Natasha Khan of The Wall Street Journal reports that consumer confidence has dropped due to economic uncertainty, with a 5% decline in the University of Michigan’s February survey. While many seek value, they’re prioritizing innovation over low prices. Khan writes:
Reynolds American is trying to reach low-income smokers with a more affordable pack of Newport cigarettes. The maker of Cheetos and Doritos is playing around with how many servings of chips it includes in a multipack. Estée Lauder is trying to turn around its sales slump with a plan that includes developing new products across its cosmetics portfolio, which ranges from $25 lipsticks to perfumes that sell for over $1,000.
“Our intent…is to meet the consumer where they are with the right product, but also at the right price point,” Estée Lauder’s new chief executive, Stéphane de La Faverie, told analysts this month. […]
There is a widening gap in the spending ability of lower-income and higher-income shoppers. People with more limited budgets are having to work harder to make ends meet.
“When we talk to consumers, value is the number one decision maker,” PepsiCo PEP 0.74%increase; green up pointing triangle CEO Ramon Laguarta told analysts this month. The company’s North American snacks business, which makes Doritos, Cheetos and Lay’s potato chips, reported a 3% drop in sales volume in the quarter ended Dec. 28. […]
The company this month said it would cut up to 7,000 jobs and warned that it expected sales to fall 10% to 12% in the quarter that ends March 31. The maker of MAC, Clinique and Tom Ford has been struggling with weak demand, including markets in Asia and North America.
The CEO, de La Faverie, said the company hadn’t fueled acquisition of new consumers aggressively enough. “We will innovate across price tiers from entry prestige to luxury, making sure to bring products to market at attractive price points” to attract new consumers, he said. “You are going to see a lot more innovation coming.”
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