What is Unit Pricing?

by Gina Petracca, Graduate Nutrition Student

When you are grocery shopping and about to put a product in your basket, what do you look at? Do you look at the price? And if so, which price do you look at? Most people don’t realize that every item in the grocery store actually has two prices: the price you pay upfront at the cash register and the unit price. A unit price is exactly what it sounds like—it is the price of that product per unit (i.e. per gallon, ounce, pound, etc.). Looking at the unit price can help save you a lot of money. How? The unit price allows you to compare different products with each other and determine which option is the least expensive, without having to do any math or calculations on your own.

The best way to understand how unit pricing works is by example. Let’s say you want to buy a box of cereal—you eat a bowl of cereal every morning—and are deciding between two options: the name brand (18oz. box for $3.00) versus the store brand (14oz. box for $2.50). You can do the calculations on your own to decide which option is the cheapest, by dividing the price you pay at the register by the number of ounces in the cereal box.

  • Name brand: $3.00/18oz = $0.16 per ounce
  • Store brand: $2.75/14oz = $0.20 per ounce

Upon initial glance, the 14oz box appears to be the cheaper option (only $2.75 instead of $3); but when you do the math, the 18oz. box is actually cheaper. Finding out the price per unit is a relatively easy calculation to do. However, if you plan to compare the cost of a lot of products in the store, it would be tedious to go from aisle to aisle whipping out your calculator to do the math. That is where the unit price comes into play. The unit price does the calculation for you. For the cereal example above, the grocery store would have two prices labeled for each cereal box:

Instead of wasting time doing math, you can quickly glance at the unit price, which easily tells you that the name brand cereal is the cheaper option per unit. Look at the unit price for the true price of the product.

Let’s take another example. You are throwing a party and need to buy carrots to go with your famous dip. You can buy: baby carrots, a two-pound bag of regular carrots, or a five-pound bag of regular carrots. Again, you could bust out that calculator app on your phone and calculate how much each bag will cost you per pound, or you can look at the unit price:

Clearly, the 5lb. bag of regular carrots is the cheapest option at only $0.66 per pound—the baby carrots are four times more expensive at $2.00 per pound!

However, there are a few things to keep in mind when looking at unit price. Let’s look at the carrots again. We already know that the 5 lb. bag is technically the cheapest option, but keep in mind that you will have to cut all the carrots into carrot sticks yourself. You will also be left with lots of leftover carrots, if your partygoers do not eat all five pounds. You need to consider how much of the product you will actually use and whether or not you are willing to do the prep work. If you only need 2 pounds of carrots and are willing to cut the carrots, then the 2lb. bag is actually the best option for you. If you won’t use any leftovers and you are unwilling to chop the carrots, then go for the baby carrots—just know that you are paying a hefty fee for the convenience of this food (it’s already been washed, cut, and pre-measured for you).

The greatest power of the unit price is that it is an informational tool. It makes you aware of the true cost of a product and gives you the knowledge to make informed decisions about how you spend your money.

 

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