Frugal consumers push companies to embrace new age of thrift
In an attempt to cash-in on this new sensibility, businesses are keen on promoting their products as a good deal. That's why, for example, Clorox Co. isn't raising prices on its improved trash can liners and Campbell Soup Co. has reduced the promotional price of its V8 brand vegetable juice by 17%, according to the Wall Street Journal (subscription required).
Other corporate-marketing efforts at wooing penny-pinching shoppers include double cheeseburgers for $1 at Burger King restaurants and McDonald's plan to begin offering a dollar menu at breakfast starting in January, the newspaper noted.
Household-products giant Procter & Gamble said in September it was cutting prices on 10% of its global product lines, such as a 13% reduction in the price of its Cheer laundry detergent. And P&G now markets Cheer as a bargain brand. The company also said it would ramp up promotions that emphasize value and introduce new products, such as a lower cost version of its Tide laundry detergent, the market leader.
All these moves come as Americans become increasingly skeptical that economic recovery truly is on the way. Though there have been positive reports about an improving housing market and increased auto sales, other news, such as Friday's Labor Department report that showed the nation's unemployment rate jumped to 10.2% last month, have given consumers reason to pause.
Fear of further job losses, combined with skimpy wage increases and a decreased sense of wealth many homeowners feel thanks to falling home values, are forcing many Americans to further tighten already pinched budgets. A recent Conference Board report showed its index of consumer confidence slipped nearly 6 points in October, following a smaller decline in September.
Americans' hesitancy to spend was also evident in recent reports from many retailers, which showed sluggish sales heading into the all-important holiday-buying season. Trendy clothier Aeropostale, for example, said sales at its shops rose by just 3% last month, well off the near-14% climb analysts had anticipated.
It all comes back to getting a good deal, and likely the reason a new holiday poll of consumers by consulting-firm Deloitte showed 74% intend to buy items on sale and 54% intend to use more coupons, the Journal reported.
That's a trend a bevy of retailers have already discovered, including Walmart and Sears, which have already begun sales based on the theme of Black Friday, the all-important sales day after Thanksgiving that many stores reserve for the best bargains.
With so many companies competing for a portion of the fewer dollars in consumers' constricted budgets, there is one bit of certainty: those with some money to spend this holiday season will likely see some of the best bargains in years.