Coles commits to unit pricing

Posted by Daniel Palmer on 27th May 2008

It now appears that unit pricing will be prevalent in Australian supermarkets within 12 months in the wake of comments made by Chief Operating Officer of Coles, Mick McMahon, at yesterday’s hearing into grocery prices.

Mr McMahon told the inquiry that Coles, which has previously been non-committal to the idea, now supported unit pricing. “Our view is that unit pricing will benefit customers and we would prefer to see this adopted universally by all supermarkets and food retailers across Australia,” he said. “We would like to play on a level playing field and compete on the same basis.”

The unit pricing plan, which has steadily been garnering support over the past year, was finally introduced to the Senate by Family First Senator, Steve Fielding, almost two weeks ago. The proposed legislation changes would require supermarkets to display a ‘price-per-unit measurement’ figure on their products and is designed to help consumers lower the cost of their grocery bill. The campaign has been pushed by consumer advocates CHOICE and Mr Fielding, with the idea coming from other nations, including areas of Europe, America and New Zealand, who have already employed unit pricing.

“By comparing items sold on a per unit basis, such as per kilogram or per litre, shoppers can save thousands of dollars a year on their weekly supermarket shop,” Mr Fielding has asserted. “Supermarkets should provide families with fair and transparent pricing so they can get the best value for their dollar.”

Discount grocery chain, Aldi, has already implemented unit pricing in their stores with Woolworths set to introduce their new system before the end of the year. Coles will follow in their footsteps via a $10 million commitment to update their stores within the next 12 months.

Peak retail industry body the Australian Retailers Association (ARA), meanwhile, has not supported unit pricing with claims that any talk of savings to grocery bills may be deceptive. “The assumptions of reducing the amount of money handed over at the supermarket checkout is misleading as the final payment may indeed go up if the unit price was cheaper on greater quantities,” ARA Executive Director, Richard Evans, has stated. “Shoppers may get a better unit price but their actual cost will go up as they buy more.”

However, with support from Coles, it now seems to be a mere formality that most Australian supermarkets will provide unit pricing whether or not the legislation is passed. Many niche food retailers, though, may still be hoping the unit pricing idea does not become law due to the potential costs of having to update pricing systems.