Grocery Shopping 101

Quantity Surcharges and 10 Products to Watch Out For

One common trap with buying in bulk is the fact that on some products, the higher volume version often has a higher cost per unit than the smaller version. For example, I recently spied two cans of tuna on the shelf at my local grocery store. The same brand (Starkist) featured a 5 ounce can for $1.29 and a 12 ounce can for $3.19. Per ounce, the smaller can featured tuna for $0.258 per ounce, while the larger can cost $0.265 per ounce, making the smaller can the better deal. This stuck in my head, so I went home and did some research on these price differences.

This “feature” crops up in many different products is called quantity surcharge, and it’s been prevalent in the supermarket and department store since the 1970s at least. Recently, while browsing through the Journal of Consumer Affairs (seriously – I live not too far from an academic library, and JoCA has lots of interesting material in it that serves as great food for thought), I came across an older article entitled Measurement of Incidents of Quantity Surcharge Among Selected Grocery Products. The article identified ten specific products where quantity surcharges often occur.

So, without further ado…

10 Products to Study Carefully Before Buying in Bulk

I went to the store and tried to find them myself – my notes on what I found follow each item.

Tuna fish

In the article’s survey, tuna suffered from quantity surcharge 84.4% of the time. In other words, the best deal on tuna is usually the small cans, not the bigger cans, as I noticed above.

Ketchup

In the article’s survey, ketchup suffered from quantity surcharge 45.0% of the time. When looking for this, I observed it with Heinz ketchup. I also noticed that a ketchup multipack of smaller bottles was actually the best deal.

Canned beans

In the article’s survey, canned beans suffered from quantity surcharge 40.7% of the time. When I looked for this one, I noticed it in virtually every type of Bush’s baked beans in my local store – most other brands had almost identical prices per unit in all sizes.

Salad & cooking oil

In the article’s survey, oils suffered from quantity surcharge 36.5% of the time. This was perhaps the worst example I found. I found a store brand of olive oil in two different sizes, with the larger size costing almost 40% more per ounce than the smaller size. Even a cursory glance at the prices made it clear that the prices were out of whack.

Dishwashing detergent

In the article’s survey, dishwashing detergent suffered from quantity surcharge 34.1% of the time. I found this in the store brand of dishwashing detergent – the name brands were cheaper to buy in bulk.

Laundry detergent

In the article’s survey, laundry detergent suffered from quantity surcharge 33.3% of the time. Similarly, I found the store brands actually had a quantity surcharge, while the name brands did not.

American cheese

In the article’s survey, American cheese suffered from quantity surcharge 31.6% of the time. Yet again, the store brand seemed to do this, while the name brand did not.

Canned vegetables

In the article’s survey, canned vegetables suffered from quantity surcharge 13.0% of the time. I only found one incidence of this after examining quite a few canned vegetables, and that incidence was the result of a sale on the smaller cans.

Jams and jellies

In the article’s survey, jams and jellies suffered from quantity surcharge 12.1% of the time. I couldn’t actually find different volumes of most jams and jellies.

Syrups

In the article’s survey, syrups suffered from quantity surcharge 5.2% of the time. I didn’t actually find any when I looked around.

What lessons can we learn?

The best strategy is to always calculate the cost-per-unit yourself

Or use stores that calculate it for you. Many stores give you the cost-per-unit right on the shelf. If your store does that, use the cost-per-unit as your metric for making a purchase. If your store does not, you can calculate it yourself very easily and quickly with a pocket calculator.

Sales and coupons easily make this confusing

Most of the time, sales alter the picture, but not always in the obvious way. I saw several incidences of the large and small versions both being on sale, where the regular prices had the smaller version being a better deal and the sale prices had the larger version being a better deal. This wasn’t clear, either, since the “sale” tags didn’t have the price per unit on it. Again, it pays to be able to calculate it yourself.

Store brands seem to do it more often than name brands

This might just be a quirk of my observations, but I consistently found quantity surcharges more often in store brands than in name brands.

Multi-packs were usually the best deal

Multi-packs of the smaller version of most items was the best deal overall – but it does require you to do things like buy three bottles of ketchup or dish soap at once.

Warehouse stores add to the confusion

I tried doing price comparisons between my local warehouse store (a Sam’s Club) and my preferred grocery store. I found that on almost every item I compared, the warehouse club was cheaper per unit than the same brand at the grocery store. However, the brands carried at each were often vastly different, so it’s hard to get a full picture.

In the end, though, the key is to just focus on the cost per unit. The larger item is usually the best deal, but as you’ve seen above, it’s not the best deal often enough that it’s well worth your time (and money) to pay attention when shopping.

