What toilet paper sales tell us about consumer spending

The parking lot at a Costco in suburban Minneapolis is a traffic jam of shopping carts and cars. A guy walks out with furnace air filters and a bouquet of roses. One woman pushes an incredible amount of juice and, of course, one rotisserie chicken. And a curious number of people cradle nothing but a single, 30-roll pack of Kirkland toilet paper.

“$20.99. It was three dollars off,” said Vangie Krueger, who came today just for the sale.

Krueger said with prices going up, she’s shopping around. So is Kirsten Halloran, who goes to ALDI for produce, Trader Joe’s for frozen food and Costco for paper products. She has that same giant pack of Kirkland toilet paper in her cart.

“When you see brand name just being, like, double, then I will look to the store brand and just pick that up,” she said.

The brand name at this store is Charmin and it goes for $29.99, which is $12 more than the store brand. Still, Rick Sumrall paid the premium. He did not buy the Kirkland brand.

“Oh no, my wife vetoed that,” he laughed. “Personal preference, I’ll put it that way.”

Personal preference is indeed personal, especially when it comes to products as mundane and intimate as toilet paper. It’s why Michael Collins, a professor of household finance at the University of Wisconsin - Madison, has actually researched toilet paper purchasing patterns.

“You know, there’s very few goods that we can come across where people have consistently standardized preferences and demand for a product,” said Collins. “And more importantly they don’t have substitutes.”

Something like butter, which is perishable, can be swapped for margarine or cooking oil. But everyone — maybe minus bidet people — needs toilet paper, which means it can be used to measure how people are spending in the economy.

“People are pretty willing to move around in different products. People will pretty quickly shift to an alternative that meets their price point,” said Collins.

Collins studied nine years of scanner data to understand when people buy more or less toilet paper or change brands. And he found that when people are feeling flush, say right after tax season, they buy 20% more. Meanwhile, when money is tight, they buy cheaper toilet paper, and buy less of it.

“We heard a lot about that during the Great Financial Crisis for sure,” said Erin Lash, a consumer equity research analyst at Morningstar.

Lash, who’s been working in the household goods space for nearly 20 years, said companies kept a smaller inventory of toilet paper because consumers were buying less of it. People were counting squares.

“Trying to get more out of the products they are using on a daily basis,” she said.

Today, during this inflationary-but-not-recessionary period, consumers are sending some mixed signals. Corporate earnings reports show people are buying less toilet paper, but sticking to their favorite, more expensive brands.

“Actually it was being cited as an opportunity for firms that sell more premium type products,” Lash said.

It could reflect an economy where people have jobs, so they can still buy the products they like. But because of inflation, budgets are tight, and they’re buying less. If at some point people start trading down, it could be a sign that consumers are shifting what they’re spending.

Household finance professor Michael Collins argues toilet paper is more than an economic indicator. In some ways, it’s a symbol of how frustrating it can be to live in today’s economy.

“The issue of how people feel, I think, is an important one. Because even though I might be able to, quote-unquote, afford that high quality product that I’m used to having, the fact that it’s price goes up, it does make people feel like they’re making sacrifices.”