Is It Smarter to Buy in Bulk, or Buy Only When You Need Something?

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When you see a good price on an item used in your household, you buy a bunch and stock up, right? Actually, more and more consumers are saying no to bulk buying, picking up only what they need now and for the near future instead. The result is slim pickings in the pantry, but more cash—because in today’s economy, there’s a good chance at some point you’ll need that more than two years’ worth of paper towels.

The WSJ reports on the rise of what it’s calling the “just-in time consumer.” This is a person who shops frequently and, regardless of the whether the goods are on sale or not, only buys necessities for the foreseeable future:

For over two decades, Americans bought big, bought more and stocked up, confident that bulk shopping, often on credit, provided the best value for their money. But the long recession—with its high unemployment, plummeting home values and depleted savings accounts—altered the way many people think about the future. Manufacturers and retailers report that people are buying less, more frequently, and are determined to keep cash on hand.

According to a survey cited in the story, in 2006 the average household stocked 404 items in its pantry, as well as the medicine cabinet and cosmetic bags. Today, the average is down to 369. That still sounds like a lot—which is probably why it’s smart for consumers to scale back on how they’ve been stocking up in the past.

The question is: Why consumer is smarter, thriftier, all-in-all frugalier? Is it the consumer who hits up BJ’s or Costco and loads up an SUV-sized shopping cart (or three) with enough cereal, canned goods, and toilet paper to survive the apocalypse in an underground bunker? (They sell those too at these warehouse stores; they’re way in the back and you have to ask for them.) Or is it this new “just-in time” consumer (which really isn’t a new concept at all, more like a throwback to the pre-Costco times) who shops when something is needed, and whose bank account is better stocked than his pantry?

There are pros and cons for both approaches. On the one hand, I’ll almost always prefer the option that requires the fewest number of shopping excursions. That’d mean the BJ’s-type stocker-upper, of course. The problem is that many people I know who utilize the stock-up method aren’t the types to shop only occasionally. They’re out in the stores frequently, and when they see a good price on Frosted Flakes, they clear the shelf—even though they already have a shelf’s worth of the stuff at home. Their bulk-buying has their pantries bursting at the seams, and yet they don’t know when to stop.

On the other hand, I hate being nickel and dimed, and that’s basically what happens when you overpay picking up goods in smaller packages with higher per-unit prices. More of your money is paying for packaging, rather than the actual stuff inside. Also, when you wait for the last minute and only buy goods when you need them, you’re far less likely to shop around—because you need it and don’t have the time.

As I see it, the scaled-back “just-in time” consumer is a reaction to the over-the-top hoarder mentality practiced in recent years when bigger always seemed better and shoppers rarely turned away from the concept of more, more, more. Within reason, however, stocking up on items that you know will get used, and that you know are being sold at a good price, simply makes sense for the sake of convenience and your finances.

Remember how the story of the Ant and the Grasshopper went? The Grasshopper was something of a just-in-time consumer, having fun and never planning for much of anything down the line. He wound up hungry that winter. The Ant, by contrast, demonstrated wisdom and foresight by stocking up on a winter’s worth of food. Take note that the Ant didn’t go overboard: He only worked to save up enough food to provide for one winter—not for three years, and not to fill up an underground bunker.