Items/products are usually measured in units, pounds, or ounces, etc. Calculating the unit price is one way on how to save money on groceries and household items. In some cases, stores put the unit price right on the shelves, which can make shopping by unit price a lot easier.
If the store doesn’t list the unit price, you can use an app or unit price calculator to figure out just how much you’re paying per unit for any given item.
The price per item is the stated price on the price tag or shelf sticker. This is the price you’ll typically see in a big, bold font. By contrast, the unit price is the price per pound, ounce, or some other unit of measurement.
For example, think of a regular size bag of potato chips compared to a “family size” bag of the same brand. You will typically see these items side by side in the grocery store.
As you probably expect, the family size bag is more expensive because it contains more product. But is it actually a better deal? Not always. To figure out which bag is a better value, you must calculate the unit price of a product.
To find the unit price for both bags, you need to find a common unit of measurement. Using the potato chips as an example, assume the regular size bag is priced at $1.59 and the family size bag costs $3.69.
Next, look at how many ounces are in each bag. It’s usually easy to find the number of ounces on grocery products, as they’re typically printed right on the package. In this example, let’s say the smaller bag contains 24 ounces and the family size bag contains 45 ounces.
The next step is to divide the item price by number of ounces:
- $1.59 ÷ 24 ounces = $0.07 per ounce
- $3.69 ÷ 45 ounces = $0.08 per ounce
Using this example, you can see that the regular size bag is 1 cent cheaper per ounce, making it a better price than the family size bag.
Unit pricing is especially useful for when looking at supermarket specials. This is because grocery store shelves are stocked with various sizes of the same product, making it hard to tell if buying the bigger bottle or bag will save you money.
When you calculate the unit price of a product, you know exactly how much you’re paying for what’s inside the box, bottle, or bag. Just because there’s more of it doesn’t necessarily mean it’s the most competitively priced option.
How to Calculate Unit Price
To find the unit price, you just divide the item price by the number of units inside. This is usually simple to do in the grocery store, as the majority of products on the shelves are broken down by ounces. However, you may also need to calculate by gallon, pound, or square foot.
For example, what if you need to buy cat food? In most cases, you’ll see pounds listed on pet food bags, as they tend to be heavier products.
Assume one cat food bag contains 20 pounds of kibble and is priced at $13.95. There is also a 15-pound bag that costs $10.69. For this, you just divide the unit price by the poundage.
- $13.96 ÷ 20 pounds = 69.75 cents per pound
- $10.69 ÷ 15 pounds = 71.27 cents per pound
In this example, the smaller bag is actually more expensive per pound of kibble, making the higher priced bag the better buy.
You can do these calculations with a calculator or the calculator app on your smartphone. You can also download apps made specifically for shoppers.
If you have an Android phone, you can try the Unit Price Calculator app or the Unit Price Comparison app for free. Are you an iPhone user, check out the Unit Price Calculator app or the Unit Pricer app. Both apps are free.
Downsides of Unit Prices
Unit pricing has its drawbacks, but the cons are generally due to a lack of uniform standards. Here are four things to watch out for.
Discrepancies in Unit Measurement Standards
Unit pricing can vary from store to store, especially in states that don’t have any rules in place to regulate how stores label their items to reflect the amount of product in the package.
The National Institute of Standards and Technology (NIST) tracks state laws on unit measurements. According to the NIST, just 19 states and two U.S. territories have laws on the books regulating unit pricing, which ensures labeling is consistent from store to store.
This means that more than half of the states don’t regulate how stores label their merchandise to reflect the unit price. In these states, it’s possible that two stores in the same town have different methods of noting measurement sizes for products. This can make it hard to comparison shop by unit price.
Quantity Surcharges
Grocery stores and manufacturers make it their mission to understand consumer behavior. They study shoppers’ habits and purchases in a bid to figure out what people are likely to buy and why they buy one product or package over another.
Studies have shown that people often assume that a bigger package is a better value than its smaller counterpart — even though this isn’t always the case.
Grocery stores and food manufacturers know this about consumers, and they often take advantage of this behavior by imposing a so-called “quantity surcharge.”
This means that the contents of larger packages are priced higher per ounce or other measurement unit compared to smaller packages of the same product.
Not all products are measurable
Not all grocery items are easy to measure in units. This usually happens when manufacturers make things in various sizes.
For example, a roll of paper towels may say “200 sheets” on the package, but you can’t really compare it to a different brand unless each “sheet” is exactly the same size across brands.
You can usually overcome any size discrepancies by checking how many square feet per roll are in a package. You might also encounter this problem with products that are sold in concentrated form.
To use a common example, many laundry detergents are now sold in a concentrated formula to cut down on plastic packaging.
It can be challenging to compare the price per ounce unit to a non-concentrated detergent. One way around this dilemma is to check the label for how many loads each bottle will yield and then calculate the per unit price that way.
Brand Name vs. Generic
Generally, brand names cost more than their generic counterparts. This means a smaller bag of a brand name item might be priced the same or even higher per unit than a large bag of the generic version.
At the same time, a smaller quantity of the brand name product might be a better value than the generic simply due to quality. This will vary depending on what you’re shopping for and how you plan to use the product. Ultimately, it often comes down to consumer choice.
Items Worth Buying at the Unit Price
In many cases, buying in bulk means getting a better deal because you pay less per unit. However, not everything is better just because it’s bigger. This is why it’s always important to check the unit price when you shop.
Good items to purchase in bulk include products with a long shelf life, as well as things you use all the time. For many families, this means paper products and canned and dry goods.
Items Not Worth Buying at the Unit Price
Keep in mind that just because a box or package is bigger or labeled “value size” doesn’t always mean it’s the least expensive option.
Remember that some manufacturers and grocery stores add a quantity surcharge to bigger items. The jumbo size bottle of ketchup might seem like a deal and a convenience, but it might have a higher per unit price than the smaller bottle.
In that case, it makes better financial sense to purchase several smaller bottles rather than going for the bigger option.
Stores That Use Unit Pricing
In most cases, you’ll find unit pricing at all grocery stores. If you’re lucky, your store will even include the unit price right on the labels attached to the shelves.
This makes it easy to save money. It’s also common to see unit pricing at big box stores that have grocery or household supply departments. These stores include places like Target and Walmart.
Savvy shoppers often focus on coupons and bulk shopping as a way to save money on groceries. However, shopping by the unit price is one of the best ways to stretch your dollars at the store.
If you’re not fond of math, check out some of the free apps that make unit shopping easy. Once you get the hang of it, shopping by the unit price isn’t only fun, but will reduce your grocery budget.