retail news in context, analysis with attitude

The Austin Business Journal has a story about a new survey conducted by the Opinion Research Corp. saying that “more than half of Americans say they have had to cut back on the quantity or quality of food they buy because of rising prices.” Among the specific results of the survey:

• “Sixty-seven percent of those polled nationwide in a recent survey say food prices have increased significantly in the last year and 58 percent say they have had to make cuts to their purchases as a result.”

• “Two-thirds of Americans say they are losing economic ground as inflation outstrips any increase in income. In addition, 47 percent say they are having more trouble paying their bills this year than last year, and 84 percent are concerned about rising food prices.”

• “More than half of those polled in the survey taking multiple steps to reduce food costs, such as using coupons, buying more generic or store brands, eating at home more often, buying less expensive cuts of meat and buying more of less expensive staples such as rice and potatoes.”

• “Meanwhile, 14 percent say they or someone in their immediate family have received food from a food bank, shelter or other charitable organization in the past year because of lack of money for food. Among those who have not received food donations in the past year, 21 percent say it is very or somewhat likely that rising costs or some other change in circumstance may force them to ask for food from a charitable organization in the future.”

Meanwhile, the New York Times reports that as a response to the harsh reality of the nation’s economy, “a veritable tidal wave of ads devoted to saving money is washing over the country,” and that “the decision to concentrate on frugality echoes the shifts in the tone and emphasis of ads during recessions in 1973-74 and 1990-1, after the stock market crash in 1987, and after the dot-com bubble burst in 2000-1.”

But here’s where it gets interesting. The Times also writes that “a focus in the short term on pinching pennies could in the long run have a deleterious effect on the images of brands or products by cheapening them.” The concern is that by focusing relentlessly on bargains, brands could actually diminish the equity that they have built up over a long period of time.

KC's View:
Seems to me that there are two words that have to be considered here. They are very close to being the same word, but they are not, and they have entirely different meanings.

Value.

Values.

In most cases, retailers have to pay more attention to the first word than they ever have before, but they must be careful not to lose touch with the second word, because that ultimately is the foundation upon which the business or brand is built.

Lose touch with your values as a brand, and your foundation becomes corrupted. It may be a good short-term play, but the long term will not prove to be a friendly place.

It’s like the line from the old John Mellencamp song:

You’ve got to stand for something or you’ll fall for anything…