Unit prices – are they legible and prominent?

Unit pricing involves showing the price of goods per specified unit of measure e.g. per kg or litre.

What we want

1. Full retailer compliance with the prominence and legibility requirements of the Federal government’s mandatory Industry Code of Conduct, and with all other requirements, including provision, accuracy, and use of correct units of measurement.
2. More public education by retailers and the ACCC to increase consumer awareness and use of unit prices.
3. Consumers who are unhappy with the way supermarkets are displaying unit prices, or any other aspects of unit pricing, to ring the ACCC’s Unit Pricing Hotline on 1300 746 245.

Background

After a long and concerted campaign by the consumer movement for the introduction of mandatory grocery unit pricing, CFA was delighted when, in 2008, the Federal government finally announced that it would be introduced nationally. This was a great victory for consumers because for years most supermarkets vigorously opposed voluntary or compulsory unit pricing. The new laws took effect on 1 December 2009. They require all supermarkets, with a floor space of more than 1000 square metres, to display the unit price (price per unit of measure) of almost all the packaged grocery products sold.

Trade measurement legislation already required that the unit price be shown for grocery products sold loose by measure or in random weight non-rigid pre-packs (for example, meat, and fruit and vegetables).  The new code therefore applies mainly to grocery products in constant measure packages (for example, breakfast cereals, jam, milk, and toilet paper).

Unit prices, displayed in addition to selling prices, help consumers compare the value of products by package size, brand, and type of packaging (including unpackaged).  They also facilitate comparison of substitute products and help consumers spot sneaky price increases resulting from reductions in package sizes.

Unfortunately, the government’s system has a number of serious flaws.  For example, the regulator – the Australian Competition and Consumer Commission (ACCC) – must decide what constitutes “prominent” and “legible” presentation of unit prices.
The ACCC guidelines say “prominent” means  it must stand out so that it is easily seen and “legible” means it must not be difficult to read. The problem with this approach is that it is open to wide and possibly subjective interpretation.
In our view, in most supermarkets unit prices are not prominent.

And, in some supermarkets, too many unit prices are difficult or impossible to read.

Our concerns have been confirmed by the results of a national survey conducted in November 2011 of almost 1000 consumers commissioned by CFA members, the Queensland Consumers Association and CHOICE.

The survey found that around 60% of the shoppers at the 2 dominant supermarket chains would find unit pricing more helpful if the print size was bigger and the unit prices stood out more.

The causes of inadequate legibility include: print being too small and/or not dense enough; obscuring by label holders; inadequate background contrast; and badly angled labels. These, and other, flaws, including inappropriate units of measure for some products, reduce consumer awareness and use of unit pricing.

Unless, consumers can easily NOTICE, READ and USE unit prices, the system will not fully achieve its great potential to save consumers money and time and increase competition between manufacturers and between supermarkets.
Supermarkets ensure that consumers can easily notice and read ALL selling prices.  They can easily, and should, do the same with ALL unit prices.

Action is required by the ACCC to obtain full compliance with the Code’s prominence and legibility requirements, and with all other requirements (provision, accuracy, units of measurement, etc).

The survey also revealed that although 80% of respondents were using unit prices and many found them very helpful, almost 30% of shoppers were either unaware of unit prices, did not use them, or found them only slightly helpful.  But almost half of these shoppers would find them more useful if there was more education about what unit prices are and how to use them.

So it is clear that supermarkets and the ACCC need to provide more and better information designed  to increase consumer awareness and use of unit prices.

The reasons why this is essential include:

• Extremely limited, and in some cases no, consumer education by most supermarkets and the ACCC – a new concept such as unit pricing which can be used in many ways and can deliver major benefits to consumers needs, and deserves, a major, coordinated and comprehensive consumer education program.
• For many months prior to 1 December 2009, the two major supermarket chains did not provide unit prices for all grocery products– this discouraged consumers from using unit prices.
• As indicated above, many unit prices are not easy for consumers to notice (not sufficiently prominent) and many are difficult or impossible to read (not sufficiently legible) – which makes it more difficult for consumers to be aware that unit prices are provided.

Changes to the amount and quality of information for consumers about unit pricing should include increasing awareness that unit prices can be used for more than just comparisons between package sizes within and between brands (for example, boxes of corn flakes) – other important possible uses include comparing packaged with unpackaged and packaged products (for example, loose and vacuum packaged bacon), packaging types (for example, cheese in re-sealable and non re-sealable packages, different forms of a product (for example canned versus frozen corn kernels) and substitute products (for example, long grain and jasmine rice).

Anyone dissatisfied with how supermarkets display unit prices, or any other aspects of unit pricing, or wanting more information, should ring the ACCC’s Unit Pricing Hotline 1300 746 245.

A report on unit pricing in the USA and Europe prepared by Ian Jarratt, a member of the Queensland Consumers Association, is available on the Churchill Trust website.