Shop Talk

Retailers, consumers and prices

Starbucks adds spice to Via

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schultzviaStarbucks is expanding its Via instant coffee line this autumn with cinnamon spice, vanilla, mocha and caramel flavors.

The move comes on the heels of the Seattle company’s rollout of Natural Fusions, a line of flavored ground coffees, at U.S. grocery stores this summer.

Starbucks for years avoided selling flavored brews, leaving the niche to its more mainstream Seattle’s Best Coffee brand. But it changed that high-brow stance when the U.S. economy hit the skids and consumers started saving money by drinking more home-brewed java.

The world’s biggest coffee chain is focused on growth following a restructuring that slashed costs and shuttered hundreds of mostly new, but poorly performing stores. It hopes to boost profits by introducing products — like flavored coffee — that appeal to a broader range of consumers and expanding its reach beyond its cafe walls by selling more products at grocery stores and other retail outlets.

Check Out Line: Warning, slow recovery ahead

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homedepot1Check out signs that a slow recovery is in the offing.

Retail executives see only gray skies ahead as U.S. shoppers are still spending cautiously, giving weight to the notion that a recovery will remain weak beyond 2010.

“The economic backdrop is not optimal,” Ken Perkins, president of retail research firm Retail Metrics, told Reuters. “It’s not catastrophic like it was in 2008 and the first quarter of 2009, but it’s just very sluggish.”

Check Out Line: Frugality — Part Two?

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shopCheck out the apparent return of the frugalista.

Worries about stubbornly high U.S. unemployment and a tempermental economic recovery has shoppers reeling in spending on all but the essentials.

The 28 retailers tracked by Thomson Reuters reported an overall 2.9 percent rise in July sales at stores open at least one year, missing Wall Street forecasts of 3.1 percent. Seventeen of those retailers reported lower-than-expected sales, while nine — including Macy’s and Kohl’s — beat estimates.

Check Out Line: Retailers need to step up the sucking up to consumers

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shopping1Check out an American Express survey that shows that quality service matters more than ever, suggesting U.S. retailers may want to start sucking up to recession-wary consumers even more.
    
Sixty-one percent of Americans polled said quality customer service is more important in today’s tough economy and that they will spend an average of 9 percent more when they think a company is providing that. Important points when some analysts and investors worry the economy may be at risk of dipping back into recession.
    
In a disconnect, however, many businesses seem to be missing the message as 28 percent of those polled believe that companies are paying less attention to good service and 27 percent have not changed their attitudes, according to the American Express Global Customer Service Barometer (which sounds like a weather vane for customer service).
 
“Customers want and expect superior service,” AmEx executive vice president Jim Bush said in a statement. “Especially in this tight economic environment, consumers are focused on getting good value for their money. ” 
    
“Many consumers say companies haven’t done enough to improve their approach to service in this economy, and yet it’s clear they’re willing to spend more with those that deliver excellent service – suggesting substantial growth opportunities for businesses that get customer service right,” he added.

Retailers might want to keep all that in mind given the fact that June same-store sales came in slightly below expectations and some analysts see the sector treading water.
    
The survey was conducted in the United States and 11 other countries.
 
In the United States, nine in 10 of those surveyed consider the level of service important when deciding to do business with a company, the survey said. However, only 24 percent believe companies value their business and will go the extra mile to keep it.
    
Contrary to “conventional wisdom,” the survey showed more are inclined to talk about a positive experience (75 percent) than complain about a negative one (59 percent).
    
And consumers said they are far more likely to give a company offering good service repeat business (81 percent) than they are to never do business with a company again after a poor experience (52 percent), according to the poll.
    
However, negative feedback online weighs more heavily as almost half of consumers gather others’ opinions about a company’s customer service reputation and they put greater credence in negative reviews (57 percent) versus positive ones (48 percent), according to AmEx.
    
“Because consumers can broadcast their views so widely online, each and every service interaction a company has with its customers becomes even more crucial,” Bush said. “Developing relationships with customers, listening to them, anticipating their needs, and resolving any issues quickly and courteously can help make the difference.”
    
In fact, 81 percent of Americans have decided never to do business with a company again because of poor customer service in the past, the poll said. Half of those surveyed said it takes two poor service experiences before they stop doing business with a company.
    
However, 86 percent will give a company a second chance after a bad experience if they have historically had great service before, according to the poll.
    
Woe to those who screw the experience up too, as 52 percent of consumers expect something in return after poor service beyond just resolving the problem. Seventy percent want an apology or some form of reimbursement.
    
So retailers, I expect red carpet treatment and a lot of sucking up this recession or you won’t get any of my limited funds!

Check Out Line: Summer job search advice for teens

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jobfair1Check out tough times for job-seeking teens.

Outplacement firm Challenger, Gray & Christmas said teens looking for a summer job will need to dedicate themselves full-time to the search, meaning getting a full-time job will be a full-time job. While many employers have filled summer positions, some may need more than expected while others delayed hiring until summer business conditions became clearer, Challenger CEO John Challenger said.

“The point is, you never know if or when a job opening is going to materialize, so you want to keep pushing,” he said in a statement.

Coupon use up 27 pct last year-Inmar

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COUPONU.S. consumers’ use of coupons soared 27 percent last year as they sought relief from a tough economy, according to a report released on Monday by Inmar, which tracks coupon use.

In 2009, consumers redeemed about $3.5 billion in coupons.  Shoppers used 3.3 billion coupons for everything from laundry detergent to cereal, about 700,000 more than in 2008. The internet drove much of the growth, as online coupon redemption spiked 360 percent.

Family Dollar’s keeping the light on

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fdoFamily Dollar has boosted its sales by stocking more of what shoppers want in a recession — low priced consumables, like food, household cleaners and beauty aids.

The retailer, which sells merchandise priced at $10 or below, is also encouraging shoppers to spend more in its stores by accepting an expanded number of payment options – like credit cards or food stamps.

Check Out Line: Honey, OK if I buy this $300 gadget?

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money1Check out how the recession has redefined what “major purchase” means to American consumers.

Three times the number of consumers said “yes” compared with “no” when asked if they need to discuss a purchase of $250 to $300 with their spouse or partner to determine if they can afford it, according to a survey by BeemerReport.com. It was the first time “yes” topped “no” at that price level.

Check Out Line: Upset tummies in the food sector?

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mcd1Check out sluggish results in the U.S. food sector.

Fast food giant McDonald’s and Kroger, the largest U.S. grocery chain, saw shares decline 2.5 percent and 10 percent, respectively, after reporting weak results.

McDonald’s said same-store sales at its U.S. restaurants slipped 0.6 percent in November, marking the second straight monthly decline. Following Yum Brands’ recent weaker-than-expected sales, it was the latest sign that the fast-food sector that had performed well through most of the recession was weakening.

Check Out Line: Clink, clink! Wine consumption to rise

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wine1Check out all the wine drinking going on.

Two-thirds (67 percent) of Americans surveyed said they partake in wine on holidays and special occasions while at home, while another 58 percent drink wine at home with dinner on an ordinary night, according to consumer trend tracker Mintel.

The wine market has grown 20 percent from 2004 through 2009 despite the recession, but at the peak of the slowdown in 2008 it declined 3.2 percent, Mintel said. With consumers slowly feeling better about the economy, the firm expects the wine market to increase by 2.1 percent this year.

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