Shop Talk

Retailers, consumers and prices

Clorox’s recipe for the recession – stay home

June 11, 2009

When people hunker down, apparently they eat more salad. 
 
salad-shoppingIt’s either that or they’re using Hidden Valley Ranch dressing on veggies or some other snack.  Despite it’s higher price – it sells at about a 40-50 percent premium to its rivals - the bottles are selling well in the downturn, Clorox CEO Don Knauss said on Thursday.  Yes, the company that brightens your whites also sells white dressing. 

Incidentally, we chatted with Knauss while he dined on a salad served with, you guessed it, Hidden Valley Ranch.
 
While some shoppers are laser-focused on saving, overall Americans still want what they want when they want it and they’re willing to pay.  The recession may have changed some mindsets, though.

“Leveraging your equity to sustain a lifestyle, I don’t think that’s coming back. I don’t think people are going to be ripping equity out of their home so they can get another plasma TV or a third car, I think that’s changed,” Knauss said.
 
Lucky for him, about 90 percent of his company’s products sell for under $8.

Knauss said Clorox is seeing “very good trends” on people buying little indulgences like Burt’s Bees and that dressing.

As the downturn continues, one thing people have cut back on is caring for the appearance of their cars.  Products such as Armor All tend to be more discretionary than cleaning or food products, Knauss told Reuters.  Still, it’s a business worth being in, since it carries some nice margins that boost the company’s average.

(Reuters photo)

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