Recession forcing retailers to think small

So how does this apply to amateur astronomy?

TMT


Recession forcing retailers to think small
By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail
Writer
Wed Sep 9, 6:22 pm ET

NEW YORK – The Great Recession and Americans' retreat into thriftiness
are teaching retailers a new lesson: How to survive when consumers are
focused on "needs" rather than "wants."

For years, shoppers splurged on everything from $5 lattes to $200
jeans, and retailers responded by opening more stores and offering
more choices. Now, beset by high unemployment and limited access to
credit, shoppers are limiting most of their purchases only to
essentials or the best deals.

Retailers' first response to the sudden and sharp pullback in spending
last fall was to offer deep discounts and more coupons to keep
merchandise moving. But to survive over the long haul, the watchword
for stores and product makers is "small."

They're stocking shelves with slimmed-down milk jugs and half-sized
pies. They're charging less for stripped-down products such as blouses
with less-frilly designs and detergents with less powerful cleaning
action. Brands are disappearing, too, including Kraft's Handi-Snacks
pudding. Some stores are being reduced in size, if they're not shut
down entirely.

The changes are likely to last for years. Even when the economy
improves, it will take years before the debts that piled up during the
decade-long shopping spree are paid off. Americans are also getting
used to their newly adopted frugal habits of saving more and spending
less.

"I don't think we are going to go back to business as usual," said
Steve Sadove, chairman and CEO of Saks Inc., operator of Saks Fifth
Avenue.

As companies woo buyers, shoppers are finding they're in control. And
they're driving hard bargains.

Renee Bello, a real estate broker in Sandwich, Mass., is enjoying the
bombardment of store coupons, more lower-priced products and better
quality in store-label merchandise, particularly at grocery chains.

"I definitely feel I have power," says Bello, 54, who has been able to
grab coveted brands and high-quality groceries even though she's cut
her spending in half because of economic uncertainty.

For retailers, the changes need not be devastating. In fact, those
that survive will be leaner and more efficient.

"There's nothing like a good old-fashioned recession to make you run a
better business," J. Crew Group Chairman and CEO Millard Drexler said
recently.

LESS IS MORE

To stay in business, stores find they can't take big chances with what
they put on the shelves, and how much they stock of each item.

Merchants are now keeping less stock on hand and delivering goods into
the store more frequently to keep stores looking fresh, instead of
having items sitting on the shelves for months. Retail executives hope
that strategy will help cut down on aggressive discounting.

The long-term goal is for merchants to carry 1 1/2 months' worth of
inventory, compared with 3 1/2 months in the past, says retail
consultant Burt P. Flickinger III.

Apparel companies are focusing on the most popular colors instead of
oddball hues. For example, Nicole Miller eliminated olive green in its
prom dress collection. And plain styles were prevalent at last week's
apparel industry trade show in Las Vegas, says David Wolfe, creative
director of The Doneger Group, which advises stores on apparel buying.

Shoppers won't buy tops or dresses with seasonal designs because they
want to wear the clothes year round, he says.

THE POWER OF LOWER PRICES

Manufacturers and retailers that held firm on pricing a year ago to
try to protect their brands have felt the sting.

Consumer products giant Procter & Gamble Co., whose revenue fell 11
percent in the latest quarter as it remained steadfast on pricing for
its powerhouse brands, is experimenting with price cuts. In a
departure from the company's carefully cultivated premium image, P&G
is even testing a lower-cost version of its signature Tide laundry
detergent. Tide Basic sells for about 20 percent less than the regular
powder form and lacks the latest cleaning ingredients.

Abercrombie & Fitch, long known as the go-to store for pricey teen
fashion, was hammered by revenue declines of nearly 30 percent when it
refused to budge on prices. It relented this summer.

And Saks has had to shift toward the lowest and mid-tier price points
at its stores. More men's dress shirts range from $95 to $200 and
fewer are priced at $300 or more.

Gucci and other European designer brands would have bristled a year
ago about lowering prices. Now, they are working with Saks and other
luxury stores to reduce prices on some goods.

Price cuts are painful, so manufacturers and retailers maneuver to
avoid them by identifying goods with strong demand. If they must cut
prices, they cut costs, too, to maintain profit margins.

