04/21/2008
from the Kennebec Journal
Rep. Pingree hears varied proposals for health-care solutions
HALLOWELL Fire that cut communications labeled arson
MONMOUTH Police defended after slim budget rejection
State's schools chief to parley
Wasser will lead newsrooms at KJ, Sentinel and in Portland
BRIEFS
Hockey still in picture for Harrington
Portland boxer to face legend's son
All of today's:
News | Sports
from the Kennebec Journal
from the Morning Sentinel
$1.3 MILLION FOR HEALTHREACH
Families Matter grows to meet special needs
Chellie Pingree listens to ideas on health care reform
FARMINGTON Rain alters plans for 4th of July
District regroups after budget failure
Vote on county budget hits snag
Burnham driver wins checkered flag at 2 tracks on same day
Maine boxer gets unique opportunity
All of today's:
News | Sports
from the Morning Sentinel
MaineToday Media, Inc.
Adam Lee was a bit concerned a couple of months ago when he saw Toyotas filling up the lot at his Lee Auto Malls dealership in Topsham.
After all, it was winter, one of the slowest times of the year for car sales. And with the economy headed down, few people were in the market for a new car.
He worried that the cars would sit for months.
But within a few weeks, the lot was starting to empty out, Lee said, as buyers snatched up the cars -- at least the Prius models and other small cars that offer good gas mileage.
Lee's experience suggests not just how the economy is changing consumers' behavior, it's also changing the sellers' approaches and expectations.
Car dealers would prefer to sell big luxury cars or trucks, loaded with options, because they provide a greater profit margin than a subcompact with only a few options. But Lee will content himself pushing the subcompacts that consumers like because it saves them money at the pump.
"All the small stuff is just in demand like crazy," he said.
Likewise, grocery stores are touting low prices on a decidedly unsnazzy product: milk.
This week, Hannaford and Shaw's, the two biggest chains in Maine, announced new moves to cut milk to the state-mandated minimum price. Instead of pushing steak or lobster, the stores are banking on offering savings of a few pennies on a basic item to get shoppers in the store.
Even convenience stores are seeing a benefit from consumers looking for anything that will shave a few pennies off the food bill.
Michael Doucette, director of purchasing and merchandising for C.N. Brown, which owns Big Apple stores in New England, said sales of most items in the company's convenience stores are soft, reflecting consumer wariness over every penny. He said that's to be expected because convenience stores have a reputation -- undeserved, he thinks -- for higher prices than grocery stores.
But Big Apple's prices for its milk brand are the same as Hannaford and Shaw's -- at the state minimum -- and have been for years before the chains decided to cut prices, Doucette said.
That has helped push milk sales at Big Apple up slightly during the first quarter, one of the brighter spots for the stores.
Others are offering deals outside their own stores to keep cash registers ringing.
Shaw's has teamed up with Irving Oil to give coupons for money off gas, based on how much customers buy at the stores. For every $50 worth of purchases, consumers can get 10 cents off per gallon of gas, up to 20 gallons, at Irving stations.
"Food and fuel really go hand-in-hand because those are two components of a household budget that you really can't do without," said Judy Chong, spokeswoman for Shaw's.
Shaw's has data to suggest that the promotion is drawing more customers, Chong said, but she declined to reveal the numbers.
Chong said Shaw's uses "analytics and listening to customers" to determine when consumers start pinching pennies more than usual, and adjust marketing strategies accordingly.
"We see people 'trade down,' and look for more value," she said. "They might buy more peanut butter or tuna."
Customers also often look to cut corners by buying house brands because they tend to sell for slightly less than national brands, Chong said. Some of the chain's promotions during tough times are geared toward encouraging that behavior, she said.
Lee said business owners can't overreact to shifts in consumer behavior caused by the economy. For instance, he said, a car dealer won't stop carrying trucks on the lot because there's a floor underneath sales of large pickups -- a segment of buyers, such as contractors, farmers and fishermen, who need larger trucks for hauling equipment. They'll keep buying trucks when they need a new vehicle, he said.
"Nobody trades in their one-ton diesel for a Fit (subcompact Honda), but the guy who might have gotten a mid-size car is getting a small car," he said.
But it can take months for car makers to adapt to those quick shifts in buyers' preferences that can change almost overnight as gas prices keep rising.
That leads some buyers to stay on the sideline, Lee said, waiting for manufacturers to start making hybrid versions of larger cars and trucks.
In the meantime, "there's nothing worse for a car dealer than people asking for something that you just don't have yet," he said.




Reader comments
Click here to view or add reader comments