Wednesday, June 20, 2012

A Not So Sweet Price Increase

If you're a baker, this is going to leave a sour taste in your mouth. Some producers are no longer packaging sugar in five pound packages, but rather shipping out four pound packages.

By itself, that wouldn't be so bad, but the prices aren't cheaper. They're simply selling the four pound packages at the former five pound price.
It was only a matter of time before 4-pound bags of sugar became the norm because we've been seeing some house brands, as well as brand names in fancy containers, packaged in 4-pound bags, 1 pound less than the longtime standard.

But Sunday, while doing my monthly Marketbasket Survey, the Domino and house brands of sugar at a local Stop & Shop came in 4-pound bags only.

If you looked, the smaller size was listed on each, but who bothers to look that closely, especially when you think you're getting a bargain. The price was $2.99, while ShopRite had sugar for $3.09 for 5 pounds and Pathmark had it for $3.29 — which were much better deals on a per-pound basis.

This is just the latest in a long line of shrinking packages, including tuna, cereal, orange juice, ice cream, coffee and most canned goods. It's a way for food companies to quietly raise prices while seeming to hold the line on the shelf price.
So, at $3 a package, it works out to about $0.7475 per pound for the 4 pound package, but $.598 per pound in the 5 pound package.

By my math, that's a not quite stealthy 25% price increase. Nicely done!

Call it inflation or passing along a not so stealthy price hike on to consumers, but this has become a staple in food and other consumer goods. Prices may look stable, but the product size has dropped, meaning that you'll end up having to buy more of that product over time.

It's yet another reason to pay attention to product size and the shelf information to see price per unit - to compare costs.

1 comment:

Blogger said...

Quantum Binary Signals

Get professional trading signals delivered to your mobile phone every day.

Start following our trades today and profit up to 270% per day.