Archive for September 15th, 2010

First Germany, now Britain … austerity is becoming cool.

September 15, 2010

Punch line: Germany pitched austerity over spending sprees … appears that the UK may be catching ‘austerity fever’.

Any chance the US catches it?

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From Slate …

Austerity is being touted as the solution to Britain’s economic woes.

On Oct. 20, the government will announce $128 billion worth of spending cuts, and many seem positively excited about it. 

“We will be able to look our children and grandchildren in the eye and say we did the best for them.”

“We have run up debts, despoiled the planet, and allowed too many of our institutions to wither.”

By contrast, the government’s forthcoming austerity budget will value “long-termism” over “short-termism” and eliminate “the dead weight of our debt, and our failings” so that future generations can flourish.

Nobody is talking about austerity in America.

On the contrary, Republicans are still gunning for tax cuts, and Democrats are still advocating higher spending.

Politicians use euphemisms about “eliminating waste” or “making government more efficient,” as if no one had ever thought of doing that before.

You just don’t hear anyone in America talking about cuts in Medicare, Medicaid, or Social Security, the biggest budgetary items

In Britain, by contrast, everything is on the table: pensions, housing benefit, disability payments, tax breaks.

Source: Slate, Why are the British so excited about spending cuts and austerity measures?, Sept. 13, 2010
http://www.slate.com/id/2267165/

Posted in Budget - Deficit | 1 Comment »

Is there already a glut of homes for rent?

September 15, 2010

I’ve been advocating tax changes to induce private capital to buy up distressed residential properties and rent them for at least a couple of years.

This article caught my eye …

Says it’s already a big trend – without tax incentives.

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Excerpted from: Real Estate Channel, Will Growing Rental Trends Undermine U.S. Home Sales?, 08/23/10

There is a far-reaching change occurring now which threatens housing markets around the country.

There is a “psychology change” in the mind of consumers: 76% now believe that renting is a better option than buying in the current real estate market

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As early as the summer of 2005, the slowdown in speculative buying in the hottest metros caused a flood of investor-owned homes to hit the rental market. 

Many of these homes became rentals because the investor was unable to flip the property. 

The glut of rental homes in bubble markets such as Phoenix had caused rents to plunge to half the cost of owning that same home by the beginning of 2008. 

Many rental properties were attracting “displaced homeowners”. 

What happens after a single-family foreclosure is that “the family moves into a rental house down the street.”  The irony is that the home they are moving into may also be a foreclosure that had been bought by an investor.

The attraction of renting now is boosted by the growing vacancy rate for both houses and apartments. 

With nationwide vacancy rates now well over 10%, it is extremely difficult for a landlord to even consider raising rents. 

Since roughly 25% of all home sales are currently going to investors paying cash, large numbers of homes will continue to be thrown onto the rental market. 

http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-rent-versus-buy-a-home-david-neithercut-equity-residential-wall-street-journal-homes-for-rent-condos-for-rent-national-apartment-association-3040.php

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Less isn’t always more … just ask Walmart.

September 15, 2010

TakeAway: Walmart’s merchandising strategy called Project Impact knocked thousands of items off the retailer’s shelves and cleared the aisles of promotional merchandise.

And, the retailer has moved to give regional and store managers more power over what their stores carry and how merchandise gets displayed.

Both  programs will have a major impact on a host of marketers over the next year. 

A few brands are immediate winners, though many of the category resets that will add back thousands of items won’t occur until early 2011.

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Excerpted from AdvertisingAge, “Walmart’s Merchandising Shift Has Five Brands Dancing in Aisles” By Jack Neff,September 13, 2010 

The program to reinvigorate growth at Walmart always focused on 10 words.

Seven remain operative, including “Save Money.  Live Better”, the slogan adopted in 2007, and “Fast, Friendly, Clean,” which refers to efforts to improve the store environment and shopping experience. 

Three — referring to the “Win, Play, Show” merchandising and assortment strategy — have been tossed out of the lexicon, according to several people familiar with the matter.   “Win, Play, Show,” reduced assortments widely and often let price leadership over competitors narrow or disappear entirely in the “Play” and “Show” categories.

Reversal of that, along with return of merchandise to aisles, or so-called “Action Alley,” is having the biggest impact on brands.

Among the beneficiaries so far, according to people familiar with the matter:

HEFTY ONEZIP: Along with Glad, it got eradicated from the food-bag aisle after a Walmart category review last year. Starting in April, it got a small amount of space back, and more recently it has fully regained its shelf space.  

PAMPERS: Since Pampers isn’t distributed at Costco or big dollar chains Dollar General and Family Dollar, Walmart takes on added importance for the brand. It’s one reason P&G is widely believed to “over-index” at Walmart, and why it should broadly benefit from increased display space at the giant retailer. 

WISK: This detergent brand had been booted from retailers in the recent years and hanging on to distribution in only around 10% of Walmart stores. Timing proved fortuitous, as Wisk was planning a formula upgrade and major marketing push for August just as Walmart was relaxing its assortment stance. The result is full national distribution for Wisk.  

ELMER’S GLUE: Timing is everything, and the decision to open up “Action Alleys” again in many stores just in time for back-to-school season put this staple of the season in high-traffic areas. 

CHEX MIX: A reset of the snack section recently has brought the item-count for this General Mills brand from three up to eight. 

Edit by AMW

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Full Article:
http://adage.com/article?article_id=145845

 

Posted in Mktg - Product Line Mgnt, Retailing | Leave a Comment »