quantity — makes comparison shopping much easier. However, while savvy consumers are aware of the existence of unit pricing, a recent study suggests that we don’t use that information as often as we think and that we’re easily distracted by specials, even if those products are actually more expensive.
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Unit pricing was made compulsory in Australia in December 2009 after a phased campaign that began earlier that year. Incidentally, there seems to a widespread belief that this was done in response to ALDI including unit pricing on its shelves from 2008. That explanation ignores the fact that ALDI already had to comply with unit pricing in other European markets and simply brought the same systems into Australia at a time when the issue was already being debated by retailers. The other major supermarkets also introduced unit pricing well ahead of the December 2009 cut-off.
Regardless, unit pricing makes it much easier to directly compare items in different sizes without resorting to mental arithmetic or pulling out a calculator app. The system isn’t perfect by any means — sometimes the data isn’t included on specials tags and the measurement units used don’t always seem consistent or logical. Nonetheless, if you want to make sure you’re getting the cheapest item in a given category, unit pricing remains your friend. But do we use it as cleverly as we think?
How We Kid Ourselves
At The Conversation, University of South Australia academic Svetlana Bogomolova outlines a study she conducted in conjunction with Professor Jordan Louviere from the University of Technology Sydney into how Australians actually interpret unit pricing labels. A panel of 402 Australians was shown 16 sets of three products, complete with shelf pricing information. Half those sets included unit pricing information; the other half didn’t.
For each set, the research asked which they would be most and least likely to buy. The sets included a mixture of house brands and others, and participants were asked to indicate whether they actually purchased any of the brands in real life. Participants were subsequently asked about their awareness of unit pricing and their preferred approaches to saving money on grocery shopping. Here’s a sample of the information participants saw (this one including unit pricing which clearly indicates that the ‘on special’ item still costs more):
The slightly surprising outcome of the study was that there was no difference in the selections made between people who were shown unit pricing information and people who did not. That lack of difference couldn’t be solely accounted for by people choosing brands regardless of unit pricing, since participants were asked if they had seen unit pricing information after making their choices. Almost a third (31 per cent) of those who had been shown unit pricing couldn’t recall seeing it. Even more remarkably, 45 per cent of those who didn’t see unit pricing actually thought they did, and almost-thirds of that mistaken group said they had factored unit pricing into their decision.
Let’s make that crystal clear: some shoppers believed they had considered unit pricing information which wasn’t actually provided. As Bogomolova puts it:
The bad news is that consumers largely overestimate how much they use the unit price information when making grocery choices. This is because of their generally poor ability to notice and recall their own behaviour, especially when the activity is as mundane as grocery shopping.
Consumer rankings of how they preferred to save money in the study also reaffirm that we don’t always make wise choices when it comes to saving. The most popular choice as a money-saving method was buying products on special, followed by comparing unit prices. The least popular choices were buying house brand goods or purchasing in bulk. However, both those methods do provide the most consistent savings, a point we’ve made many times before and which was reinforced in my recent Mastercheap experiment. (We do seem to have taken up that lesson when it comes to eggs and milk.)
It’s often argued that unit pricing information isn’t displayed prominently enough to be widely used, and that making it larger on shelf signs would increase its utility. I wouldn’t argue against that, but no matter how big that text gets, you can bet the ‘Special’ tags will be larger. Either way, using unit pricing is a sensible strategy when shopping, so don’t be distracted by the flashier sale signs and take the time to check those details.
Unit pricing is smart shopping practice, but do consumers care? [The Conversation]