Gas prices shrinking our package sizes

Published5/28/2008 12:08 AM

As the prices of groceries and gas continue to climb, shoppers need to be more creative to find ways to save on necessary grocery items such as dairy products, produce, bread and meats. According to the Bureau of Labor Statistics, the prices of these key items have increased dramatically since 2003.

Specifically, gasoline prices have gone up 135 percent, eggs are up 35 percent, bread is up 34 percent and apples are up 25 percent. With the increased demand for ethanol affecting the cost of corn and feed for livestock, we can only expect these price increases to continue.

Food manufacturers are also challenged by the increasing costs of delivering their products as gasoline costs rise. In the past, I've written about the trend toward decreasing package sizes without decreasing prices. This approach is typically less noticeable to shoppers. For example, my mayonnaise brand used to come in a 32-ounce jar and now it is in a 30-ounce jar. Assuming the price of the mayonnaise is the same for both sizes, this package change is the equivalent of a 6.3 percent price increase. I certainly appreciate the need to pass along costs to the consumer, however, some manufacturers may be taking advantage of this sizing strategy by taking exorbitant price increases.

For example, this week I was buying ice cream, on sale for \$3. Years ago ice cream sold by the half gallon, and today most of the major brands come in a 56-ounce carton, which is essentially a 12.5 percent price increase. Ironically, the cheaper store brands are typically still in the 64-ounce half-gallon carton.

As I was rummaging through the cartons to find my flavor, I was shocked to see that new "half gallon" is now only 45 ounces! I had to use a calculator to figure out the number of ounces because the carton is actually labeled as 1.4 liters, while its previous 56-ounce carton was 1.75 liters. Of course, the smaller carton was also selling at its \$3 sale price, which will go back to its regular price of \$5.29 tomorrow. According to my calculations, this is a 25 percent price increase at the \$5.29 price. Suffice it to say, that I will no longer be buying this brand of ice cream, regardless of its price.

Smart shoppers can save money if they are aware of actual unit costs and per-serving prices, in spite of 25 percent price increases on common items. This example illustrates the importance of comparing prices on a unit-price basis. Store brands may not only have lower prices, but they may have larger packaging, so be sure to use a calculator to compare relative sizes.

I also consider per-serving costs of many items. For example, my family eats fresh fruit on a regular basis and we like apples, oranges and bananas equally. I recently compared the cost of each of these items per piece, and was surprised at the price differences between each fruit. The cost of a large Golden Delicious apple at \$1.99 per pound is almost \$1 per apple. Because oranges are in season now, the cost of a large orange at my store is 50 cents. Bananas, the best bargain of all, came in at roughly 25 cents per banana year-round. These small price differences add up to major dollars over the course of the year.

In my family-of-four's case, if we each ate one banana per day instead of one Golden Delicious apple, we would save \$1,095 per year. Although we would be likely to vary our choices, this example proves that it is worth being familiar with the unit cost of products and the cost per serving of comparable food choices to keep our grocery bills in check.

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 Article Categories Food Nelson, Stephanie

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