We have run several pieces on the financial crisis, including the following:
There also is much evidence that the financial crisis and the general tightening of the credit markets has seeped into the general economy. For example, The Wall Street Journal ran a piece entitled Big Discounts Fail to Lure Shoppers:
As the financial crisis spread last month, some U.S. retailers hit the panic button, offering more generous discounts than they did at this time last year.
But the promotions did little to convince cautious shoppers to open their wallets. When they report September sales this week, many retail chains are expected to show big drops in sales at stores open at least year, a key measure of retail performance, according to analysts polled by Thomson Reuters.
Things are not looking good. But at times like this is when we can really appreciate being in the food business. The same article quotes a Costco executive:
Prices may have to go even lower to get consumers interested again. At Costco, where sales of non-discretionary items such as food and gasoline have increased and consumers have cut back on discretionary purchases of furniture, apparel and electronics, Chief Financial Officer Richard A. Galanti said last week, “If [a purchase] can be put off, it will be put off.”
This all came to mind because we have been travelling extensively, speaking about retailing and observing new and old retail concepts, which we mentioned here. After our trip to London for the Citicorp Retail Conference and zooming to Phoenix to discuss Wal-Mart’s new small store concept, we made a quick trip to Washington, DC.
We stayed at the Mayflower and turned to the Guest Services Directory to check out what restaurants the hotel had and what hours they were open. We were greeted with a quote that seemed apropos for a moment when the need of people to eat was quite literally, our industry’s “bread & butter” in this uncertain economy:
He may live without love — what is passion but pining?
But where is the man that can live without dining?”
Part i, Canto ii, Section xix
By Owen Meredith (Pen name), Edward Robert Bulwer Lytton
View quote section here.
We asked Pundit aide-de-camp James Elmer to research a bit more on this quote:
The quote can be viewed/purchased here:
The entire section this quote is selected from:
We may live without poetry, music and art;
We may live without conscience, and live without heart;
We may live without friends; we may live without books;
But civilized man cannot live without cooks.
He may live without books, — what is knowledge but grieving?
He may live without hope, — what is hope but deceiving?
He may live without love, — what is passion but pining?
But where is the man that can live without dining?
Edward Robert Lytton Bulwer-Lytton, 1st Earl of Lytton (November 8, 1831 — November 24, 1891) was an English statesman and poet. He was secretary at different courts in Europe and Minister to Portugal and France. From 1876-1880, he served as Viceroy and Governor General of India and held this office during the Great Famine of 1876–78. Ironically, in the context of the quote we wish to use, some British and American historians argue that his uncompromising implementation of Britain’s trading policy is blamed for the severity of the famine, which killed up to 10 million people.
He was a son of novelists Edward Bulwer-Lytton, 1st Baron Lytton and Rosina Doyle Wheeler. He was educated at Harrow School and at the University of Bonn. At twenty-five years old, he published in London a volume of poems under the name of Owen Meredith. He went on to publish several other volumes under the same name. The most popular one is “Lucile”, a story in verse published in 1860.
Lucile was a verse novel. The poem is a narrative told in an anapaest meter. It was Meredith’s (Lytton’s) most popular work, achieving wide popularity in the 19th century, despite accusations of plagiarism involving elements of an 1831 George Sand novella, Lavinia. In the century following its initial publication, over 2000 editions were produced by nearly 100 publishers.
Many thanks to James for that input. If we come upon truly difficult times, it will be of no small solace to those of us in this trade to realize that it is, indeed, true, “People have to eat” and things will have to get very bad indeed before total food consumption goes down.
Already, however, those in foodservice have seen consumers trading down both to less expensive restaurants and to eating at home. Some of the few big chains showing good results: Wal-Mart and McDonald’s.
And that is pretty much an accident. Not long ago, Wal-Mart tried to “upscale” its image with ads in Vogue and McDonald’s has tried to roll out upscale coffee bars in every store. Fortunately for these companies, none of these plans have worked so they didn’t lose their reputation for economy.
Thus they are well-positioned to thrive in a world where consumers can live without most things but still need to eat.
Perishable Thoughts is a regular section of the Perishable Pundit. If you have a favorite quote that you would like to share with the industry, please send it on. You can do so right here.