Thursday, December 2, 2010

The Importance of Unit Prices

When I go shopping, one thing I always check is the unit price (ie price per ounce, pound, etc.).  With so many different packaging sizes and brands, this is an important factor in grocery shopping on a budget.  For example, I went to the grocery store this morning to get Cuties, which were on sale for $3.99 for a 5-pound box.  However, when I got to the store, I noticed their 3-pound bags of Cuties were also on sale for $1.99 per bag.  A little math reveals that the 5-pound box costs 80 cents per pound, while the 3-pound bag only costs 66 cents per pound.  I could buy 2 3-pound bags of Cuties (6 pounds total) for the same price (actually one cent cheaper) as a 5-pound box - this was a no-brainer for me!  While the price difference in this scenario may not have been huge, this is just an example of why it's important to comparison shop by unit price.

I know many people don't like math, so here's a quick explanation of how to figure out unit price:

Take the price of the item and divide it by the size or weight (ie ounces or pounds).  For example, for the 5-pound box of Cuties, I did: $3.99/5 lbs = $0.80 per pound.

If you want the unit price per ounce, simply divide by 16:  $0.80/16 = $0.05/oz.

Some stores do all the work for you and print the unit price on the shelf tag, usually in ounces.  It is useful to memorize that $1/lb = $0.0625/oz.  Knowing this, you can simply look at the price per ounce on the tag and estimate how much you are paying per pound.  If the shelf tag says an item costs $0.19/oz, you know you are paying about $3/lb.

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