12/07/2012

Why are Shopping Carts Getting Bigger?


This article takes a look at several reasons for the increasing size of grocery carts.  There are a few theories that proved interesting.  The first theory discussed comes from the viewpoint of behavioral economics.  The theory is that by increasing the size of the grocery carts, stores are able to establish a consumption norm consistent with the size of the cart.  In other words, grocery stores are attempting to influence consumer consumption habits.  Another explanation is that as more women enter the labor market, fewer trips are being made to the grocery store.  This has the effect of increasing the number of items purchased in a single trip.  A third explanation is that they were always too small.

I tend to believe that the carts are larger to accommodate bulk purchase items.  As the article points out, superstores have a few advantages when it comes to bulk items.  They have lower costs because of favorable economies of scale.  They also have monopsony power when brokering deals with suppliers.  Stores like Costco and Sam’s Club have discovered that they are able to target price-sensitive customers by offering items in bulk.  Wal-Mart and other superstores have also found that bulk items are an effective means of implementing price discrimination.  By offering bulk items, stores are able to offer a lower price per unit in exchange for greater sales volume.  This allows them to charge two different prices for the same item.  Ultimately, by increasing cart sizes to accommodate bulk items, stores are more efficiently meeting their customers' needs.

10 comments:

Patrick said...

I've never really paid that much attention to grocery cart sizes or how they've become bigger over the years. I agree with Tyler that it has a lot to do with superstores like Costco and Wal-Mart where people buy in bulk. Additionally, people will do the majority of their shopping at one store now. Twenty years ago you would shop for groceries at one store, and other items like office supplies or electronics at a different store, but now most people will buy everything in one stop at Wal-Mart or Costco.

madhatter said...

What, I’ve been using the carts all wrong? I thought they were for me to sit in while my significant other pushed me up and down the aisles, so I could go on grabbing whatever looked good. (Yes, I do act like a five year old sometimes.)

I think Tyler is right, when he mentions the purchase of bulk items as incentive for larger carts. Even at Harman’s they have bulk specials that require larger shopping carts. I can remember normal sized carts piled above the side rails and stuffed full in the bottom rack, with just a one week supply of groceries for a family of six. Bulk sales would definitely require more room than a normal sized grocery cart.

Dave Tufte said...

Tyler: 94/100 (your title is a question).
Patrick: 50/50
madhatter: 50/50

The only thing I would add to Tyler's post (or the two comments) is that I think his second paragraph is actually an example of the first argument from the first paragraph.

But ... let me take you in a completely different direction. Retailers are, in part, warehouses. And homes are, in part, warehouses. When we shop we are choosing to not keep the 5 pound bag of sugar at the store, and to keep it at home. The cart size is an indicator of our willingness to warehouse at home.

And why would be more willing to do our warehousing at home? Because our homes have gotten larger and our households have gotten smaller. Space to warehouse stuff it home is at record low levels, and acting on that might necessitate bigger carts.

Dave Tufte said...

Oops ... "record high levels" not "record low levels".

Matt Walter said...
This comment has been removed by the author.
Matt Walter said...

Not one item in the original article, response, or comments answers the question of why shopping carts are getting larger.

The answer is simple. Shopping carts are generally larger than they were 20 years ago because the average consumer needs more space to hold products, retailers can now accommodate larger 'vehicles' in the aisle, and some businesses think more money will be spent by encouraging consumers to utilize cart real estate.

A great illustration of cart size is the small town H&R Tru-Value Hardware store located in Panguitch Utah. The store carries thousands of products, but is extremely small and expensive. The aisles are about 3 feet wide, and very unorganized. Most people generally shop there when they need to purchase one or two must have items that they forgot to purchase in Cedar City or Richfield.

The carts are 1/3rd the size of most grocery or home improvement stores because a larger cart wont fit in the aisle, people typically do not purchase very many products, and the owner is already maximizing the largest cart size possible to facilitate impulse buying.

Dave Tufte said...

Matt Walter: 47/50 ("wont")

Why "... the average consumer needs more space to hold products ..."? More products means either more space to store them at home (covered in my earlier comment) or fewer shopping trips (each one is has fixed and sunk costs associated with it, so reducing the number of trips is probably always welfare improving).

Why would it matter if "... retailers can now accommodate larger 'vehicles' in the aisle ..."? Is this a cause or an effect? If it's an effect, then it doesn't matter to the original argument. If it's a cause, you'd need to justify why store managers would think this would be helpful.

Now, "... some businesses think more money will be spent by encouraging consumers to utilize cart real estate" has more going for it. Psychologist call this framing: give someone a bigger cart and they'll fill it.

Aicha435 said...

I'm not sure I necessarily believe that women entering the workforce has significantly changed household shopping in recent years. I can only speak from personal experience, but when I started a full time job and went back to school, our household shopping habits did not change. We still only grocery shop once a week, but the responsibility shifted from me to my significant other. Most consumers are aware with each trip to the store there is a greater chance of spending money on impulse buys, so they adjust their shopping habits accordingly.

I do have to agree with Tyler that increased cart size is, in part, due to an increase in items purchased during a single trip or buying in bulk; however, the causes for this change could be many. I think the other point he brought up, how "stores are able to establish a consumption norm consistent with the size of the cart" is equally valid. According to the original article, if stores have figured that larger shopping carts translate into higher sales volumes, it would prove beneficial for producers to make the switch to bigger carts.

Emma182 said...

I thought the idea of giving consumers a larger cart so they can buy more was very interesting, but what about stores such as Joann’s, Michael’s or the Dollar stores that have really small carts and only a few average sized carts (if any). Does this mean these stores want consumers to purchase less than other stores? Personally, I don’t think so, but if behavioral economics shows that consumers buy more when given bigger carts, then why are these stores not upgrading?

Dave Tufte said...

Aicha435: 50/50
Emma182: 50/50

Hopefully, I'm going to steer the conversation a little.

The idea that "stores are able to establish a consumption norm consistent with the size of the cart" is one of those things that sounds high-falutin', but doesn't make much sense.

The norm is defined by the ability of people to store things in their homes. Big homes with lots of storage space came first, followed by bigger carts. This is also why the carts tend to be smaller at groceries in central urban areas.

Anything about establishing a norm could quite possibly be true, but it's secondary or tertiary to this point.

But ... Emma182's point is interesting. My guess is that while people may have a ton of space at home to store craft items, that they don't actually buy much of them. This is a seat-of-the-pants argument, but I think even a "crafty" household still probably makes twice as many trips to the grocery store and buys several times more volume of stuff there each trip.