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Consumer trend: Chocolate & fast food up. Cosmetics down

February 12, 2009

By Alyssa Williams, BIZ Reporter

Well, we sure know what Americans are doing to ease their troubled minds from the worsening economy – eating. And eating cheaply at that.  Lower-priced chocolate and fast food profits are on the rise, much to the dismay of nutritionists around the country. Hershey Co.’s profit rose 51 percent, reporting a fourth-quarter net income of $82.2 million compared to $54.3 million last year. Meanwhile, McDonald’s arches are looking ever more golden with a 7.1 percent worldwide increase in same-store sales for January.

However, after disappointing holiday sales, companies like Elizabeth Arden Inc., Estée Lauder Cos., Tiffany & Co., and Coach are reevaluating business in light of the downturn of consumer spending, which for many of these companies means lowering their earnings and sales forecasts.

Whether Americans are opting for more lower-priced alternatives or just not purchasing goods like beauty products, handbags or jewelry altogether, a conclusive link has yet to be drawn. But it seems while some consumers are forgoing their retail therapy, people DO have to eat and inexpensive dining is in.

Consumers have been trading down and using some of their discretionary spending on McDonald’s burgers and breakfast items, as well as Reese’s Peanut Butter Cups, Hershey’s chocolate bars and Kit Kat wafers.

We may be buying less high-end chocolate and Starbucks coffee, spending less at grocery stores and other fast food restaurants (and abstaining from pricier restaurants), but “value across the menu” just seems too good to pass up.

Americans still indulge, but want to feel like they are saving in the process. Economic crisis or not, there is still money to be made which reports of several companies’ financial success in this recession prove. Each market has its niche.

Nevertheless, while there are sure to be more reports of profit loss in the near future, the current consumer splurge of hamburgers and chocolate in light of America’s increasing waistline should be of equal concern to our nation’s shrinking wallets.

Alyssa Williams

  
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Discuss this article

Lee February 12, 2009

All in due time…after eating all that chocolate and those greasy hamburgers, they’ll probably need the cosmetics to cover their complexion issues. All kidding aside it’s just great to read some good investment news.

Alice February 12, 2009

I guess Americans are going to find ways to spend no matter what. Too bad it’s not spending at the grocery store for good foods.

AlphaDog February 12, 2009

This has been a big turnaround from where McD was a few years ago. That CEO seserves a raise (when the economy improves of course)

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