Good luck!

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  1. Nick says:

    Great tips Trent. It’s always nice to carry a calculator (or use one on your phone) while in the store to help out with these calculations if the store isn’t doing it.

    It’s interesting to see how the food producers are using what most people think (the more I buy the cheaper it will be) against them.

    Great article.

  2. Kyle says:

    I began noticing this a few months ago and it drives me nuts.

  3. Marc says:

    Don’t forget that even stores that “calculate it for you” can make mistakes — or not. I usually check the shelf per-unit price (not that I don’t trust the store) and have found plenty of times that their per-unit was off… usually significantly.

    Another pain is different units in the store-present per-unit pricing. Why do I need to know price per 100 on one company’s product, and price per gallon (?) on another, and price per quart or ounce on yet another. They’re all the same product, just different companies. Sad to say, but “trust, but verify”.

  4. George says:

    I thought unit pricing was a federal mandate from the ’70s? Did somebody repeal it? Or is it just not being enforced?

    Yes, canned tuna most commonly has a “surcharge”. I always figured it had to do with more waste when cutting a fish up for the larger cans rather than an overt act of greediness, such as would happen with laundry detergent.

  5. teri says:

    the trouble is, of course, packaging. In buying the cheapest (saving fractions of a penny per unit) you may have to buy more packaging…which is really high in hidden costs (materials, shipping, pollution, etc). Just something to think about…

  6. john d says:

    @teri Yes, i was going to comment on that exact thing. It might be more ‘price’ effective, but not as ‘cost’ effective. The other thing to think about is the amount of waste when using a product. For example, tomato paste in a tube might cost more, but you don’t have to open a 4oz can to use only 1oz.

  7. Chris says:

    The issue I have seen with Wharehouse club deals is that they often have unusual package sizes, or combinations of products making it hard to compare or get them to price match. My Daughter likes granola bars but only one flavor. Grocery store has only small quantities, BJ’s is cheaper per bar but only has large variety pack.
    teri – I agree, and a big part of being frugal for me is reducing the waste generated by my consumption whether I pay for it or not.

  8. Sandy E. says:

    Good point — we’ve all been trained to think that bigger is cheaper, but upon closer scrutiny, more times than not, it isn’t. Each time I discover this, it surprises me, but I’m always glad I took the time to check. I imagine the food producers are going for the shoppers who assume bigger is cheaper (without checking) and those perhaps with kids who just don’t have the time to comparison shop re sizes.

  9. Maggie says:

    I would still buy the bigger ketchup regardless, to minimize the time my family spends wrestling with the bottle to get the last bit out.

  10. J.D. Roth says:

    I went to the grocery store on Sunday to buy some potato chips for dinner. (We were grilling burgers.) I reached for the 5 oz bag, which was priced at $2.50. But as I did so, I noticed that the 9 oz bag was selling for the same price!

    It always pays to check unit pricing. You never know which will be the better deal.

  11. SteveJ says:

    Peanut butter often has this surcharge as well. The store brands catch my ire for this trick on cereal too. I love the price per unit labels, but make sure they’re comparing the same units. I’ve found at petsmart and other places those 12 packs of cat food are more expensive than buying 12 cans separately. The unit tag indicates per ounce on the one and for the package on the other. Tricksy! I’ve also seen where one item had the value in ounces, the other in grams. Don’t forget your conversion tables ;)

    Coupons always kill me when I go shopping. It’s such a great deal, because I have a coupon, which would be doubled!, and..and…and…it’s still cheaper to buy this other brand. Then I’ll start to talk myself into having to use the coupon before it expires…it’s ridiculous how they affect my thinking at least. I think it’s the time sink of searching for them, organizing them, searching for the items, checking the quantities and then finding out all that time was wasted, I could have just waltzed in and grabbed the cheapest item on the shelf.

  12. Years ago someone pointed out to me a quantity surcharge with packages of batteries. At the time I verified for myself that there was indeed a sizable markup on the larger packages, but I believe that in recent years that markup may have dwindled or disappeared (though I only sparsely buy rechargeable batteries so I don’t pay much attention to battery prices on a regular basis).

    @teri, @john d: Agreed. If there’s a significant difference in the amount of packaging used, but only a small difference in the per-unit price, I’ll go with the one that uses less packaging.

  13. k2000k says:

    nice article, I was completely unawares about the quantity surcharge, though when I was young my mother taught me to look at the price per unit label that is in the grocery store.

  14. Jules says:

    Maybe you are paying an extra $0.02 for an ounce of tuna. But I think the real question is whether it’s cost-effective for you, and whether you give a damn about all the packaging that you’re essentially wasting. And cluttering up our landfills with.

