With consumer dollars stretched thin by rising energy, gas and food costs, Kevin Luskin knows the two things he must offer his customers.
“At times like this, whatever business you?re in, you have to make sure what you?re offering has real value and return on investment for the customer,” said Luskin, owner of The Big Screen Store chain, with locations in Maryland and Virginia. “That?s the name of the game.”
Retailers have increased their efforts to cater to consumers, especially during times when economic stimulus checks worth as much as $600 are showing up in bank accounts and mailboxes.
“Many retailers have already announced creative promotions to give consumers an extra incentive to shop with them,” said Phil Rist, vice president of strategy for BIGresearch, a firm that conducts consumer surveys for the National Retail Federation.
“Some retailers are helping customers stretch the value of their rebate check further by tacking on an additional 10 percent to gift cards purchased or holding special in-store promotions,” Rist said.
Because of the increasing prices of gas and groceries, consumers plan to spend more of their rebate checks on necessities like gas and food rather than on discretionary items like electronics and apparel, according to a recent NRF survey.
According to an April survey, about 17.2 million people said they planned to use some of their stimulus checks to pay for gas, up from 12.1 people in a similar February survey.
The rising cost of everyday items such as milk, bread and rice also means more consumers plan to spend the checks on groceries, with 21.2 million people planning to use a portion of the checks for food, up from 20.4 million people in February, the survey reported.
And as a result, fewer people plan to spend rebate checks to buy furniture (2.7 million from 4 million in February), purchase a vehicle (2.4 million from 3.2 million in February) or use it for “me” time (2.9 million from 3.5 million in February).
Consumers are pulling back where they can, said Anirban Basu, a local economist and chairman and chief executive officer of the Baltimore-based Sage Policy Group.
“You shop more at Wal-Mart instead of other department stores. You have a movie night at home instead of going to the movies,” Basu said. “People will substitute down the chain.”
As consumers are more cautious with their discretionary spending than usual, customer service takes on even greater importance, Luskin said.
“As long as you treat your customers well, you?ll do fine,” Luskin said. “We?ve seen this movie before. It moves on and you prepare for the next thing.”
Staff Writer Aaron Cahall contributed to this article.