"This is a transition period for the world," says Bud Konheim,
president of designer clothing maker Nicole Miller. "We have our
antennae up."

Retailers are also throwing out their devotion to premium brands. From
Best Buy's private-label televisions to Kroger's pizzas to house-brand
men's shirts and sports coats at Saks Fifth Avenue, stores are putting
more stock in store-label products, which cost less for consumers and
tend to be more profitable.

This year, 37.5 percent of business is expected to be from store
brands, according to a survey by the National Retail Federation. Two
years ago, that figure was 26 percent. The share could go to 50
percent in the next few years, says C. Britt Beemer, chairman of
America's Research Group.

Jimmy Franco, a 46-year-old book publicist from New York, has switched
to store-label products like mouthwash and aspirin and praises their
quality compared with brand names. "I really don't see any
difference."

MARKETING VALUE

Consumers' focus on value and saving money has shaped how products are
marketed as well.

Sellers are becoming more sympathetic to consumers' woes in their ad
campaigns, a big shift from past recessions in which they focused on
price-cutting.

In the past, "retailers had a hard time acknowledging (in ads) when
things were bad," says Ellen Davis, a spokesman at NRF. They feared it
would make their business worse.

These days, higher-priced products like Hefty's odor-blocking trash
bags are advertised as money savers because the garbage won't get so
smelly that it has to be taken out before the bag is full. Commercials
for Toyota's Lexus luxury brand tout practical attributes like fuel
efficiency, instead of emphasizing prestige.

Consumers aren't going to be "hyped" to buy merchandise anymore, says
Konheim of Nicole Miller. They want to be convinced that they're
getting more value.

Marketers are vying to be remembered as "the companies that helped see
us through" the hard times, says Julie Winskie, president and chief
client officer at public-relations agency Porter Novelli.

STORE CLOSINGS

Chains have cut the number of stores they operate and have shut down
unprofitable offshoots that sought to slice the consumer pie into
thinner and thinner pieces. Abercrombie is eliminating its Ruehl
chain, which targeted a slightly older crowd with higher-priced
accessories and clothes. Since last year, Starbucks Corp. has been
working to close about 900 cafes. And Office supply chain Office Depot
announced in July that it was closing 9 percent of its North American
stores.

About 143,000 stores closed last year, the highest number since 2001,
according to an analysis of government figures by Michael Niemira,
chief economist at International Council of Shopping Centers.

He predicts 140,000 more will close this year and 135,000 in 2010.
That will worsen the already gaping holes in malls across the
country.

Suzanne Mulvee, senior economist at Property & Portfolio Research,
says she expects mall and shopping center vacancies could reach 19.7
percent this year and rise to 20.2 percent in 2010.

A healthy market would be about 14 percent.

Our factories are all closed and China has the slave market all sewn
up. We called it global competition but it was really only one Chinese
slave driver competing against another on price. Our business managers
creamed off their fat bonuses from the difference in value between the
falsely labelled items and those without. They produced nothing. The
products all came from the same Chinese factory system of very low pay
and long hours in appalling working and living conditions.

The marketing parasites taught us that the label was the only thing
which mattered. Not the slave-produced tat hidden behind it. Tat (or
TAT) was redefined by Chinese slave drivers competing against each
other in the let's pretend game of global competition. When all they
were really competing on was the mistreatment of their slaves so that
they could copy the 18th and 19th century European industrial barons.
Building their fine palaces behind high walls and a moat filled with
the blood, sweat and tears of their workers.

Every item we buy has its real price. If you pay below the real price
somebody else has to make up the difference. In most cases it was
Chinese slaves making up the difference with their unhappiness,
exhaustion, health and freedom. Or even their own lives. Everything
has its real price. Do you pay the real price for everything? Or do
you steal the difference from others?

You pay below the real price for your food and somebody has to make up
the difference. Usually it is miserably poor African, Asian or South
American farmers or growers or their workers. The supermarket system
competes on price at the expense of the providers. They suffer no loss
themselves in cutting prices. In fact they are well rewarded for
cutting prices. Turnover increases, profits go up and the multi-
billionaire chain store owner sunning himself on his floating gin
palace adds another meaningless nought to his empty value to global
society.

