Results of UK Research on Grocery Unit Pricing Released

The results of recent research on grocery unit pricing (pricing per standardised unit of measurement) in the United Kingdom have been released by Competition and Markets Authority.

The research involved:

  • Qualitative research with consumers to better understand how and when shoppers make use of unit pricing information.
  • Analysis of the unit prices of a basket of grocery products to assess the extent to which the unit prices of grocery products vary according to their size and packaging and, the extent to which unit pricing information can help people identify savings when grocery shopping.

The Queensland Consumers Association says that many of the results are very relevant to grocery unit pricing in Australia including that:

  • Understanding and use of unit pricing varied greatly.
  • The term ‘unit pricing’ was not generally recognised but most were familiar with the concept of comparing prices based on unit measurements.
  • Although indicative rather than representative, around half of the shoppers that took part in the research used unit pricing (to varying degrees) and half did not.
  • The shoppers that used unit pricing found it a helpful tool to compare the prices of different products and get value for money.
  • Unit pricing information is competing for a shopper’s attention with a lot of other information, such as promotions and special offers that grocery retailers display prominently across their stores.
  • Unlike promotions and special offers, unit pricing is not displayed in a way to catch a shopper’s attention, and some shoppers that took part in the research said that the way in which it is displayed can act as a barrier to use. Some shoppers described unit pricing as too discreet, for example due to small font size, faint colours, and placement of the information, making it easy to overlook when shopping in store or scrolling online to select items.
  • Shoppers that used unit pricing did not use it for all products.
  • Shoppers most commonly used unit pricing when: comparing the same product in different formats, making substantial purchases, helping to select a product when overwhelmed by choice, verifying supermarket deals, shopping for new or infrequently purchased products, when a product they buy regularly looks different, and buying in bulk
  • Different units of measurements across similar products acted as a barrier to the use of unit pricing information.
  • Shoppers that took part in the research were observed to use unit pricing more when shopping in-store. Online shoppers were seen to rely on features such as favourites lists or previously bought items and spent less time comparing the cost of items.
  • Some shoppers relied on assumptions or ‘rules of thumb’ when deciding which products are the best value.  Examples included assuming that bigger pack sizes are always better value for money than smaller pack sizes and that products on promotion offer greater value than products which are not. The analysis found that rules of thumb do not always hold true and relying on such assumptions in isolation could sometimes lead to shoppers paying more per unit.

The CMA’s conclusions from the research included that:

  • Unit pricing can be a useful tool for shoppers so that they can easily compare products and identify which offer them the best value.
  • Many grocery products are offered in a wide range of sizes and formats. While it might be relatively easy to compare some options (such as a twin pack of tins with an equivalent single tin), sometimes the sizes are not easy to compare, for example because their sizes are not simple multiples, pack sizes differ between brands, or because there are promotions on some options but not on others.
  • Unit pricing can help shoppers identify savings on their grocery shopping by showing them which option is the cheapest per unit within a range of products when this is not easy to work out by comparing the selling prices alone.  For example, when:
    • Comparing loose to prepacked fruit and vegetables
    • There is a lot of variation in pack and/ or content sizes within or across brands, such as with toilet rolls
    • Pack sizes are not simple multiples of each other, such as for tinned baked beans and chopped tomatoes, cheddar cheese, and fish fingers, as opposed to items that come in more standardised packaging such as pasta and rice
    • There is a mixture of pack sizes and promotions
  • Some shoppers already find unit pricing helpful. However, there is scope for more shoppers to use unit pricing, and also for those shoppers who do use it, to use it more regularly.
  • Shoppers’ commonly held assumptions about what products are cheapest on a per unit basis aren’t always right and that the pricing of some products relative to others can be surprising.
  • Factors affect shoppers’ ability and willingness to use unit pricing. For example, their weekly budget may not be able to stretch to a bigger pack size or they may have very limited storage space at home. Likewise, it can sometimes be difficult to devote attention to comparing unit pricing – for example when we are tired after a day at work or when shopping with children. However, unit pricing can be an important tool for shoppers to ensure they get the best deal when comparing products.