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Consumers count on Spam as a recession-proof staple

Economic slump is a boon for some products

By Deb Riechmann
Associated Press / May 17, 2009
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WASHINGTON - It's not all doom and gloom in the US economy. Some products are bucking the recession and flying off store shelves.

Sales of chocolate and running shoes are up. Wine drinkers haven't stopped sipping; they just seem to be choosing cheaper vintages.

Gold coins are selling like hot cakes. So are gardening seeds. Tanning products are piling up in shopping carts; maybe more people are finding color in a bottle than from sun-worshipping on a faraway beach.

Strong sales of Spam, Dinty Moore stew, and chili helped Hormel Foods Corp. post a 6 percent increase in first quarter sales in its grocery products unit.

Consumers have trimmed household budgets and postponed buying cars, major appliances, and other big-ticket items. Yet they still are willing to shell out for small indulgences and goods that make life more comfortable at home, where they are spending more time.

Recession shoppers also are drawn to items that make them feel safe, both personally and financially.

"The focus on the family hearth is something that has happened in nearly every recession. It's, `How can I have more fun at home?' " said Paco Underhill, whose company, Envirosell, monitors the behavior of shoppers and sellers across the United States and in other countries.

"People are much more focused on their homes and their immediate happiness and they're buying things that they can use themselves - seeds, fishing equipment. Lipstick and chocolate are small rewards that make you feel better."

Profits in the first three months of 2009 at Hershey Co., the nation's second-largest candy maker, surged 20 percent and beat Wall Street's expectations. Kraft Foods Inc. reported double-digit growth in macaroni and cheese dinners - the consummate comfort food.

Recessions, it seems, are good for love, too. Over the final three months of 2008, condom sales rose 5 percent and Match.com reported its strongest performance in seven years.

But economic woes are as rough on the tummy as they are on the wallet. Chicago-based market researcher Information Resources Inc. reports that sales of laxative liquids and powders rose 11.5 percent for the 52 weeks ending April 19. Sales of stomach remedy tablets, including Pepto-Bismol and Phillips brands, climbed 8 percent.

As expected during any economic slump, recession shoppers looking for deals have boosted sales at discount chains such as Wal-Mart Stores Inc. Dollar Tree Inc. was in this year's Fortune 500 for the first time, at No. 499.

There's a general tendency to trade down, according to Leo J. Shapiro & Associates, a consulting firm in Chicago. That means eating dinner at the kitchen table instead of restaurants, buying used cars and shopping at do-it-yourself auto parts stores. It means spending less on clothes. Sales at luxury retailer Saks Inc. fell 32 percent last month. Sales at Goodwill Industries International stores in the United States and Canada jumped by 7 percent in March.