It's also interesting to note that in food stuff items it's often the packaging that drives the cost. Cereal and soft drinks come to mind. That's why cost per ounce is lower in the larger box.
Then there are "loss leaders"... products on which the store may actually loose money just to get you in the door. A liter of Coke is often 99 cents, (loss leader) while a 20 oz cold one is $1.50 in the cooler by the register. Remember the Radio Shack battery of the month club?
A friend of mine has a "Little Debbie" distributor route. One of his competitors had a sign that said "25 cents, or 4 for $1.00" so my friend "matches his price" and sure enough, sales go up!
Go figure. Or maybe not.