Reuters reports that consumers buying habits are changing because of the recession. They are buying only what they need at stores instead of loading up on what they think they might need. Earnings reports indicate that consumers are also going through pantries and cupboards to use up goods they already have before buying new merchandise.
As companies like Colgate-Palmolive and Procter & Gamble report earnings, one thing becoming clear is that consumers are now using up everything they have in their cupboards before buying replacements.
Call it "destocking," "pantry deloading," or "inventory drawdowns," but whatever it's called, it cuts into sales - for retailers and manufacturers. As consumers are using up the shampoo or soup they have on their shelves before buying more, retailers are also getting rid of excess inventory before buying more from manufacturers.
With the economy in recession, consumers have every reason to be frugal. On top of that, manufacturers have raised prices over the past two years in order to cope with soaring commodity costs.
The price of toiletries and medicine can really ad up so it's not a surprise the recession has people going through closets and medicine cabinets to make sure they don't already have products they haven't used.