The difference between the real price and what you pay always has to
be made up by somebody. If not the supermarket billionaire and if not
you the customer... then who?

On Sep 14, 6:19 pm, Too_Many_Tools wrote:
So how does this apply to amateur astronomy?

TMT

Recession forcing retailers to think small
By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail
Writer
Wed Sep 9, 6:22 pm ET

NEW YORK – The Great Recession and Americans' retreat into thriftiness
are teaching retailers a new lesson: How to survive when consumers are
focused on "needs" rather than "wants."


(fluffy marketing propaganda deleted)


It doesn't. The astronomy equipment you seem to want is not mass-
market.

Don't expect better goods and services from retailers:

Grocery stores offer dozens of choices of toothpaste but the produce
often leaves something to be desired. People seem to prefer junk food
anyway.

Clothing stores like to serve only those customers who reside in the
middle of the bell curve for height, weight and size. All other
customers either buy custom-made clothes or rely on mail order.

You can choose a new pickup truck in almost a million variations of
power train, color, body-style and other options, but try to find a
reliable, reasonably-priced small hatchback or wagon that gets decent
fuel mileage.

On Sep 15, 1:55*am, "Chris.B" wrote:
Our factories are all closed and China has the slave market all sewn
up. We called it global competition but it was really only one Chinese
slave driver competing against another on price. Our business managers
creamed off their fat bonuses from the difference in value between the
falsely labelled items and those without. They produced nothing. The
products all came from the same Chinese factory system of very low pay
and long hours in appalling working and living conditions.

The marketing parasites taught us that the label was the only thing
which mattered. Not the slave-produced tat hidden behind it. Tat (or
TAT) was redefined by Chinese slave drivers competing against each
other in the let's pretend game of global competition. When all they
were really competing on was the mistreatment of their slaves so that
they could copy the 18th and 19th century European industrial barons.
Building their fine palaces behind high walls and a moat filled with
the blood, sweat and tears of their workers.

Every item we buy has its real price. If you pay below the real price
somebody else has to make up the difference. In most cases it was
Chinese slaves making up the difference with their unhappiness,
exhaustion, health and freedom. Or even their own lives. Everything
has its real price. Do you pay the real price for everything? Or do
you steal the difference from others?

You pay below the real price for your food and somebody has to make up
the difference. Usually it is miserably poor African, Asian or South
American farmers or growers or their workers. The supermarket system
competes on price at the expense of the providers. They suffer no loss
themselves in cutting prices. In fact they are well rewarded for
cutting prices. Turnover increases, profits go up and the multi-
billionaire chain store owner sunning himself on his floating gin
palace adds another meaningless nought to his empty value to global
society.

The difference between the real price and what you pay always has to
be made up by somebody. If not the supermarket billionaire and if not
you the customer... then who?

Uh?

Off the meds?

Try again..this time addressing the subject.

TMT

On Sep 15, 4:56*am, wrote:
On Sep 14, 6:19 pm, Too_Many_Tools wrote:

So how does this apply to amateur astronomy?

TMT

Recession forcing retailers to think small
By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail
Writer
Wed Sep 9, 6:22 pm ET

NEW YORK – The Great Recession and Americans' retreat into thriftiness
are teaching retailers a new lesson: How to survive when consumers are
focused on "needs" rather than "wants."

(fluffy marketing propaganda deleted)

It doesn't. The astronomy equipment you seem to want is not mass-
market.

Don't expect better goods and services from retailers:

Grocery stores offer dozens of choices of toothpaste but the produce
often leaves something to be desired. *People seem to prefer junk food
anyway.

Clothing stores like to serve only those customers who reside in the
middle of the bell curve for height, weight and size. All other
customers either buy custom-made clothes or rely on mail order.

You can choose a new pickup truck in almost a million variations of
power train, color, body-style and other options, but try to find a
reliable, reasonably-priced small hatchback or wagon that gets decent
fuel mileage.

Try again.

Most amateur astronomy equipment IS mass produced.

TMT

So how does this apply to amateur astronomy?

Just this past weekend, I saw part of a meeting of a major astronomy
retailer (one of the biggest), speaking mainly to their own people. Their
sales honcho said that although revenue is down, profit is up. Things may
not be as bad at the retail end as you wish.
--
Curtis Croulet
Temecula, California

On Sep 15, 12:13*pm, "Curtis Croulet"
wrote:
So how does this apply to amateur astronomy?

