Understanding Grocery Store Tags & Pricing

Photos taken 01/05/24 at Kroger grocery chain, CO

The minute you walk into your grocery store and start shopping the shelves, you will be inundated with numbers, prices, colorful sales stickers, and possibly a little confusion. It's important you understand how to properly read a grocery store tag, decipher its pricings, and "do the math" to walk out with the best deal for your budget. Realize up front when you purchase a product that best meets your needs, it may not always be the lowest price. Before you put any product in your cart, there are several things you need to ask yourself:

• Did I select what is required to get the sales price?

• How much (what size) do I need?

• Can I eat it all before it goes bad?

• Do I have the storage space?

• Am I paying for convenience and is that okay?

• Is it worth it?

UNDERSTANDING SALES SIGNS AND TAGS

Let's begin by taking a look at the three images above. The first picture is a BOGO sales sign (BOGO: Buy One Get One). This sign says if you buy one boneless pork tenderloin, you get another boneless pork tenderloin for free. This sounds like a great deal if you like to eat pork tenderloins and have the storage space at home to properly keep them until you can eat it all. What else does this sales tag tell us? It says the price of the pork is $4.99 per pound, that the second, or free item will be equal or lesser value, and the grocery store loyalty card is required. If you do not have a loyalty card at this store, your boneless pork tenderloin will be $4.99 per pound and you will not get a free one even if you buy two. What does equal or lesser value mean? If you put two pork tenderloins in your cart and one is priced at $13.18 and the other is $11.56, you will be charged the higher price of $13.18 and the lesser (cheaper) value of $11.56 will be taken off your receipt and given to you for free. Read all of the fine print with BOGO deals. Sometimes the second item is not free, but reduced in price (ex: Buy One Get One 50% off). It's still a sale/discount, but you'll need to determine if it's a good fit for your budget.

Let's take a look at the second tag. There is A LOT of information on it. What does it all mean? The top, white part of the tag is its normal, non-sale shelf price. This package of Naan bread dippers sells for $4.49. The good news is that if you have your loyalty card, you can purchase it today for the sales price of $3.99. Even better news is you can save another dollar if you are buying 4 more items of the Buy 5 Save $5 sale. The items associated with this sale will be located in your store's online (or paper) ads and marked with similar looking tags throughout the store. If you have to purchase four other items you do not like to eat or don't particularly need at the time to get the sales price of $2.99, this has now become a pointless and expensive endeavor. This is just another reason why you should check the ads before you shop.

The third tag tells us that once again using the store's loyalty card, you can purchase a regularly priced $6.99 take home pizza for $5.99 and the sales price is good through 1/16/24. If you walked in on a MONDAY ONLY, you could save even more with your loyalty card and purchase this brand's pizza, calzones, or flatbreads for $5.

Take the time to read the ads before you shop so you can purchase the items necessary to take advantage of in-store specials, carefully read the signs and tags at the store to make sure you are fulfilling all the requirements to get the sales price, and make note of prices or sales you may wish to pick up on your next visit.

TAKE TIME TO DO THE MATH

This next example is where "doing the math," can help you make smart choices for your bottom line and budget. Here, a 12oz package of coffee costs $8.49 and the unit cost is 70.8¢ per ounce (70.8 x 12oz = $8.49). This is such a helpful piece of information on the price tag!! You can see the unit cost of the 21oz bag is 69.0¢ per ounce. You will usually find the bigger the product, the cheaper per unit cost it becomes. Now, by asking all those questions above, you can determine if the larger product is the better buy for you. Let's break this example down a little bit more, because I think you might be surprised.

If we look at just the first two tags, what makes more sense for your budget: Do you buy two 12oz bags or do you buy one 21oz bag? If you purchase two 12oz bags, your cost at the register will be $16.98 (subtract $14.49 from $16.98 to determine the $2.49 difference in cost). You are paying $2.49 more for an additional 3oz (24oz - 21oz = 3oz) and those extra 3oz are now at a unit cost of 83.0¢ per ounce (divide 3 into $2.49 to determine unit cost for those 3oz). That's quite a bit more to pay. In this example, buying a single bag of the 21oz coffee, makes the most sense for your budget's bottom line. BUT! When you look at the sales tag on the 12oz bag, buying two bags at $6.59 is the much better deal! Your total at the register is now $13.18 for those bags of coffee, which is not only larger (now 24oz) than the 21oz bag, but also cheaper than the $14.49 cost of the 21oz bag. You can also see the unit cost of the 12oz bag decreased with the sales price as well.

