## Penny Pinching at the Grocery Store

When I’m at the grocery store, I almost always compare the prices of different sized packages.  How much less per oz does it cost when I buy twice as much?  Sometimes the price is notably different.  Usually the cost gets cheaper when I buy more.  Here are some quick numbers I pulled from Target about Cheetos.

 Cheetos Data OZ Price \$/oz 2.375 1 0.42 3.7 1.49 0.40 8.5 3.39 0.40 17.5 3.99 0.23

Sure enough, as I commit to more Cheetos, the price per oz decreases. This is almost always true! Except when it isn’t. Imagine two sizes of flour: an 8oz and a 16oz.  When the smaller bag costs \$2.99 and the larger costs \$5.99:

In this situation, you are saving exactly 1 penny if you buy two small bags instead of one large bag. Maybe this isn’t enough to make you change your habits, but I always buy 2 packages of the smaller product when I see this. Always. I’m sure some of you have done this too! Because a penny saved is a penny I have righteously stolen from the grocery store which so vilely priced their products ridiculously!

Actually, I can’t decide if I feel exceptionally clever when I do this… or like I’ve just wasted 5 second of my life over optimizing something trivial.  The opportunity cost of those 5 seconds is surely worth more than a penny? Right?

Well, let’s find out.  If I managed to earn 1 cent every 5 seconds, I would be earning \$7.20/hour.  Not bad! But not great.  So maybe it’s not the worst thing to do while I shop.

Now, my dear reader, I have to share with you that this post came out of personal experience.  Yesterday my dad just bought 2 bags of chocolate chips, instead of one, to save a penny. And then he wrote an email to the rest of the family to tell us about it. Does your dad do that too? In his mind: The time spent on the consideration of this penny does not increase the time spent shopping …and he’s going to think about something anyway. So perhaps he is right. It’s a penny saved with zero opportunity cost! And that’s a magical thing by itself. And how often can you say your grocery trip was magical?

But, in all reality, despite the original effort resulting monetary benefit… the accounting of the event is probably not worth much. So now that I have spent time writing emails to my father and even more additional time writing a blog post to you? What have we gained from that effort? Well, maybe we all feel just a little bit better every time we gleefully pick up two tiny packages that magically cost less than the larger version of the same thing.