  15. dragonslayer says:

    Despite conventional wisdom to the contrary, 75% of my grocery purchases on done on an absolute cost basis. Often the larger size is the best deal on a per unit basis, but that makes no difference if I can’t use it all before it goes bad.

    Milk is a great example. Often cheaper to buy the gallon, but I only use half-a-gallon (at most) before the expiration date.

  16. mes says:

    It drives me nuts when different items use different units. One brand of ketchup will list price per ounce and the other will list price per pound or per pint.

  17. Bargain Babe says:

    Absolutely, you have to check the price per unit at the grocery store. If your store doesn’t do this for you, I would mention it every time I shopped there or switch stores. Because grocery prices fluctuate, it’s important to always check the unit price. NOT being brand loyal always helps – go with what’s on sale!

  18. TDH says:

    Is there a good way to comparison shop toilet paper? I get confused when trying to compare the per unit cost for toilet paper because each brand packages a different number of roles, with different sheets per role, with different plys per sheet…. How do I know when I am getting the best deal on toilet paper?

  19. Kate says:

    Ditto on the peanut butter! I read a study once that determined that lower income folks didn’t realize that they should be aware of price/ whatever cost. They used peanut butter jars as their indicator. I had to laugh because almost always it is cheaper to buy smaller containers of peanut butter. I bite the cost bullet, though, because of the packaging that I have to throw away with the smaller containers.

  20. Kate says:

    Bigger is rarely better and as you point out, bigger is not always cheaper. Price is not the only factor in play when making a purchase. I won’t buy 10lbs of something because it’s cheap (it will get wasted), and I won’t buy tiny containers of things (like 8oz of ketchup). Cost on our environment is something to consider.

  21. Allie says:

    Sugar is another big one they do it with. Most stores have a per/unit price on the same tag as the actual cost of the product, so even if you don’t have a calculator with you, a quick glance at all the options should give you a head’s up on what’s the best deal.

  22. Karen says:

    Lots of surprises, and I thought I was a savvy shopper.Thanks for the info. What about diapers? Is smaller better? I ask, having just read a great article on handmadenews.org about homemade diapers: http://www.handmadenews.org/article/index.php?id=1165
    Sounds like an article idea for you???

  23. Saver Queen says:

    Wow, this was really interesting. I find the only way to get the best deal is to do the math. Usually the stores already have the unit cost, but like you say, factoring in sales or coupons can change the final price.

    Thanks for the reminder to always double check!

  24. Heather says:

    Same as some other commenters, the (other) frustration with this is that it results in the cheaper option leading to more packaging and landfill material. That’s more frustrating for me than the non-proportionate pricing!

  25. reulte says:

    That’s why my preference when shopping is to have my little notebook handy with commonly-purchased items already listed, whether brand is important, other caveats and a good price per (my chosen) unit. I think Trent has discussed this already. the problem is keeping this updated as prices change . . . so, pencil is paramount!

  26. mikolaj says:

    The unit price is not always enough.

    I have seen that washing gel in big bottles is thinner than in smaller ones. So the lower unit price most probably is offset by higher water content. Big and small washing powders also visibly differ.

  27. tightwadfan says:

    Interesting that this has been happening since the 70s, I only noticed it recently. My grocery store charges more per unit for the larger bag of rice, and for frozen orange juice (neither were store brands). I heard that the rice surcharge was due to the rice shortage (this was last year). But I haven’t heard why there’s a surcharge for other items. It makes no sense to me, the larger quantities use less packaging so should be cheaper for the producers. Did you find any explanation in your research Trent?

  28. Tordr says:

    Reading this post, I have to be happy living in a country (Norway) which mandates that in addition to the listed price, the prices also be given in standard units.

    So if I am shopping for toilet paper, each brand has a listed price, but the price is also given per 100 meter paper. Making comparison shopping is easy.

    Cheese, meat, canned goods, rice, butter and so on are priced per unit, but also per kilo. So I can instantly see if the small packages are more expensive that the large packages or the different prices between brands, without using a calculator. This is a huge bonus when doing comparison shopping. Therefore I regularly ignore the price of the items in question, and rather focus on the kilo price for items. So I get more food for my money.

  29. Fiona says:

    Our local grocery store gives a break down on the price notices by ounce and that’s where you can really notice that bigger isn’t always cheaper.

  30. Bev says:

    I buy the coffee for our staff room at work, and so tend to go for the large tins of coffee, however it is always cheaper to buy 2 300g jars of coffee than one 500g tin. It annoys me as I’d rather just carry one tin into work, but I won’t pay more for 100g less of coffee!

