New global update on unit pricing newsletter released by consumer group

A new issue of the Unit Pricing Global Update, a newsletter prepared six monthly by the Queensland Consumers Association, has been released and is available here.

It contains short items about unit pricing in, or research on it for, Australia, New Zealand, USA, Japan, and the European Union.

The section on Australia includes the results of the Association’s recent investigations into differences in the unit price of several pre-packaged grocery items and the impact on potential unit price savings of assumed consumer preferences for brand (national and supermarket own), pack size (large and medium) and packaging type (individual serves and regular).

For brand and pack size preferences, three types of unit price comparisons were examined (pack size only within brand, brand only within pack size, and both pack size and brand) for seven homogenous pre-packaged products (butter, flour, sugar, rice, cheese, milk, and olive oil) in similar types of packaging. Homogeneous products were chosen to reduce the influence of quality differences. Only regular prices (not special offers) were used.

The range in unit price savings possible within each type of comparison was very large between items. For example, when comparing pack sizes within brand the range for the national brands was 4% to 42% (average 20%) and 0% to 34% (average 14%) for the supermarket’s own brand.

Interestingly, the unit prices for different pack sizes of two items were equal and very small (2% and 4%) for two other products. This illustrates why using rules of thumb (heuristics) for product choice is less effective for achieving savings than comparing unit prices.

Regarding between brand differences in unit price for the same pack size, the unit price of the supermarket’s own brand was always substantially lower than the national brand’s. The range was 23% to 67%, and the average was 37%.

When it was assumed that the consumer was indifferent to pack size and brand and would choose the lowest unit priced item the % differences between the highest and lowest unit prices (the maximum potential savings) were very high (the range was 38% to 70% and the average was 52%).

For packaging type preferences, only one type of comparison was examined individual serves/portions and regular packs within a brand for nine grocery items (soft drinks/juices, breakfast oats, powdered drinking chocolate, yoghurt, cheese and chickpeas). The unit price of all the individual serves was much higher than the regular pack and the potential unit price savings from buying the regular packs were very high (the range was from 28% to 75% and the average was 53%).

The newsletter is prepared to help increase global interest in unit pricing and to facilitate information sharing. It is distributed to people around the world interested in unit pricing

Queensland Consumers Association