Consumers Reduce Discretionary Spending
Columbus, Ohio A survey released Thursday has found that consumers are continuing to feel the pinch of the struggling economy, and that they will cut spending to compensate.
According to the latest American Pulse Survey of 4,055 respondents, 61.7% are dining out less, 57.3% are driving less, 47.4% are attending fewer movies, 46.1% are forgoing department stores for discount retailers and 45.3% are cutting back on their vacation budgets to cope with the current economic environment.
The survey found that consumer budgets are most impacted by gas prices (67.9%), groceries (47.2%), home heating and cooling (46.8%) and taxes (36.1%).
Price haggling is one way consumers are coping with rising prices. According to the survey, half of Americans (50.3%) report having negotiated for better prices on products other than a home or vehicle in light of the current economic situation.
OfficeMax 1Q sales fall on weak economy
NAPERVILLE, Ill. OfficeMax announced that for its first quarter ended March 29, total sales decreased 5.5% to $2.3 billion compared to the first quarter of 2007. Net income increased in the first quarter of 2008 to $63.3 million, or 81 cents per diluted share, from $58.5 million, or 76 cents per diluted share, in the first quarter of 2007.
OfficeMax Retail segment sales decreased 5.5% to $1.11 billion in the first quarter of 2008 compared to the first quarter of 2007, reflecting a same-store sales decrease of 8.7% partially offset by sales from new stores. Retail same-store sales for the first quarter of 2008 declined across all major product categories due to weaker U.S. consumer and small business spending and the negative impact of the Easter holiday occurring in the first quarter of 2008.
IKEA to open first U.S. manufacturing facility
DANVILLE, Va. IKEA, through its subsidiary Swedwood, announced that it will open its first U.S. furniture manufacturing facility on May 21 in Danville, Va. The 930,000 square-foot Swedwood factory will produce a variety of wood-based IKEA products, the company reported.
“We made excellent progress on construction last year and our installation of equipment and machinery has gone very smoothly,” said Bengt Danielsson, North American president of Swedwood. “Now our primary objective is to complete appropriate operational training for 175 coworkers as well as to ensure a seamless production and packaging process.”