  31. frugalrandy says:

    As SteveJ and mes point out, trying to comparison shop with per-unit labels is a joke since the stores routinely calculate different units between different brands, or conveniently forget to stick a tag under the economy size.

    And to the armchair environmentalists, stop boohooing about the packaging. If you’re visiting your recycling center regularly this shouldn’t be an issue worth agonizing over. And besides, you can always repurpose your empty peanut butter jars as drinking glasses and pencil holders.

  32. Laura says:

    Great post, Trent. My mother, being the queen of frugality, always took us grocery shopping and pointed out what made one item a better value than the other. The top one was toilet paper. She said to always check the square feet on the package, as that is how much paper you are actually getting. You may think the 24 pack is cheaper, but if you check the sq footage, there is actually less paper in some than a 12 pack of another. Which I have found to be quite accurate. Sometimes I can go one step further, wait till it’s on sale and use a coupon, or in the case of Target or Walgreens, use their coupons plus manufacturers coupons together and get a great deal. That’s when you stock up.

  33. When shopping, I always look at the cost/unit and compare different sizes within the same brand class. You are right, sometimes its cheaper to get two small size items instead of the large. Its a great little way to save some money weekly when buying the necessities.

  34. A.J. says:

    My local Wal-Mart currently charges $1.98 for a 2-pack of Hot Pockets and $5.37 for a 5-count ‘Value Pack’.

    That one’s so blatant (even without any calculations, it’s obvious that the former is under $1 apiece and the latter is over $1 apiece), it always makes me chuckle.

    Also, while this was due to a sale, I always had to shake my head at Quizno’s when they were doing their “$5 Large Sub” promotion…on their ‘bottom-tier’ subs, they were charging $5 for a large sub and $5.19 for a regular. I may or may not have once ordered a large, eaten a regular portion, and threw the rest away (no, I have no idea why)…

  35. Oskar says:

    Anyone know how much of this difference i price is due to the fact that the most common size package probably is the best deal for the store given the faster turn over time? E.g. if you sell 100 units of ketchup of the smaller size a day and only 10 units of the large size I would argue that the larger size bottle is probably a loss for the store even at a slighly higer price per oz….

  36. Rachel says:

    I have been married and grocery shopping for almost 29 years, and I have always bought the smaller packages of the food you mentioned. I guess in the beginning I noticed it was cheaper and just went with that. Guess I did okay, raising 3 kids on a bare bones grocery budget.

  37. tentaculistic says:

    Good information, I wasn’t aware of this!

    I save money grocery shopping by going to Peapod before I go to the grocery store (I work on a computer so it’s easy to find time to update my grocery list, and it works as my ongoing grocery list as I think of inidividual items I need). Then when I go to the grocery store, I know how much the item available on PeaPod was, and am usually delighted by the cheaper options available in the store (usually store brand). Plus that way I stick to my grocery list.

  38. Gregfox says:

    My favorite example of this: At McDonalds, a 4-piece chicken nugget is $1 and a 6-piece is $2.40. That gets me every time.

  39. I noticed this over the weekend. The smaller sized Heinz ketchup had a lower unit price. I thought it was a mistake. I’m surprised that people buy the larger size when the unit price is listed right next to the item price. You can’t blame the lack of a calculator for this one.

  40. Matt says:

    I have noticed the bulk surcharge myself, but I think we need to look at our efficiency of use of the products we buy in addition to whether it is in fact the lowest price. What I mean by efficiency is that our ability to get the full value out of a product is more important than shaving pennies of the unit price because I’ll save more in the long run. An example is the kinds of paper towels I’ve bought over the past year. Earlier this year I bought an 8 pack of the bulk paper towels from Costco which were about $0.002 cents cheaper per towel than the super market variety. However, each towel was 12 in. X 12 in. causing my family to use whole towels for clean up of trivial messes (on a side note, I’m trying to replace paper with re-usable cloth, and it has been a slow process thus far due to conveinence). We burned through the 12 pack in about 3 months. However, more recently I purchased an 8 pack of select-a-size towels that were about $0.004 more per sq ft than the bulk . It has taken us a month to use one roll of these because we use them much more efficiently to clean up small messes.

  41. Louise says:

    Since our kitchen is only 6 ft x 8 ft, smaller packaging is important and quantity surcharging often works in our favor. However, we have to store trash and recyclables in that same space, so the type of packaging therefore becomes the higher priority. Sometimes it is tough to balance the two!

