Consumer confidence drops for October

Jennifer McClelland | RSS | Wed, Oct 28 2009 | 0 Comments

The Consumer Board released October’s Consumer Confidence Index number today and it was below what anyone was expecting. It fell to 47.7 for the month which is the Board’s second lowest reading since May.

to put the number into perspective; a number higher than 90 means that the economy is doing well and anything above 100 says that there is strong growth in the economy. The lowest that the Consumer Board has ever measured was the record low of 25.3 in February 2009. It only took a few months to climb back up to 53.4 last month.

The reason that consumer confidence is so important is because it is the number that tells how much consumers are spending on items. Because spending on these items accounts for 70% of the United States economy (according to the government), it is an important economic indicator.

So, what does a drop in the consumer confidence index number mean? It shows that consumers have a grim outlook of the future.

According to Lynn Franco, the director of the Conference Board’s Consumer Research Center, “Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays.”

This news is not welcomed by the retailers in the country. Last year, spending around the holidays fell to levels not seen since the 1960’s. With so many retailers across the United States still hurting and struggling and also going out of business, many of them are counting on this holiday season to prop them up and maybe put them in the black for the year.

The Consumer Board gets the Consumer Confidence Index by sending surveys to 5,000 homes across the country. For October’s numbers, the cutoff date was October 21st.

I honestly think all the figures and indexes like this put people into worry-mode. When people are truly worried about their jobs and their finances they don’t spend. For the past couple of months, people have been worried about their income even with plenty of job security. Jobs aren’t being lost at the rate that they were and there are plenty of places where people are working and not having to worry whether or not their job will be there the next day.

The Consumer Confidence Index was something that we didn’t have before the 60’s and it seems as though the country’s consumer spending was not that bad through the 50’s (after WWII anyway).

What do you think about the Consumer Confidence Index and any of the other financial indexes that come out telling you how the economy is doing? Are there any of these indicators that you follow to tell you how things are going?

I believe I would follow the unemployment numbers a bit more closely than this one.

Source

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Tags: consumer confidence index, going out of business, economic indicator

Frozen yogurt is flourishing in the recession. Could it have something to do with summer?

Jennifer McClelland | RSS | Tue, Jul 21 2009 | 5 Comments

While there are several stores all across the country going out of business and leaving our shopping and strip malls barren, you can find a frozen yogurt store flourishing in the current economy, even if the price is usually as much (if not more) than a Starbucks drink.

Frozen yogurt is a relatively new idea in stores. Sure, there’s “always” been TCBY, but the recent emergence of stores like Pinkberry in California has led to a rediscovery of the (sometimes) low calorie frozen treat. There are new stores popping up now that let customers choose how much (or how little) of the frozen yogurt they want. Yogurtland and Menchie’s are two of the stores that offer self serve as part of their offerings. At the store, you can control the quantity of yogurt you get and can mix flavors and toppings in.

The self serve stores do charge per ounce, which is typically 30 to 50 cents an ounce. With a charge like that, the average cup-sized serving comes out to around $3. That is, of course, unless you are my husband, who would likely have at least two cups in there and every fruit topping in the store.

The idea of having self service yogurt stores is a hit for some that would not be getting that much ice cream to begin with. If you can only eat so much, why not be able to pay per ounce when you will actually get what you will eat rather than having to pay for something you can’t eat and will end up wasting?

The companies that supply the stores with their frozen yogurt goodness are also having a great summer. YoCream International had a sales increase in 2008 of 52% and in the first half of 2009 – 70% boost when compared to last year.

It costs about $400,000 on average to open a frozen dessert franchise according to FRANdata. As a comparison, it costs almost a million to open a sit down restaurant and about $200,000 to open a party supplies store. With the insane growth that frozen yogurt has seen, it is no wonder the stores are popping up all over the place, with the relative low cost to open and high return.

With self serve options available, you can also save on staffing which is pretty appealing to people who want to open stores around places like a college campus.

MSNBC

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Tags: pinkberry, going out of business, strip malls