Supermarkets are increasingly charging customers for fresh produce by the item, rather than by weight, in a strategy that is leading to “wild volatility” in pricing with some items more than 50% more expensive, new analysis shows.
A Sydney-based data analyst who compared the “per each” price online with the actual “per kilo” shelf price of 15 fruits and vegetables at their local Woolworths store found the price variations were “completely arbitrary”.
The analyst, who asked not to be identified because of their employment, said the findings proved the pricing strategy was a “massive transparency failure” for consumers.
Woolworths still uses weight-based pricing for most fruits and vegetables in-store – with a few items such as avocados and mangoes an exception – but when it sells groceries online it prices fresh produce items individually.
Coles has started trialling an expansion of per-each prices for fresh produce in some stores, telling customers the move is “aimed at giving you clarity on exactly what you will pay at the checkout”.
However, because supermarkets are not required to display a per-kilo price, or even the average weight of items, shoppers are unlikely to know whether they’re actually getting a good deal when paying a set price per item.
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The analyst said they wanted to test if the shift to pricing produce by each piece rather than weight was fair for consumers, and their results proved the current regulations should be reviewed.
‘Capsicum paradox’
Unless a customer did complex maths on the spot, they wouldn’t know if they were being “ripped off” by the “per each” price, the analysis found.
In the most striking example, which the analyst called the “capsicum paradox”, Woolworths charged 51% more for green capsicums when priced individually compared with when they were priced by weight.
Most shoppers wouldn’t realise they were paying nearly $15/kg for a vegetable they could get for $9.90/kg on the shelf, the analyst said.
The green capsicums cost $9.90/kg in store and $2.48 each online.
But when the analyst calculated an effective price per kilo by dividing the online item price by the average weight of each item they found in store, the capsicums turned out to be far more expensive when priced “per each”.
In order to calculate the average weight of each item, the analyst weighed five randomly chosen pieces of each fruit or vegetable – apart from broccoli, which they used two heads of, in a Sydney Woolworths, then divided the total by the number of pieces.
They reviewed the “per each” price for the same produce on the same day from the Woolworths website, with the same store in Sydney selected as the pickup point.
Red washed potatoes, mandarins, limes and carrots were all more expensive when priced per individual piece than weighed, with the potatoes 30% more expensive at their “per each” price.
Conversely, broccoli, brown and red onions, red chillis, red capsicums, black plums, apricots, bananas and truss tomatoes were all cheaper “per each” than when priced by weight.
The broccoli and brown onions were respectively 43% and 39% cheaper at their “per each” prices compared with their per-kilo price in store.
Push to close ‘loopholes’ in pricing rules
Under the existing rules, the major supermarkets can price fruit and vegetables “per each” or “per kilo”, whether they are packaged or loose.
“It’s a big loophole and as long as it exists the big supermarkets are going to use it because it’s legal,” the analyst said.
“The lack of transparency means that consumers cannot make a better decision as to how they spend their money in terms of whether they’re getting value for their money or not.”
The analyst said they were also concerned “per each” pricing could facilitate so-called shrinkflation, because retailers could source smaller pieces of produce while maintaining the same price.
Ian Jarratt, from the Queensland Consumers Association, said the trade measurement legislation and unit pricing code – which regulate how grocery prices are set – should be amended to reduce, or remove, the ability of retailers to price fruit and vegetables only per piece.
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“To help shoppers make quick, easy and accurate price comparisons within a product type and between types, prices should be shown and charged per kilo,” said Jarratt.
“If retailers want to provide an estimated price per piece and the average weight, this should be in addition to the price per kilo that will be charged, and should be displayed less prominently than the price per kilo.”
The unit pricing code, which is overseen by the Australian Competition and Consumer Commission (ACCC), recommends that retailers using “per each” prices also display unit pricing – the average weight of the item and the per kilogram price.
But this is only a “tip” or “best practice suggestion” – it is not mandatory.
An ACCC spokesperson said the regulator had acknowledged in its final report from its supermarkets inquiry that there “is scope to improve unit pricing including through the use of consistent units of measure”.
Bea Sherwood, a senior policy adviser at Choice, said the consumer advocacy group had received mixed feedback from shoppers on “per each” pricing; some really liked it and others didn’t.
Nevertheless, Sherwood said supermarkets should use consistent unit pricing – such as per kilo for fruits and vegetables.
“As long as we’ve got that baseline that everything is referred to by per-kilogram pricing that would be the most useful for consumers to determine prices,” she said.
A Woolworths spokespersons said customers were generally looking to order a specific number of pieces of fruits or vegetables, especially when shopping online.
“To cater to this demand, we provide prices per piece to make their shop easier,” they said. “We don’t currently have any plans to change how we price our fresh fruit and vegetables in-store.”
They said Woolworths regularly adjusted its online prices to reflect “market pricing and per kilo pricing in-store” but “we do recognise there will sometimes be small discrepancies if comparing per piece to in-store per kilo pricing”.
A Coles spokesperson said its trial involved pricing apples per unit rather than by weight, like how it priced other loose items such as lemons and limes.
“We want to understand whether per-unit pricing makes shopping easier and we welcome feedback from our customers,” they said. “The trial is ongoing.”
The Albanese government has committed to strengthening some aspects of the unit pricing code but has not announced any reforms to “per each” pricing.
Announcing plans for separate reforms earlier in the week, the assistant competition minister, Andrew Leigh, said “supermarket prices shouldn’t be a guessing game.”
Leigh was contacted for comment.
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