  42. Just as the bigger packages are always cheaper, using coupons doesn’t always save either. There are a series of posts on coupons on our web site such as: coupons and vegetables, coupons and biscuits, breadstick and cookies.

    http://www.extension.iastate.edu/foodsavings

  43. S says:

    at my local safeway, this happens with yogurt, something i used to eat every day. it is frustrating because the individual servings are always (literally always) on “sale” and therefore come out to half the price per ounce of the big tub. we can’t recycle yogurt tubs in my city, and i don’t want to make my own. annoying.

  44. tightwadfan says:

    Corporate Barbarian, I think a lot of times people go for the larger package without even looking. That’s what almost happened to me with the rice, I automatically picked up the bigger bag, then happened to glance at the price of the smaller bag next to it and noticed it was way cheaper unit-wise. Since stuff like milk and eggs are usually cheaper in the bigger containers you start thinking everything’ll be like that.

  45. Terri says:

    Great article, “food for thought” (excuse the pun)
    Most frugal way to buy groceries:
    Buy the size you need, when it’s on sale and use coupons!

  46. dragonfur says:

    Another thing I’ve noticed, this time in cat food, is an advertised price drop, then when you really look, you discover the package has less in it than before, so the price per unit (pound, in this case) is actually higher.

    I found a Purina cat food variety, that was being advertised as a price drop of 50ยข, but the bag was 14 lbs instead of 16. Some price “drop”!

    Purina is going to hear about that from me (for all the good it will do! Corporate dishonesty is the norm, now.)

  47. Anne says:

    Matt I’ve noticed the exact same thing about the select-a-size paper towels in my single person household. I use cotton kitchen towels for little things and have trained myself to only use 1/3 of a towel for greasy messes or kitty related messes.

  48. Sara says:

    I’ve noticed this occasionally, but I had no idea the “quantity surcharge” was so widespread! Another fast food one I’ve seen is at Dunkin Donuts, where a dozen donuts costs more than two half-dozens.

    Another consideration with coupons is that even if the larger item has a lower unit cost than the smaller item, a coupon can turn the tables to make the smaller item less per unit. For example, if a 10 ounce item costs $2 ($.20/ounce) and a 15 ounce item costs $2.70 ($.18/ounce), but you have a $1 off coupon good for either size, that makes the 10 ounce item $.10/ounce and the 15 ounce item $.11/ounce.

  49. Wow! I had noticed long ago that bulk flour cost more than regular sizes, but I didn’t realize it was so common in other staples. Thanks for pointing this out, Trent.

    And that’s very cool that you read academic journals for fun. Sounds like something I’d do…

  50. Erik says:

    I am definitely aware of this grocery store and manufacturer tactic to try to trick someone into buying more for less or a different packaging with a higher cost, but I don’t always keep my guard up on this one. It definitely takes the “10 second rule” that you talk about to make sure that you aren’t paying more than you need to.

  51. Rachel says:

    A few things that came to mind whilst reading this:
    * Price-per-unit as given in store for canned veggies etc doesn’t take into account the liquid – cans like that have two weights noted, one for the entire contents and another a drained weight. If you’re going to tip the liquid down the drain, it shouldn’t be included in the calculation, but many stores use the higher weight (looks cheaper per unit), which can sometimes tip the balance re the value of different sized packages.

    * If the price-per unit is so small as to be negligible, then the psychological effect of using more of a product when it is in a larger package could actually make the smaller package better value in the long run, unless of course you routinely decant the product into a fixed-size dispenser/jar/bottle.

    * Again, if the price-per-unit difference is small in the favour of the larger package, then even the slightest chance that you would end up wasting any by not using it up in time also plays a part.

    Really great post, Trent! We don’t have so many coupon opportunities in Israel, but this type of post is a great help for any shopper.

  52. Great post!

    I have seen example after example of this surcharge.

    I shop by unit cost exclusively now since figuring this out a few years ago.

  53. I figured this out several years ago. Even did a science fair project with my daughter, proving the “large economy size” was NOT necessarily the best deal!

    Thanks for sharing the actual figures on this!

  54. Vanessa says:

    I always do my shopping by the unit, so I noticed this a long time ago (though I didn’t realize there was a name for it).

    One other thing to pay attention to, though, is what unit you actually use vs. the unit prices at the store. With cheese, for instance, the brand I buy comes in two sizes, 8oz and 16oz. The 16oz is more expensive per oz, so you would think that the 8oz was the better buy. However, the 8oz has 8 slices while the 16oz has 24 slices. By figuring the price per slice instead, since we base our cheese consumption by the slice, no the oz, I find the 16 oz to be the better deal.

    The same can be said for things like laundry detergent, which have their unit price by the oz, but we use them by the load. Those are the two best examples that I can come up with right now (but I think you pointed out something similar with coffee in a later post).

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