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Published: May 16, 2008 12:30 AM
Modified: May 16, 2008 02:42 AM
 

Pantries pinched

Super-sizing is out; consumers are shopping for smaller packages in groceries

NEW YORK - Shoppers have been lugging ever-larger products to their ever-bigger cars for years. Now, more of them are feeling so pinched by the sagging economy that they are embracing a new behavior: buying a little at a time.

From meat to mustard, consumers are trying to control their food bills by buying smaller items as they grapple with soaring prices. Companies have taken note, experimenting with different measures like 3/4-gallon milk jugs and pies that have shrunk to 6 inches.

"I don't stockpile any more," said Lorraine Woodcheke, a publicist from San Francisco, who in January started buying smaller containers of soy milk, olive oil and fresh-cut fruit to control her budget. "I don't have a pantry that is overflowing. I can't justify letting food go bad the way I used to."

Data from research company The Nielsen Co. and retailers including BJs Wholesale Club that sell fuel show that downsizing is even occurring at the pump, with drivers limiting how much they fill their tank to avoid getting hit with a hefty payment at one time.

While plenty of shoppers are still buying in bulk, helping boost sales at warehouse club operators such as Costco, the growing trend of buying in bits is the latest sign of how cash-strapped people are.

Part of it may be psychological: Consumers can't adjust to having to pay $60 at once to fill their gas tank, or spend $150 on the weekly food bill. Many are also more conscious of being wasteful: throwing out milk when it was $3 per gallon may not be a big deal, but it's another matter when it's $4.

Some consumer advocates warn that the smaller packages are a way for food makers to pass on the increase in ingredient costs. And even if buying smaller means buying more often -- and not saving money in the long run -- many shoppers feel they don't have a choice.

Food prices rose 4.4 percent over the past 12 months, with prices for basic items shooting up even more: Bread is up 14.7 percent, and milk is up 13.3 percent over the past year, according to the latest Consumer Price Index. Gas could reach more than $4 per gallon on average this summer.

When the option is available, customers are now favoring smaller sizes in items that have had significant price increases such as cooking oil, said Karen Meleta, a spokeswoman at Wakefern Food, a retailer-owned cooperative that operates 200 stores under ShopRite and PriceRite in seven Northeastern states. But she did say that consumers continue to buy bulk on other items.

1970s repeat

The last time consumers were buying a little at a time to conserve cash was in the 1970s, when food and oil prices surged to record highs, said Burt P. Flickinger III, managing director of Strategic Resource Group, a retail consulting firm.

"Consumers are constraining spending to a point that shoppers only buy what they need for today or tomorrow and not next week or next month," he said.

The world's largest retailer, Wal-Mart, is adjusting its product mix to respond to the trend.

Wal-Mart is making sure it has more smaller sizes of items such as pasta, condiments such as mustard as well as single rolls of toilet paper on hand in the days before people receive government checks for Social Security and public assistance that arrive at the beginning of the month, said spokesman John Simley. But after payday, the discounter stocks up on bulk items because consumers have enough money to buy bigger sizes that can last longer.

Kroger, the nation's largest traditional grocery chain, is testing 3/4 gallons of milk under its store brand -- a rarity amid the usual half- and full gallon sizes -- while bottlers for PepsiCo and Coca-Cola are experimenting with a 16-ounce soda bottle as an alternative to the 20-ounce size.

Sara Lee is expanding its Simple Sweets line, introduced last year, that features 6-inch pies that sell for $2.50 to $2.99 and serve three or four. That compares to the traditional 9-inch versions that sell for about $5 and serve six to eight.

"The value of not wasting is becoming more and more important," said Chuck Hemingway, marketing director of Sara Lee's food and beverage division.

Food companies say the new sizes are priced the same per ounce as the bulkier versions. However, Edgar Dworsky, the founder of Consumer World, an online consumer education guide, warns that many companies, including ice cream and margarine makers, are slimming down products so they can pass along soaring dairy prices and other costs.

Some food and beverage makers say the initial catalyst for offering smaller sizes was to target "empty nesters" -- aging boomers whose children were leaving the home. But the harsh economy has now accelerated those plans.

"Clearly, gasoline prices are having an impact on a lot of people," said Lauren Steele, with Coca-Cola Bottling Co. Consolidated. Steele said the smaller sizes are resonating with shoppers.

Customers are buying less gas per trip, even credit card customers, said Jeff Lenard, spokesman for the National Association of Convenience Stores, which represents 80 percent of the gas sold in the U.S.

"The new sticker shock is the fill-up price, not the price per gallon," he said.

WANT LESS OF THAT?

To soften the sticker shock, people are starting to change their buying habits, and some companies are responding.

Among the smaller offerings:

* 16-ounce bottles of Coke, replacing the 20-ounce size. Coca-Cola Bottling Co. Consolidated introduced the change last fall in 64 convenience stores in North and South Carolina. The 16-ounce bottles are 99 cents. It's expanding the test to 1,700 stores in the southwestern part of Virginia.

* 3/4 gallons of milk at Kroger. The chain began testing the new size under its store brand in 77 stores in Cincinnati and Northern Kentucky. At one Cincinnati store, the new size was priced at $2.49, while the gallon was priced at $2.80.

* 6-inch pies from Sara Lee that sell for $2.50 to $2.99

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