The End of Pantry Loading As We Know It
Just-in-time is a familiar methodology, designed to keep cash flowing and stock levels manageable. It has been used across the supply chain for years. More recently, consumers have been getting in on the act. For some, the new normal means putting pennies into piggy banks rather than pantries to achieve maximum spending flexibility.
Manufacturers and retailers are responding by adjusting pack sizes, according to The Wall Street Journal, which reported, "Executives peddling wares from canned goods to cashmere say the shift in consumption habits is prompting them to change how they produce, package, price and deliver their goods."
Revised demand adds to pressure on companies that have already noticed lower sales volumes due to "what some dub 'pantry de-loading'." A recent SymphonyIRI survey revealed that, over the past two years, the number of items kept in American pantries has fallen about 20 percent. The range stocked by average households has also gone down from 404 "unique items in medicine cabinets, pantries and cosmetics bags" in 2006 to 369 this year.
Procter & Gamble, which has been tracking consumers' pantries since mid-2008, found "about one-third of consumers are changing their pantry levels, with about 75 percent of those cutting back on inventory."
Less stocking up and more just-in-time buying in pursuit of frugality has also affected club stores, "the ultimate pantry-filling destinations" whose low prices are available only with bulk purchases. The Journal says Costco and BJ's are amongst those reporting increased shopping trip frequency and decreased transaction sizes.
"This concept that club stores are only for the stock-up visit -- I don't think that's true anymore," said Bruce Graham, BJ's senior vice president of food.
As far as clothes are concerned, Mike Berry, director of industry research for MasterCard Advisors SpendingPulse, explained that, "from 2003 to 2008, women's apparel sales tended to peak in September." This fall, however, that changed while summer dresses will arrive at online retailer Net-a-Porter in April or May next year instead of their typical February delivery.
Discussion Questions: Does it make sense that there is a decline in bulk buying in the U.S? Do you see it as a long-term trend and how should retailers and CPG suppliers respond?