5/31/08 - Bulk is not always better

So I actually have my wonderful dad to thank for this post. Because it is his fault that I am the way I am. For me, going to the grocery store is not a trip to purchase food, it's an opportunity to work on my math skills. As nerdy as that sounds, it's the truth.

I have several memories of when I was younger, getting the chance to go grocery shopping with my dad. I had to make sure I didn't have anything else to do for the rest of the night, because I wouldn't be home for a couple of hours. This did of course have as much to do with my dad having to buy groceries for three boys, plus himself and my mom as the fact that he always made sure to get the best bang for his buck on EVERY product that got put in the buggy.

This, of course, was nearly 20 years ago when you would get a better price per unit purchasing the bulk item rather than the smaller size packages of the same product. My dad always checked the prices on all the sizes, so I'm sure he probably recognized this shift in marketing long before I did. For me, though, it was just about 2 or 3 years ago that I noticed a huge change in unit pricing. Suddenly, there were quite a few bulk items that were more expensive per unit than their smaller counterparts.

I believe the first time I noticed it was for a bottle of Suave Shampoo or Conditioner for my wife. They had a two pack deal where the bottles were larger. Instantly, I picked it up and checked the price. After a few quick division problems, I realized that for the money, you could get more product by purchasing the smaller bottle.

More recently, I started eating eggs for breakfast every morning and then sometimes for dinner. At the time, Cristi and I would buy a dozen eggs basically every week during our shopping trip and it would last a week. My diet change required us to buy two and three dozen a week. I had never priced the bulk egg packages because I never felt that any price difference would merit having such a large number of eggs on hand. When I did finally price the eggs, I was surprised that the 2.5 dozen egg packages were more expensive per egg. It was a differnece of only about a penny or two per egg, but the principle was still there.

For me, the bulk egg packages came off as "off-brand" products, so I was expecting an even larger discount. Most other consumers probably thought the same thing. In fact, every time I've seen someone purchase the larger package of eggs, they appear to be living on a very tight grocery budget. I base this primarily on both the food they already have in their cart, and their clothing (very superficial, I know, but without taking a poll, it's all I've got to go on).

My last example is a comparison of Tide laundry detergent. We get the basic Tide product, mainly because I'm apparently allergic to all the other scents and special versions of Tide. Cristi and I have a Sam's Club card and use it quite often. Primarily we have used it for chicken, but more recently, diapers and wipes (which I will have a future post about). Every once in a while, we will price shop an item or two and compare it to Wal-mart prices. These are tyipcally non-perishable items such as detergent, batteries, etc. One of our price comparisons was for detergent and other laundry related items. Of the three items (Tide, Downy, Oxi-Clean), we expected Sam's to be greatly discounted because you were buying such a larger quantity. We were suprised to find that only one was a significant savings. The five pound box of Oxi-Clean saved us several dollars overall. Downy saved us about 25 cents a month on average and the Tide was actually more expensive (by only a fraction of a cent per ounce).

What brought this up is that one of the rss feeds that I read noticed that at many supermarkets and grocery stores, when product sizes change, they don't adjust the unit price. The example used was for Breyer's Ice Cream (I think) who recently changed their packaging from 1.75 quarts to 1.5 quarts without changing the sale price. My exact numbers might be off, but it made a significant difference in the unit price which could cause a consumer to purchase this new package thinking it was cheaper than another. I'm sure this is an honest mistake, but it makes me feel better about always checking and double checking the store posted unit prices.

In summary, I don't really trust unit prices that the stores put on their products. On top of that, many times, they don't provide this information, especially for non-grocery related items. At the end of the day, I might save 2 dollars every trip to the grocery store, but that can add up (assume the savings is put into a Roth-IRA diversified over multiple mutual funds averaging an annual rate of return of 8%) to the tune of $8 tax free (after 35 years). But really, it's my way of sticking it to the man, and that makes me feel good.

Next time you instinctively pick up that large bottle of (insert item here), think twice about whether or not you are getting the best deal. And on the other side, just because the bulk item is cheaper, doesn't always mean that you need 10 gallons of mayonnaise.

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2 Comments - Leave one yourself

Don't all grocery stores have the 'price per ounce' printed on the bottoms of the price tags (the ones posted on the shelves) now?

It enables you to tell at a glance which product is the better value.

By Anonymous Jason, at June 2, 2008 at 2:30 PM  

yes, but they aren't always correct. The first time I make a purchase, I always check the unit price. And besides that, for non-grocery items, it doesn't have that feature (see soap, shampoo, etc.)

By Blogger DJ Walker, at June 2, 2008 at 2:43 PM  

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