Unit pricing: Get more food for less money

This article was written by Charlie Park at PearBudget.

Recently, Get Rich Slowly readers got upset at the idea of spending $6 on a gallon of milk. Reading that, I had to chuckle a little bit: Shortly before we had to give it up, our milk went up to $11 a gallon.

Yup. You read that right: $11. A gallon.

Technically, the milk was free, but the boarding and care of the animals that give us the milk went up to $11 a week for every gallon we got. The payoff was awesome: farm-fresh, antibiotic- and growth-hormone-free milk. And the expense was necessary: My wife was nursing twins, and she’s allergic to milk from the store. (Now that the babies are weaned, we’ve stopped buying it from the farm.) But the result was the same: We drank a gallon of milk and it cost us $11. Yikes.

So why, if we were willing to spend $11 on milk, would I be qualified to write about saving money while shopping?

In order to have the money for such expensive milk, we had to keep an even sharper eye on our other grocery spending. To not compromise on the foods that matter to us (organic beef, good produce, hormone-free milk), we had to find other ways to cut food costs.

Standard Advice

Almost any “how to save money on groceries” article will tell you one of five ways to trim costs. You’ve probably seen them before:

  1. Buy different kinds of food (lentils in place of meat; generic instead of premium).
  2. Buy from a cheaper source (Food Lion, rather than Whole Foods).
  3. Buy in bulk (from Costco or another consumers’ union).
  4. Buy only foods that can be reused or recombined with other leftovers to make new meals.
  5. Use coupons or sales to only buy when items are discounted.

Each of those methods is a good way to watch what you spend. And new tools like The Grocery Game help to compare costs. Unfortunately, those options aren’t always possible, or they don’t do enough. Maybe you don’t have access to a bulk food club. Maybe you have trouble finding coupons for the kinds of food you buy. Maybe you already buy generic brands, but it’s still not enough.

Luckily, there’s something that you can do — today — that takes no planning, requires no math (usually), and that will save you money every time you shop. It’s called unit pricing, and it’s pretty neat. If you’re a grocery guru, you almost certainly know about unit pricing (it’d be great if you could add a comment to the post about unit pricing techniques you use); but if you’re new to grocery shopping, it’s possible nobody’s ever told you about unit pricing, or explained how it works. Let’s change that.

Unit Pricing

In most states in the US, and in more and more countries around the world, every time you see a price tag at a grocery store, you’ll actually see two prices. The more prominent number is the real price — the amount that the cashier will ask you to pay when you get to the cash register. The smaller number, tucked away on the side of the price tag, is something called the unit price. Often, the unit price will be in a smaller font size, printed with a lighter color of ink, or the real price will have yellow highlighting on it to call attention to itself. Ignore the big, bold, yellow-background number. Embrace the unit price.

The unit price is the amount you’re paying for each “unit” (ounce, pound, etc.) of the product you’re buying. By giving you a standard unit to use to compare products and packages, the store lets you make a more informed choice. You can let the store do the math for you, to make it easier for you to compare prices.

Here’s an example: I have a small party coming up, and I’d like to buy some soda. I’d like to avoid 2-liter bottles, if possible, opting for single-serving containers.

I go to the store, and it turns out I have seven different options (plus the two-liter bottle):

  • A six-pack of 24-oz. bottles for $3.50.
  • A six-pack of 8-oz. cans (the “100-calorie cans”) for $2.59.
  • A twelve-pack of 12-oz. cans for $3.99.
  • That same twelve-pack, but with a store loyalty card for $3.66.
  • An eight-pack of 12-oz. bottles for $3.49.
  • A 2-liter bottle for $1.59.
  • A six-pack of 8-oz. “classic” glass bottles for $4.19.
  • And then, there’s always the option of buying the pre-chilled 20-oz. bottles in the refrigerated case, at $1.49 each.

Maybe you’re better at doing math in your head than I am, but I look at all those numbers and my head starts swimming. My eyes begin to glaze over.

But here are the same options, with their unit pricing:

[spreadsheet demonsrating unit pricing]

Unit pricing lets you keep fewer numbers in your head. It’s easy to look at the options in front of you, to compare them, and to see which one makes the most sense.

Bigger is Not Always Better

Knowing that we’re now comparing apples-to-apples, we can look at the price per quart, and see that the six-pack of 24-oz. bottles is the cheapest of the “single serving options.” And we can see that the twelve-pack of cans is just little bit more than that. And we can see that the 2-liter bottle is the cheapest of all of them, and it gives guests power over their portion control, so maybe I’ll reconsider that whole “single serving options” decision.

“I know all that already,” you’re saying. “Buy the biggest box on the shelf, and you’ll automatically get the lowest price per unit.” That’s often (but not always) true. If you’re buying a commodity item (something you tend to buy every single time you’re at the store, and that you tend to go through at the same rate whether you have one pound or ten pounds of it on hand [think: rice]), you can usually get away with just buying the biggest package you can. But it’s easy enough to check and see that you are, in fact, getting the best price — just look at the tag. (For example, pay close attention in the breakfast cereal aisle. We’ve found that the biggest box of Cheerios sometimes has the highest unit price.)

Meat Market

I know you’ve basically got it by now. But there’s one more section of the store we’ll take a look at, since it’s a place where unit pricing is incredibly easy, and where it can make a big difference to your food bill: the meat department.

Meat is one area where unit pricing is actually really really easy. If you don’t use unit pricing anywhere else in the store, at least try it with the meat department. Most grocery stores print their own labels for their meat — the numbers are large and readable, they’re custom-printed for each package, and they include the sell-by date, the size of the package, and the unit price (all of which are useful data).

One especially nice thing about shopping for meat: it’s all measured with the same unit! So you can, very easily, see what the per-pound price of that ground beef is, compared with the per-pound price of the filet mignon. You can look at the boneless chicken breasts, as compared with the drumsticks. You can look at the fish versus the chicken, or the pork versus the beef, and decide which will be the better purchase.

Smarter Shopping

Unit pricing isn’t always the best method to use for shopping. There are always other things to consider as well. Are the ingredients safe? Will my family eat this? Obviously, unit price shopping isn’t a substitute for that. But it’s one more tool you can use to help you make better financial choices when shopping.

So if you’re trying to get out of debt, or you’re trying to save for the future, take a look at the choices you’re making with your food buying. Saving 20 cents here and 75 cents there can really add up. And maybe buying according to unit pricing will help you spend less on things that aren’t as important, so you can buy more of the stuff that matters. Like $11-a-gallon milk.

Charlie and his wife live in Virginia with their three daughters. They’re the folks behind an easy online budget program called PearBudget. Photo of Italian butcher by o0Karen0o.

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