SUPERMARKETGURU FOOD &
HEALTH WEEKLY NEWSFLASH!
Wall Street and Consumer Confidence
Published on: September 16, 2008
It is all about consumer confidence, and Black Sunday, as it is now being called, may have a significant impact on consumer food choices.
The troubles at Lehman Brothers, Merrill Lynch, and AIG follow almost a year of consumer anxiety that has been caused by a housing crash, a mortgage crisis, and home foreclosures. The investor sell-off this past Monday was the worst in seven-years. The Dow dropped 4.4 percent, more than 500 points, the NASDAQ index fell 80 points – a 3.6 percent drop.
The potential changes from the Lehman Brothers bankruptcy and the sale of Merrill to Bank of America recalls the consolidations of the Big Eight accounting firms into today's "big four". No doubt many of those attached to Wall Street will be out of work, and clearly their lack of disposable income will have an impact on what and where they buy.
There will no doubt be a re-evaluation of how we spend. This latest crisis expands the anxiety - well beyond the lower and middle income - to the upper-middle and even, upper income consumer.
Coupon redemption and private label sales have already found new shoppers and continue on the upswing. We can only predict even more growth for both.
Wal-Mart's new television advertising message is simple: consumers buying foods at their stores will save them an average of $700 as compared to those who shop at a supermarket. Let the price wars begin, as retailers, even Whole Foods have decided that value is the war to be won.
New technologies promise even more savings with handheld devices delivering custom paperless coupons and discounts. Look for frequent shopper programs to finally come of age and include rewards that go well-beyond cents off promotions; finally utilizing the information stored in intelligent customer-centric data bases. While the short-term focus will be on offering savings, retailers must look to the longer-term opportunity of strengthening their relationship with their shoppers.
The domino effect of these financial stories of woe on shoppers will no doubt affect the use of credit cards, consumer spending, and a reignited concern over the price of gas. It is also an opportunity for food retailers to underscore their commitment and financial stability to their shoppers. It is time to say "We are okay – don't worry – we will be here tomorrow".
