Shopper's Dilemma: Is More Better?

Fast Retailing, the Japanese company that's been getting a lot of attention lately for its cheap but trendy clothing, raises the classic shopper's dilemma: Is it better to buy fewer, more expensive items, or a larger selection of cheaper ones?

Fast Retailing, which is expanding its brand of Uniqlo stores, hopes most of us will choose the latter option. I got to know the store well when I lived in Tokyo eight years ago. As an entry-level employee on a relatively tight salary, I stocked up on Uniqlo trousers, button-downs, and jackets, most of which cost $20 or less. While they weren't the most fashionable items I ever purchased, most of them served their purpose as appropriate work attire and lasted me at least a few years.

As Uniqlo extends its global reach—it already has a store in Manhattan and will soon open one in Paris—it will find itself up against other brands that model themselves on a similar concept of "cheap chic." H&M, Zara, and even the Gap already compete in that space. In theory, these stores benefit during tight times, because consumers who are cutting back will forgo pricier options such as Banana Republic or Barney's Co-Op in favor of less expensive substitutes. But the cheaper retailers haven't, in fact, thrived during the recession. H&M recently announced disappointing August sales and the Gap has been fighting sluggish sales since the recession began.

I wonder if something else is going on: As consumers cut back, they realize they don't want to fill their closets with cheap clothes, but prefer to simplify and own fewer items overall. Perhaps a few new purchases each season is more economical then replacing an entire wardrobe, even with cheap outfits. If that's the case, then stores such as Uniqlo will have to make sure they sell some items that stand out as desirable pieces, and not just because of their price tag.

Are you shopping less overall, or just going for cheaper pieces? Does a store like Uniqlo appeal to you?