I have noticed that, at least at my supermarket, the large economy size is often not the cheapest on a per-unit basis. Instead, the middle size is often the best deal.
Many people, I suspect, don’t pay careful attention to the unit prices. They just assume that the biggest is the cheapest. And the supermarkets exploit this behavior by charging more for the largest sizes. The fact that large sizes are usually on the bottom shelf, and their unit prices are below the bottom shelf, just inches off the floor, eases the deception.
Anyway, that’s my theory. Can anyone who has worked in the grocery industry confirm or refute this?
I don’t know the answer to your question, but in addition to unit price, you need to look at how much active ingredient there is.
One gallon of laundry detergent may be at acheaper unit price than a half gallon, but if the later is a concentrate, it may need half as much to get your clothes clean.
Thanks, N9IWP, but I’m talking about identical products in different sizes: 16 ounces of corn flakes for $2.29 or 24 ounces for $3.89; one can of Pringles for 99 cents or a two-pack for $2.19. (Real examples)
It also depends on competition with neighbouring supermarkets…and manufacturing / bottling procedures.
A 2-litre bottle of coke is often cheaper than the 1 litre. (due to its overwhelming popularity)
The cost of 4 litres of milk recently dropped to less than 1 litre of milk in my local due to price wars with another supermarket.
(That got a bit silly.)
Cafferys (Beer) 8-pack was over a £1 more expensive than buying 8 single cans last week (in my local Tescos).
My WAG is supermarkets will charge what people will buy. If you don’t look at the price, you deserve to get ripped off.
Although Tescos do post a “cost per <amount>” on items , so it is easier to see the real costs in relative terms.
Here in northern California, I have found that at the two largest supermarket chains, it is less expensive on a per-unit basis for bulk (economy size) items in almost every case.
The two exceptions are “two for one” items and “regular” sale items.
I buy Candy for clients, for our hotel, and have found that a LOT of times Marshal Fields and Fannie Mae will charge LESS for 1/2 pound or a quarter of pound then a pound of candy.
It also pays (pun intended) to actually compare the weights of products when it appears two or more varieties look like they come in the same sized box.
Case in point.
We recently bought several boxes of Wheat Thins (Nabisco brand). They’ve now come out with Wheat Thins Lite. The price is substantially higher when looking at the unit price if you take the time to look.
The real sneaky part is both varieties come in the same sized box, but the weights are significantly different.
My local supermarket also lists price per amount, and I’ve noticed some mid-sized items cheaper than the large size even with these tags. Last weekend I found it was cheaper to buy two 1-lb boxes of spaghetti than one 2-lb box, and dish soap was also cheaper per unit in the mid-sized box.
The answer, as with so many economics questions, is “what the market will bear”. If people are willing to pay a buck fifty for a liter bottle of pop, instead of a dollar for the two-liter bottle, then of course the supermarket is willing to accomodate them. Similarly, if people are willing to pay a premium for toilet paper in the 8-roll pack, then the store will charge them a premium.
Be careful of those unit prices, by the way: They’re not always the same unit. I once saw two adjacent displays of eggs, where for one the unit was “per egg”, and for the other, it was “per carton”. Though I’m not sure what the point is of a unit price per carton.
It may be an attempt to fool unobservant shoppers, but there might be some legitimacy to charging more. If somebody uses a lot of the stuff, which might be most people in a given market (affluent suburban), they might be willing to pay more for the convenience of handling a single container, instead of having to lug 2 or 3. (Personally, I am not.) Charging a higher price to people who use less and probably don’t have as much space to store it might backfire. WAG.
This also goes for soda prices, at least around here. 2 liter bottles at the supermarket or drug store frequently cost less than a 20 oz bottle in the same store. But since the $0.99 2 liter is sold warm, and the $1.25 20 oz is sold cold, they are in a sense different products as they fill different needs. The 20 oz one is being sold to people who want a drink now. The two liter is being sold to people who want to stock their pantry.
