Tue Jun 28

Unit pricing saves money but is the forgotten shopping tool

Written by Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of Technology

Using unit pricing is the best way for shoppers to save money on grocery shopping, new QUT research has demonstrated.

Our soon-to-be-published findings suggest a family of four could save up to 18% or $1700 a year on their weekly grocery shop by using this simple, often-overlooked tool to find the best value-for-money buys.

Read the fine print

The unit price of a grocery product refers to the retail price expressed in terms of some standard unit of measurement (for instance, per 100 grams). This tool can help consumers easily compare prices without needing to calculate price differences across similar products sold in packages of varying size.

Consumer advocacy groups have lobbied retailers to display unit prices on labels of pre-packaged grocery products to help shoppers make more informed purchase decisions and in a number of countries this is now mandated.

The argument is simple: it can save you money.

But the literature suggests a large proportion of shoppers simply do not understand it, use it or even see it. Research by Svetlana Bogomolova and Jordan Louviere found 45% of participants who were not shown the unit pricing reported seeing it, and of those, 63% claimed that they used (the non-existent) unit price information.

Out in the field

So we conducted a first ever field experiment with 400 shoppers across Australia. Participants were simply told they would be participating in a grocery shopping study and unit pricing was not initially mentioned.

Shoppers were asked to provide two weeks of shopping receipts, which formed a “baseline” average spend. Shoppers were encouraged to go about their weekly grocery shopping as normal and send in their receipts each week for 25 weeks.

Shoppers were randomly split into three groups; the control group received no information, the second group received five exposures to unit price education each week for the first five weeks and the third group received the same five exposures to unit price education, but fortnightly for the first ten weeks. Results demonstrated once shoppers were educated about unit pricing, they began saving money immediately.

How much do shoppers save by using the unit price?

The group that received unit price information each week for the first five weeks saved 18% of their average grocery shop by week six, which settled back to 13% by the end of the study.

Shoppers who received unit pricing information every fortnight for ten weeks attained a 17% saving by week six, then returned to a consistent 11% a weekly saving.

As expected, the group which received no information had no significant change in cost of their weekly shop. Galaxy Research found that on average an Australian family of four spend almost $185 on their weekly grocery shop.

Author provided So why do shoppers ignore the unit price? This research suggests that shoppers have simply forgotten about the unit price printed on shelf label. Albeit from some initial educational campaigns during the launch of unit pricing in Australia, there are been little else done to draw attention to this important piece of information. The results of this study demonstrate shoppers almost immediately changed their purchase behaviour, reaching substantial savings by about the sixth week, with average savings of between 11% - 13%. Changing consumer behaviour is a two step process called sensitization and habituation. Sensitisation refers to the behavioural response displayed by a person as a result of repeated exposure to a stimulus. For example, when a shopper is first made aware of unit pricing, it is likely that they will pay attention and possibly incorporate it into their shopping. However, usually following sensitisation, a consumers’ response to the stimulus might briefly stabilise, then decline as they begin to habituate; that is they slowly stop paying attention. Habituation refers to the tendency for behavioural responses to decrease as a result of repeated exposure. For example, the shopper who is continually confronted with loyalty program logos during their shopping trips, may eventually stop noticing these logos. But the habituation process can be disrupted if the repeating stimulus changes in some way that attracts attention, or is temporarily replaced by an alternative stimulus. So, simply, shoppers who have stopped paying attention can be prompted through periodic educational campaigns.

Authors: Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of Technology