Grocery pricing plan gathers momentum

Posted by Daniel Palmer on 9th May 2008

A drastic change to the way grocery costs are displayed to consumers is still being considered by Prime Minister Kevin Rudd.

The change will require supermarkets to display a ‘price-per-unit measurement’ figure on their products and is designed to help consumers cut their grocery costs.

CHOICE have been advocates of the idea for about a year and have written to Fair Trading Ministers in Australia’s states and territories in order to get the system up and going. They believe that by allowing consumers greater ability to effectively compare prices consumers will be able to make smarter choices and save money on their grocery bills. Family First Senator Steve Fielding has also been promoting the idea and met with Mr Rudd last week to discuss the possibility of introducing the plan. According to News Ltd the Government has now asked the Australian Competition and Consumer Commission to look into the proposed pricing plan.

The ‘unit pricing’ ideology has already been utilised in the US and some European countries and is designed to provide consumers with a greater awareness of the true cost of their groceries. Consumers are then able to readily conclude, for example, whether or not a 725G box of Weet-Bix is comparatively cheaper than a 625G box of Vita Brits.

The plan could prove costly to supermarkets as systems to determine unit prices may need to be discovered and implemented.

Support for the program amongst retailers has been mixed with CHOICE reporting that Woolworths and Aldi appear to be the least resistant to the proposed changes.

“Unit pricing would further illustrate our price competitiveness and show customers just how competitive we are on a gram for gram/unit basis,” a spokesperson for Aldi told CHOICE. “We believe it will only be (a matter of) time before it is common practice here in Australia.” Aldi have since implemented unit pricing in their Australian stores.

The true impact of ‘unit pricing’ will continue to be debated but reports of consumers being able to save up to 47% on their grocery bills appear very optimistic.