Gary the monkey

Have you ever been to the grocery store and wondered what that colored label located next to the price label was? That colored label is the product’s unit price. Unit prices provide consumers with a simple way of value comparing products in a given category. Unit prices are not magic numbers, but rather a simple calculation consisting of the total item price divided by a set measurement unit. If Campbells soup was $3.00 for 12 fluid ounces and the measurement unit for soup was 1 fluid ounce, using simple algebra we can determine that if $3.00 buys you 12 ounces of soup, $.25 would buy you one fluid ounce of that same soup. If A&P brand soup was $4.00 for 20 fluid ounces, $.20 would buy you one fluid ounce of soup, making A&P brand soup $.05 cheaper per ounce than Campbells soup. Using unit prices we can determine the cost of items independent of packaging.

Sometimes packaging is designed to trick us into perceiving that a given product is bigger than it really is. Using the unit price we can see through this creative packaging to find the true cost of the product. In recent times companies have begun decreasing the amount of the product but keeping the price the same but decreasing the quantity or volume in order to make us think we are paying what we always did. By keeping track of brands and their corresponding unit prices, one can notice when companies decrease quantity or volume but keep the price the same.

During sales and after deducting coupons from the price of a given product, unit prices are not updated to reflect the sale price. You will have to do some math to figure out the new unit price after the sale price or coupon is taken into consideration. Let’s take a look back at our previous example. If Campbells soup has a unit price of $.25 per fluid ounce, A&P brand soup has a unit price of $.20 per fluid ounce, and you have a coupon for $.40 off of a can of Campbells soup, let’s see what soup is a better deal now.
Take the original price and subtract that value of the coupon and divide by our unit measurement.

($3.00 – $.60) / 12 fluid ounces = $.18 per fluid ounce.

If you were still going by the old unit price, you would not be able to determine what soup was the better deal. By recalculating the unit price for Campbells soup we have determined that both soups cost the same amount if we take the Campbells soup coupon into consideration.

By making use of unit prices, the average consumer can see through deceptive packaging and sales to buy products that are the lowest price. If an item is on sale, an updated unit price is not usually displayed. You will have to calculate the new unit price yourself. Unit price does not determine the quality of items. Next time you are at the grocery store, remember to pay attention to unit prices if you are concerned about cost.