LOGIN

Why Companies are Targeting Big Spenders For Products Like $90 Cream and $10 Toothpaste

by Michael Nguyen
0 comment

Lots of companies, like the ones that make toothpaste and all kinds of discount stores, are adding fancier items like luxury body creams and services. This is aimed at customers who have more money to spend even if prices keep going up and there’s a lot of instability with global economy. Fancy things like $10 toothpastes or even $90 creams can be found on store shelves now!

Last year, stores and companies who make consumer products said they were allowed to increase prices because of problems in their delivery system and a war in Ukraine. But now that the money troubles are less, some of them want to find other ways to make more sales and earn more money. To do this, they’re shifting focus to selling high-quality items even though overall sales are low.

Marshal Cohen, who works for a market research firm called Circana, said that if people want to do well during difficult economic times, they should try to get the higher-paying jobs. A lot of companies are starting to sell items that cost more money than their normal products so they can attract customers with lots of money. But this might mean fewer options for customers who don’t have much money.

Walmart is selling really expensive creams that cost up to $90 in some of their stores, and Heinz recently released a series of special condiments called Heinz 57. One of them is an 11.25-ounce jar of honey mixed with black truffle, and it costs around $7! Last year Colgate-Palmolive also made people surprise by introducing a 3-ounce toothpaste for only $10 – which was the highest price they’ve ever had in the US.

Five Below is a store that offers toys and different products all under $5. They have an idea to create a new space called Five Beyond, where the items will cost more than $5 – up to $6 or even higher. Last year, they changed around 250 of their 1,300 stores with this special area. This year they plan to change another 400 stores too.

The CEO of Five Below, Joel Anderson, said that in January people who shop at both Five Beyond and Five Below shops spend more money than those just shopping at Five Below.

Chipolte Mexican Grill have made it public that they don’t like to offer discounts. They said their prices were so high, some of their less wealthy customers stopped visiting them. Last fall, Chipolte introduced a special new steak option called ‘Garlic Guajillo Steak’ and it was even more expensive than regular steak.

Chipotle’s CEO, Brian Niccol, revealed in a phone call with investors that their prices have gone up by 13.5%. Despite this fact, he said that customers who are in higher income brackets visit the restaurant more often. He further added that instead of offering customer discounts, Chipotle is focused on maintaining its brand image.

Experts like Rakeen Mabud, from The Groundwork Collaborative are not happy about certain moves because it will make products too expensive for people who have less money.

Rakeen said “The wealthier people can afford the needed products but everyday people lack the funds so they don’t get to buy them.”

In February, AMC Entertainment — the biggest movie theater chain in the world — said that by the end of this year, they were introducing a new three-tier pricing plan. Moving forward, customers will have to pay more money to get better seats. Elijah Wood — who played Frodo Baggins in “The Lord of the Rings” trilogy — wasn’t happy with this move and he showed his unhappiness on Twitter.

The movie theater is a place for everyone and AMCTheatres wants to change this by punishing people with lower incomes while rewarding those with higher ones. The gap between the rich and poor has become larger during the pandemic.

Families who make more than $156,000 a year make up about one-fifth of the people in the United States. But, they spent close to four out of every ten dollars at stores during last year, higher than 2021. Furthermore, if we don’t count food or other items that are needed, those same families spend almost five out of every ten dollars at stores last year which was higher than the amount they spent in 2021.

Households with lower incomes (below $50,000) saved up some money during the pandemic, however they are now spending it quickly. The savings of households who make less than $50,000 have been reduced by almost half since the last stimulus check was sent in March 2021. On the other hand, households making more than $250,000 have used only 15% of their larger savings.

The Federal Reserve wants to stop prices from rising too fast, so it has done things like raised the cost of using credit cards and getting car loans. But their plans may not be working as good as they thought because recent reports showed that prices were not going up much while people are buying more things.

Neiman Marcus, a company that sells luxurious items, is doing extra stuff for its customers who buy from them an average of 25 times in one year and spend about $27,000. For example, it recently did a fashion show with the designer brand Brunello Cucinelli near Dallas only for their best customers.

Neiman Marcus is not saying “no” to other customers, but they are prioritizing their most loyal shoppers (top 2%), since these people make up 40% of total sales. The chief executive of American Express, Stephen J. Squeri mentioned this idea of focusing more on richer applicants in a January earnings call.

“Even though things are a bit tough economically, the high-class customers are still shopping like crazy,” he said. A lot of people from Washington and Detroit have helped contribute to this report. You can follow Anne D’Innocenzio on Twitter for more info about it.

You may also like

Leave a Comment

logo-site-white

BNB – Big Big News is a news portal that offers the latest news from around the world. BNB – Big Big News focuses on providing readers with the most up-to-date information from the U.S. and abroad, covering a wide range of topics, including politics, sports, entertainment, business, health, and more.

Editors' Picks

Latest News

© 2023 BBN – Big Big News

en_USEnglish