Just this past weekend, I saw part of a meeting of a major astronomy
retailer (one of the biggest), speaking mainly to their own people. *Their
sales honcho said that although revenue is down, profit is up. *Things may
not be as bad at the retail end as you wish.
--
Curtis Croulet
Temecula, California

"..as you wish..."?

And you are inferring what?

I offered a story that tells it as it is in the retail sector...and I
am asking how it applies to astronomy equipment in the retail sector.

As to your commnets, when revenue is down but profit is up...it means
cost cutting is happening.

How long can a company cut costs to maintain profits?

And how long can they cut costs before cutting quality on the product?

And when they do, can you tell they did?

TMT

In article ,
Too_Many_Tools wrote:
On Sep 15, 12:13=A0pm, "Curtis Croulet"
wrote:
So how does this apply to amateur astronomy?

Just this past weekend, I saw part of a meeting of a major astronomy
retailer (one of the biggest), speaking mainly to their own people. =A0Th=
eir
sales honcho said that although revenue is down, profit is up. =A0Things =
may
not be as bad at the retail end as you wish.

"..as you wish..."?

And you are inferring what?

I offered a story that tells it as it is in the retail sector...and I
am asking how it applies to astronomy equipment in the retail sector.

As to your commnets, when revenue is down but profit is up...it means
cost cutting is happening.

Or it means that people are preferentially buying the high-margin
products; I wouldn't be amazed if percentage margins were higher on
expensive telescopes than on cheap telescopes, and if a recession that
stops people from buying cheap telescopes as toys has no effect on the
smaller number of people who decide that they want to spend a few
thousand dollars that they already have on a rigid mount or bright
optics.

I'm not sure to what extent non-trivial astronomy equipment has a
meaningful retail sector; nobody impulse-buys an LX90 (if only because
they've spent some time agonising over whether they wanted an LX200 or
a NexStar SE instead), and when they buy one it comes from a dealer
who has a pretty strong contract with Meade. Even less is anyone
going to impulse-buy an STL-11000.

I just don't think there was a market of people buying heavy-duty
astronomical equipment on credit that they couldn't afford; amateur
astronomy isn't a hobby for people who want instant gratification.

Tom

On Sep 15, 10:14 am, Too_Many_Tools wrote:
On Sep 15, 4:56 am, wrote:



On Sep 14, 6:19 pm, Too_Many_Tools wrote:

So how does this apply to amateur astronomy?

TMT

Recession forcing retailers to think small
By ANNE D'INNOCENZIO, AP Retail Writer Anne D'innocenzio, Ap Retail
Writer
Wed Sep 9, 6:22 pm ET

NEW YORK – The Great Recession and Americans' retreat into thriftiness
are teaching retailers a new lesson: How to survive when consumers are
focused on "needs" rather than "wants."

(fluffy marketing propaganda deleted)

It doesn't. The astronomy equipment you seem to want is not mass-
market.

Don't expect better goods and services from retailers:

Grocery stores offer dozens of choices of toothpaste but the produce
often leaves something to be desired. People seem to prefer junk food
anyway.

Clothing stores like to serve only those customers who reside in the
middle of the bell curve for height, weight and size. All other
customers either buy custom-made clothes or rely on mail order.

You can choose a new pickup truck in almost a million variations of
power train, color, body-style and other options, but try to find a
reliable, reasonably-priced small hatchback or wagon that gets decent
fuel mileage.

Try again.

Most amateur astronomy equipment IS mass produced.

TMT

You are confusing mass-produced with mass-market. A cheap 60mm
refractor on an alt-az mount and a 16-inch SCT on a computerized mount
are both "mass produced." But the 60mm sells by the millions (mass-
market) while the 16-inch might be a bit more rare (niche-market.)

And just because some retailers are _supposedly_ focusing on "needs vs
wants" doesn't mean that the consumer is getting a better deal, maybe
just fewer choices.

And you are inferring what?

"Infer" and "imply" have different meanings. Perhaps someday you'll know
the difference.
--
Curtis Croulet
Temecula, California