Consumers in tough economy enticed by value, Citi Investment analyst says
NEW YORK Retailers who are chasing that value-oriented consumer across the store are best positioned to profit in this tough economic environment, reported Citi Investment Research analyst Deborah Weinswig in a research note Tuesday.
“Consumers are changing their shopping behavior to adapt to the current economic environment, and Nielsen data has shown that consumers are shifting to value channels, buying more private label products and increasing their coupon usage,” she said. “We believe that the retailers who cater to this value-focused consumer through low prices and targeted promotions are best-positioned to drive sales and gain market share in this environment.”
That bodes well for retailers who traditionally chase after that savings-conscious consumer, such as super centers and dollar stores—two channels that experienced an increase in foot traffic in the third quarter of 2008. And it ought to have meant good tidings for channels like drug stores and clubs as well, thanks to either the convenience position in the marketplace or, as is the case with club stores, the potential of buying bulk at a significant per-unit cost savings. However, while both the drug and club channels realized higher foot traffic in the third quarter, that traffic spiraled negative for the four weeks ending Sept. 27. “[That] is likely due to consumers cutting back as the financial crisis intensified in September,” Weinswig said.
Meanwhile, mass merchants, department stores and office supply retailers experience the largest declines in traffic of any channel for the quarterly period.
And in the same month retailers began sending out Christmas-oriented point-of-purchase material, retailers were already getting a taste of what might be this holiday season—retail sales were down 1.2 percent year-over-year in September, according to the Department of Commerce, reflecting record lows in consumer confidence. “U.S. consumers are paring back spending in discretionary categories like apparel, technology, home improvement, out-of-home entertainment and vacations more than their global peers, as shown by Nielsen’s October 2008 Global Consumer Confidence Survey,” Weinswig said. “In addition, the number of U.S. consumers who reported that they had no cash to spare after covering essential living expenses was twice the global average.”
Private label sales are growing in both dollars and units, according to Nielsen data measuring the 52 weeks ended Sept. 6, as cited by Weinswig. Dollar sales of branded products grew 2.5 percent over the same period, but unit sales declined 2.4 percent. In addition, private label sales grew 3.1 percent during the last four weeks of the period.
“We believe that more consumers, including higher-income consumers, are trading down to private label to save money. Improved product quality, better packaging, and increased in-store marketing have made private label products more appealing, in our view,” Weinswig said.
Winn-Dixie donates to National Breast Cancer Foundation, Donna Foundation
JACKSONVILLE, Fla. Winn-Dixie on Monday announced gifts totaling $400,000 for two foundations—the National Breast Cancer Foundation and The Donna Foundation—as part of the grocer’s “Touching Lives for a Better Tomorrow” Ceremony.
Winn-Dixie chief merchandising and marketing officer Dan Portnoy presented $300,000 to the National Breast Cancer Foundation. The company also pledged $100,000 to The Donna Foundation as a part of Winn-Dixie’s premier sponsorship of the second annual National Marathon to Fight Breast Cancer, also known as the 26.2 with Donna.
“Winn-Dixie is proud to show its commitment to the community by supporting two exceptional foundations dedicated to the fight against breast cancer,” Portnoy said. “We understand the importance of this cause and sincerely hope that these funds will make a difference in many people’s lives.”
During October, a number of vendors joined with Winn-Dixie in a special “Touching Lives for a Better Tomorrow” promotion and raised $300,000, which will go toward providing mammograms for those people who cannot afford them.
Last year, Winn-Dixie and its vendors donated $250,000 to the foundation, with the funds helping provide education and free mammograms to women who cannot afford the life-saving screenings.
Fans support diabetes research with purchase of Jonas Brothers dog tags
TARRYTOWN, N.Y. Bayer Diabetes Care on Tuesday announced the sale of two limited-edition dog tags, modeled after the one worn by teen pop sensation Nick Jonas of the Jonas Brothers, so that both patients with diabetes and the family and friends who know them can show that they’ve supported diabetes research.
“The dog tag is a cool, fashion-forward symbol of inspiration, and you don’t have to have diabetes to wear one,” Jonas stated. “My brothers and I are grateful to Bayer for this additional opportunity to raise money for our foundation.”
The tags feature a lyric from “A Little Bit Longer,” the song Jonas wrote about his diabetes. There are two versions of the dog tags available—one for people who would like to support the cause and another specifically for people with diabetes.
The dog tag for people with diabetes has the lyric on the front, but also has the word “diabetes” on the back for those who want to show their personal fight against the disease. while supplies last. The limited edition dog tags are available