Comment: Supermarket prices are never far from the headlines these days as cost-of-living pressures continue to bite. If you’re looking for ways to save money on your weekly shop, you might assume buying larger packs will give you more bang for your buck—especially if there’s a bright red sticker promising a “special” deal on the bigger size.
But my research found buying larger packs isn’t always a sweet deal. In fact, bigger packs can sometimes come with what’s called a “quantity surcharge”—a price premium that means you get poorer value for money than if you bought a smaller pack.
As part of my research, I collected prices at 38 supermarkets around the country for different sized packs of 40 common products. All up, this gave me about 3,000 prices to compare. Analysing this data, I found about one in four products (26 percent) came with a quantity surcharge.
For example, I spotted a 1 kg block of cheese priced at $1.90 per 100 g. But a smaller 700 g block of the same brand was better value at $1.71 per 100 g.
I also found a four-pack of soap bars costing $2.40 per 100 g. This compared with a two-pack of the same soap that cost $1.66 per 100 g. So, buying a couple of two-packs would have been a better choice than a four-pack.
Sometimes the price difference was just a few cents. For example, a 170 g container of instant coffee cost $8.52 per 100 g, compared with a 100 g container for $8.49. However, every cent still counts for budget-conscious shoppers.
Quantity surcharges cropped up in all product categories—from household items to fresh produce, although they were less prevalent in the frozen food aisle. In each case, consumers would have got better value for money by buying the smaller packs.
My findings are consistent with studies in other countries that suggest quantity surcharges are common. These studies indicate that surcharges apply in 10 to 30 percent of cases where items are available in different pack sizes.
I also tested whether quantity surcharges differed between high- and low-income areas. One theory is that wealthier consumers may be less price sensitive, giving supermarkets scope to apply quantity surcharges more often in high-income areas. Surprisingly, the initial findings pointed in the opposite direction to what I expected: quantity surcharges appeared to be less common in wealthier areas. More research is needed to understand why, but clearly it’s an issue that deserves attention.
So, what does all this mean for you when you’re at the supermarket?
Buying a bigger pack can often provide better value for money, but quantity surcharges mean you shouldn’t assume this is always the case. The best way to avoid these surcharges is to compare the unit price—for example, the cost of items per 100 g.
Of course, this is something that may be easier said than done.
As a result of law changes introduced in 2023, supermarkets have to show the unit price of goods to help shoppers compare costs and work out the best value. But unit prices can be easy to overlook. They’re not displayed as prominently as the headline price. Shoppers may have to make a concerted effort to spot them and then gauge whether a quantity surcharge applies to a particular product.
Irregular pack sizes complicate the picture. It’s simpler to work out if you’re being stung with a surcharge when a product comes in 100 g and 200 g packs. But it’s trickier when you need to compare 90 g and 150 g packs. In the rush to do the weekly shop, not all of us have the time and headspace to do this.
And this isn’t just a problem that should be left to individual consumers to solve. My results point to the ongoing need for scrutiny of supermarket prices and what consumers are being charged at the checkout.
This article was originally published in the Sunday Star-Times as part of its Brainwaves series. Madhura's research was supervised by Associate Professor Jan Feld.