Everyone is feeling the crunch the economic slowdown these days. But as with everything, there’s always two sides to the story. An economic crunch for some is a boom for others. You might expect places like Big Lots (which posted an 11% increase in profits on Tuesday) and Dollar Tree (which posted a 15% profit yesterday) to do well. But there are all kinds of examples of companies that are taking advantage of a slow economy. Take J.M. Smucker for example, which had a 27% rise in first quarter sales due to more people brown bagging PB&J. Hormel also exceeded expectations with sales rising 8% in the first quarter of this year to $1.62 billion, partly driven by a rise in Spam sales. But were those increases due only to rising food and fuel costs? Or could it be something else? Hormel and Smuckers both realized they have something to offer in a slowing economy. That is why they both increased their ad expenditures — which played a key role in boosting their profits.
Okay, but I make _________, not canned ham or PB&J
It isn’t just the discount brands that are making profits. Last month Volkswagen, Audi, Honda, Toyota, Fiat and Peugeot Citroën, Europe’s second-largest carmaker all posted profits. Buckingham Research Group analyst Barbara Wyckoff raised her profit per share estimate for the second quarter for Tiffany & Co. by 6 cents to 54 cents, expecting strong sales at U.S. locations from tourists. Consumers are spending, they are just being more careful with their money.
The key is to keep communicating with your customers and potential customers. Yesterday, the Oconaluftee Indian Village in Cherokee North Carolina posted a sales increase of 5.9%. Revenues are up across the board due to the fact that Cherokee recognized that this was an important time to not cut back on advertising. “Our growth is due in part to the trend toward more localized travel, combined with successful summer sales promotions and effective advertising,” said Mary Jane Ferguson with the Eastern Band of Cherokee Indians. Finding ways to market your products within the current economic environment may be the key to helping your company thrive. The point is, you can’t just sit there and wait for it to get better. Find a way to differentiate yourself, then advertise it to the market.