With the economy in turmoil at the start of 2009, consumers are going to be pinching pennies when it comes to spending money on kitchen appliances, small electronics and other housewares.
Consider the old adage of ``good, better and best.''
``For many consumers, `good' is going to be good enough,'' said Peter Goodman, president of the home section for industry consultants NPD Group Inc. in Port Washington, N.Y.
High-end buyers are not as likely to be affected by the current downturn, he said. They still will find the money to buy the luxury goods they want. But the vast majority of products aimed at consumers who want a few added bells and whistles probably will not find traction in the current marketplace, as buyers put off purchases or settle for something less expensive.
That is why name-brand discount retailers have reported sales increases during the past few months, while mall shops have struggled.
Bentonville, Ark.-based retail giant Wal-Mart Stores Inc., for instance, posted global sales of $293 billion in the first three quarters of 2008 a 9.4 percent jump from the previous year. Meanwhile, Macy's Inc. of Cincinnati saw its sales through Nov. 1 drop 4.7 percent, to nearly $16.9 billion.
It's a mixed bag, Goodman said. No one knows how long it will take the weak economy to recover or how that will affect housewares sales, he said. Companies are trying to adjust.
``The unprecedented rapidity of the economy's decline makes it difficult to anticipate the economy rebound any time soon,'' said Mark Ketchum, president and chief executive officer of Newell Rubbermaid Inc., in a Dec. 17 news release. In that release, the Sandy Springs, Ga.-based housewares maker announced it will cut salaried workforce by 8-10 percent and impose a wage and salary freeze, in response to an expected sales slowdown.
Until job numbers improve, said NPD's Goodman, it will be hard to say how long consumers will cut back on purchases and how manufacturers will respond.
``There's nothing that we can point to that has the potential of attracting retail dollars back to the marketplace [other] than the jobless rate,'' he said.