News

Retailers getting thrifty

October 30, 2011

Retailers are changing their branding strategies, putting more emphasis on inexpensive products to reach budget-minded shoppers, according to a story in the Palm Beach Post.

As the recession squeezed the middle class, consumers have traded in name-brand goods for discount prices, and retailers are responding. Procter & Gamble, for example, is touting its cheaper laundry detergent, Gain, while luxury brands such as Missoni have developed limited lines for Target. Discount store chains are booming.

Middle-class shoppers used to hit stores like the Dollar Tree to pick up extra treats, but many of them are stopping in to pick up staples.

Valerie Thomsen, for example, told the Palm Beach Post that she recently scored a Duncan Hines cake mix during her now "regular Dollar Tree stop" in Royal Palm Beach.

She's not alone; Dollar Tree expects to have opened 275 stores by the end of the year, spokeswoman Shelle Davis said.

Retailers adapt

Although recent retail sales figures show that people are spending more than they did in the recession, it's not much. Sales have risen almost every month this year, but consumer confidence remained at recession levels in September.

Many people who haven't lost income still have gone several years without raises, living under the constant specter of layoffs. This had caused middle-class customers, including Carol O'Keefe of Palm Springs to buy more store-brand products. She also often shops the West Palm Beach Dollar Tree for aluminum foil and garbage bags.

Brand names used to be a "surrogate for value," said Robert Passikoff, president of Brand Keys, a market research firm concentrating on customer loyalty issues. "But people have learned that some of that value is not so obvious. Maybe they tried a cheaper alternative and discovered it worked just as well, or nearly so."

Read more about consumer behavior.