If you drink coffee on the daily, two 12oz bags at the sales price are the best bang for your buck. If you don't drink coffee regularly, then one 12oz bag will be the best purchase for you. When there is no sale offered, the larger 21oz bag may cost more, but it's a better value per ounce than the smaller 12oz bag if you drink a lot of joe. You'll need to determine how much coffee you drink to decide between the two sizes and prices.

THE SOUR CREAM HEAD SCRATCHER--PAYING MORE FOR CONVENIENCE

When you get to the dairy case, you'll find there are many sizes and prices when it comes to sour cream. These price tags in the photos above just reflect the store brand and not the name brand, which not only costs more, but also has just as many sizes and prices to choose from. Let's start with the first price tag: 8oz sour cream 4/$5.00. This simply means you can buy four 8oz cartons for $5.00 or they are $1.25 each per the fine print. It's important to understand your responsibility as the consumer to receive the sales price when you encounter quantity/$X.XX, because in certain instances, you may have to buy all four containers to get the $5.00 price. For example, back in my retail days, our quantity/$ sales were always "2/$3.00 or $1.59 each." Meaning you had to buy two of the items to get the sales price of $3.00 and if you only bought one of the products, you would be charged $1.59 at the checkout, and not $1.50. You would be shocked how many people would double up on items they didn't need to get the "sales price." What a marketing ploy! In this instance, paying $1.59 for one product you need is always going to be cheaper than spending an additional $1.41 to get the $3.00 deal. Do you ever wonder why so many prices end with 99¢? It's because when you see the price tag of $13.99, it feels SO MUCH more inexpensive than seeing $14.00. We tend to only look at the numbers before the decimal point, not so much the ones after it, so $13.99 feels closer to $13.00 and not $14.00.

When you do the math on the sour cream prices, the 8oz containers are the worst bang for your buck. In fact, if you thought you were getting a quantity deal by purchasing multiples of this product, you would be SO wrong. Two 8oz containers at $1.25 each totals $2.50, when you can buy a single 16oz container for the lower price of $2.29. If you bought three 8oz containers, you'd be spending $3.75 at the checkout instead of the $2.99 shelf price of a single 24oz container. This is the real kicker though...if you bought four 8oz containers for $5.00, you could have paid 49¢ more for the 48oz container on the shelf and received 16 extra ounces of sour cream!! Take the time to do the math and only buy more when it works with your budget and if you can properly store or eat the product before it goes bad.

Now jump over to the third image. Do you see the colored price? Did you think it was on sale? It's not. Even though Kroger's sales tags use the color combination of yellow and red to bring attention to sale items, this particular tag means "locked-in pricing." This is the "low" price of this product (and according to employee posts I’ve found online, usually means the product has just gone through a price increase!). Just remember it's the store that determines prices and they are using all the marketing tricks in the books to make consumers buy things. This color tool may make you think this product is on sale and even though you don't need it or it's not on your list, the store wants you to think you're getting a great deal and for you to put it in your cart. Don't fall for in-store "specials" or "tricks." Check the ads, make a list, read the fine print, and don't be fooled!

Finally, going back to the sour cream images above, why is 12oz of sour cream more expensive than 16oz of sour cream? In this case, it's because you are paying for the packaging and convenience of a squeeze bottle. The squeeze bottle costs the company more to make and package than their normal tubs, and this cost is passed along to the customer. The store also can raise the price on this item and sell it for more because of the convenience it gives to the customer. If you hate grabbing a spoon to dish out sour cream, it might be worth it to you to spend more for a specialty container that dispenses your sour cream exactly as you like it. Don't believe me? Compare prices of jelly and other condiments in their squeeze bottles vs. regular jars the next time you're at the store. Or how much they are charging you for a pre-diced onion vs. a whole one you chop up at home. Convenience costs!

Do a deeper dive the next time you are grocery shopping and be mindful of the price tags. Take the time to "do the math" and ask yourself the questions above. You'll save money in the long run and be a better, more informed shopper if you do. Now simmer down, pull up that calculator app, and get to the store! xx