Grocery Gimmicks: Why It Doesn't Pay to Buy Bulk

Remember when Seinfeld's Kramer went shopping at the Price Club and came home "loaded up, baby." A 4-pound can of black olives. A 48-pack of Eggo waffles. A gallon of barbecue sauce. Ten pounds of cocktail meatballs.

"This isn't for a person," Jerry told him. "This is for Biosphere 3."

To actually use everything he bought, Kramer ended up feeding his overstock of Beef-A-Reeno to the carriage horse Rusty, which experienced tail lifting results. Kramer's bulk buy ended up in disaster.

OK, that's a TV comedy. Still, buying more than you need and either over consuming or wasting has long been an issue for shoppers at bulk stores, though these stores undeniably offer great deals priced by the unit. But now bulk deals are coming to your local grocer too, and here they really do not pay.

According to The New York Times, retailers are feeling the pinch of the weak economy and trying to entice shoppers to buy more than what's on their list through what appear to be compelling volume offers. Says The Times:

"The old gimmick - buy one, get one free - has been expanded to include some pricing equations worthy of Isaac Newton, or at least of middle-school math class. Using buying patterns detected from loyalty cards, receipts and other research, grocery chains are searching for the multiples sweet spot: The current Pathmark circular advertises Bush's baked beans at three for $5 and Yoplait yogurt at 10 for $6. At Cub Foods, Sprite 12-packs are on sale at three for $11.97. Kroger has lemonade, socks and Kroger gummi bears candy on sale at 10 for $10."

These may sound like great buys. But what the store doesn't tell you, unless you ask, is that you can get the same price per unit no matter how many you buy. Those gummi bear packs at 10 for $10? You can buy three for $3. How many kids do you have? How rich do you want to make their dentist?

It's all about the power of suggestion. Buying in volume feels like a deal. So many consumers go for the marketing gimmick without checking to see if they are getting a true discount. Some retailers report that when they try the more honest approach -- $1 for each item, no matter how many you buy -- the store experiences dramatic revenue declines.

Evidently high gas prices have folks shopping less often, and to save money people are sticking to their lists. Bravo! This frugal (and wise) behavior is what's driving the fake-bulk deals. As The Times writes:

"Unemployment, rising gas prices and more expensive food have 'put a tremendous amount of pressure on consumers, who have become extremely value driven, budget minded, list minded, less impulsive and very deal oriented,' said Bill Melnick, director for strategic planning at SAI Marketing, which studies consumer behavior for brands like Dole. 'In order to get someone to buy something that wasn't on the list or to get them to buy more of what's already on the list, there has to be some incentive to get them to move outside their typical behavior.'"

Don't fall for it. A list is your best friend at the store; it's also dollar-wise to grocery shop less often, choosing instead to eat what you have in the pantry. And in case you're tempted to reach for the bulk buy in the big aisle display think about it this way. As The Times concludes:

"In pushing the envelope as far as possible, grocers sometimes come up with multiples that are just too far-fetched for ordinary shoppers. 'There have been things in the past we've tried, like buy 20 yogurts for $10,' Mr. O'Boyle said. 'Unless you're someone who eats two or three yogurts a day, you're going to start to back up on that.'"

And then you not only didn't get any real savings; you may end up throwing some of the stuff away to boot.

Photo courtesy Flickr user 29143375@N05
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Dan Kadlec

Daniel J. Kadlec is an author and journalist whose work appears regularly in Time and Money magazines. He is the former editor of Time’s Generations section, which was written and edited for boomers. Kadlec came to Time from USA Today, where he was the creator and author of the daily column Street Talk, which anchored the newspaper's business coverage. He has co-written three books, including, most recently, With Purpose: Going from Success to Significance in Work and Life. He has won a New York Press Club award and a National Headliner Award for columns on the economy and investing.

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