It helps you save at the grocery store — so why isn’t unit pricing mandatory?
Cost of Living6:14If you want to save money on food, read the fine print!
One of the best ways to compare prices at the grocery store is to look at the unit price. It’s that teeny, tiny price in the corner of the label that tells you how much something costs per gram or litre. However, unlike some other countries, stores aren’t required to display the unit price in every part of Canada. Jennifer Keene explains why.
Jennifer Cypher comes from a long line of penny-pinchers and used to bring along a calculator when grocery shopping with her university roommates.
These days she’s still a careful shopper — but she uses a lesser-known tool to stretch her dollar and track her spending: unit pricing.
“I like to comparison shop, and I like to get value for my money,” she said from Toronto. “I noticed that there was unit pricing, and I started using that as a way to make choices in the grocery store.”
Many Canadian stores share the price per 100 grams or 100 millilitres below the retail price of the product, for example, but unit pricing is only mandatory in Quebec. In the U.S., at least 21 states offer unit pricing, with 11 of them mandated to do it by law.
In the most basic of terms, unit pricing is the price per standard unit of measurement; it allows for easier price comparisons among similar products in different size containers. That way, you can see whether the best buy is the 2.5-litre bottle of cleaner or the 1.5-litre bottle.
“It’s a wonderful, powerful tool to help consumers — and also to promote competition and get better economic results generally — because it provides consumers with information that empowers them to make better informed decisions,” retired economist Ian Jarratt told The Cost of Living.
No national standards
Jarratt, who is with the Queensland Consumers Association, has been advocating for unit pricing in his home country of Australia for two decades.
“There are very big differences in the unit price between products and between brands — between pack sizes, between packaged and unpackaged, between special offers and regular prices, between products that have got a high level of convenience attached to them,” he said.
But since there are presently no real standards as to how the unit price is displayed in Canada, it’s not always presented in a very consumer-friendly way here, said Jay Jackson, director of policy and strategy for the Consumers Council of Canada.
Read the small print
The council did a study in 2019* that found 91 per cent of respondents believe that everyone should have access to a unit price label — and 96 per cent find a unit price very useful.
That said, it’s often in small print on the price tag stuck to the store shelf.
“Some of our focus groups were saying, ‘First of all, you need to bend over really low to see it. You need a magnifying glass,'” Jackson said. “It gives the impression that the retailer really doesn’t want you to see it and makes you wonder why they put it on at all.”
If a retailer has unit pricing for some products but not for all, it’s a red flag for Cypher when she’s shopping.
“Sometimes I’m suspicious that they are doing that on purpose as a way to try and get you to not know what the prices are.”
Stores that include it seen favourably
Jarratt doesn’t understand why all retailers wouldn’t want to include it — and let their customers know they do.
“Consumers do look favourably on retailers who provide effective unit pricing,” he said. “And they’re more likely to keep on using the store.”
And people might look at unit pricing and buy the more expensive one anyway, he said, especially if they see that the difference isn’t actually that great.
But for those focused on the bottom line, you can’t beat it.
“It’s important, especially for consumers on low incomes, to be able to know what the lowest price is,” Jackson said. “Brand may not necessarily be that important to them, but price is. And not just low-income consumers — all consumers, given the way price increases have happened lately.”
A tool to deal with ‘shrinkflation’
Unit pricing can also be useful for dealing with so-called “shrinkflation”— where a company reduces the size of a package by quantity or volume but leaves the price the same.
Jarratt said if you ask people what the size of their box of cereal is, most probably won’t know off the top of their head.
“People don’t focus very much on the quantity, but they do focus on price,” he said.
Cypher agrees.
“I do a lot of grocery shopping,” she said. “I will put an order together online, so I find it really helpful to be able to figure out how much things are in terms of the size that they are.”
In Canada, the decision whether to make unit pricing mandatory falls to each province. Decisions would have to be made about what standards to follow, though guidance has already been developed.
Loblaw, which voluntarily offers unit pricing nationally, told CBC News by email that it is “part of our commitment to helping customers make financially informed choices when purchasing products.”
Karl Littler, senior vice-president of public affairs for the Retail Council of Canada, said price is one factor people consider. But they also buy based on how many units are in a package, how much storage space they have and how much they are going to use before the next time they shop — among other things.
And he said that manufacturers already do a lot of testing to see what size packages consumers prefer.
While Littler said he can see the usefulness of unit pricing, “not everything that is appealing is necessarily mandated into law.”
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However, New Zealand does want to make it law, and it is currently consulting on how to bring in mandatory unit pricing.
Australia is also looking at ways to expand its current unit pricing practices to the level offered in parts of Europe, where it can be found in pharmacies, hardware stores, pet shops — as well as grocers.
“I think it’s hugely beneficial for consumers,” Jarratt said. “We live in an information age. Why aren’t we providing consumers with [a] more vital piece of information to help them make more informed choices?”
* Information for the study was gathered through an online quantitative survey by Environics Research Group, which included results from 2,000 respondents in both English and French. The sample was designed to be representative of Canada’s general population, aged 18 and up, based on age, gender and region from the 2016 census.