Stock Market Has Gotten Ahead of the Consumer: A&P CEO
The stock market has gotten ahead of the consumer, according to Eric Claus, president of supermarket operator Great Atlantic & Pacific Tea Co.
"In our business we kind of lag the stock market," Claus told CNBC. "... We are a direct reflection of the unemployment rate. If you look at our business, we get into it late and we get out of it late, and I think that's pretty typical of supermarkets in general."
However, Claus sees significant shifts in the way consumers are shopping and he expects some of the changes will linger long past the end of the recession.
Claus has made some important observations. For example, a look into the trunks of shoppers cars shows that shoppers are travelling from store to store in order to snag the best promotional prices. They are using more coupons, buying more store brands, and trading down to less expensive products.
"The demand for ground beef versus what it was before, and baloney or mac and cheese, is significantly, significantly up," said Claus.
Claus also has seen an increase in food stamp usage and a lower rate of turnover among the store's part-time workers.
"It's stopped," he said.
This is a starkly different operating environment from a year ago. At that time, the company , which operates A&P, Waldbaums and Pathmark stores, among others, was focused on shifting to higher-end, so-called fresh formats. Now, the focus is on value.
"The U.S. is the last part of the Western world that...has had so much less discount shopping, and I think this...is going to stick too," Claus said.
"Consumers today, they are conscious about value...We really see a difference in our consumer," Claus said.
Another key change is shift from concerns about inflation to concerns about deflation, Claus said. More from Consumer Nation: Questions? Comments? Email us at email@example.com
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