Consumers buy flowers to enhance 'staycations'

On June 1, Dow Chemical Co. raised the price of all its products by as much as 20 percent due to rising energy, raw materials and transportation costs. Dow chairman and CEO Andrew Liveris said the price increases were necessary for the company to deal with rising costs. Liveris said the company’s first-quarter materials and energy bill had increased a “staggering” 42 percent from the same period a year ago. In 2002, Dow spent $8 billion on energy and hydrocarbon-based feed stocks.

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Kimberly-Clark Corp. announced in May that starting in the third quarter of this year, it would raise prices for many of its products, including Huggies, Pull-Ups, Viva paper towels, Kleenex tissues and Cottonelle and Scott bathroom tissue. Prices will increase 6-8 percent to offset the rise in raw material and energy costs.

The ultimate assault/insult to consumers came in May when American Airlines announced that it would begin to charge many passengers $15 for their first checked bag. Earlier in the year, American along with other airlines began charging passengers $25 to check a second bag. Other services that American will charge more for include ticket-related fees, pets, oversized bags and unaccompanied minors.

Time for a ‘staycation’

Rising oil prices are having a major impact on consumer confidence, which fell to a 16-year low in May. The New York-based Conference Board Consumer Research Center said the struggling economy, increasing food and fuel prices, the downturn in the housing market and uncertainty in the job market are all taking a toll on consumer confidence.

As a result of rising gas prices, higher air fares and consumers’ efforts to stretch a dollar, more people are looking to stay closer to home this summer. Several retailers, including Wal-Mart and Lowe’s, are running promotions for products, including plants and flowers, to encourage consumers to enjoy a stay-at-home vacation or staycation. Lowe’s offers consumers ways to “create a lush, serene garden escape” with help through its Learn2Grow.com Web site.

Wal-Mart is promoting its American Summer marketing campaign through television commercials that tell consumers “Summer costs less at Wal-Mart.” The commercials, in English and Spanish, feature lawn and garden products used in backyard activities including barbecues and family gatherings.

In May, a USA Today article reported that Wal-Mart store manager Dane Bryan has seen good sales for both flowers and landscape materials as people, who are spending more time at home, seek to enhance the look of their yards. Lowe’s also reported strong sales in lawn and garden and paint supplies.

If people can’t afford to travel and have to stay home this summer, that gives them more reason to improve their surroundings. It appears that more consumers are deciding flowers can help them accomplish that goal.

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- David Kuack

August 2008