By Andrea K. Walker , andrea.walker@baltsun.com|January 09, 2009
Free antibiotics. Cheap steak dinners at luxury restaurants. Heavy markdowns on clothes and furniture. The option to return a new car if you lose your job. Discounted tickets to the symphony.
As the country's recession has pushed consumers to curb their spending, companies are offering some radical promotions to snare their business. Industry experts predict that companies will have to continue their aggressive discount strategies to survive after more dismal reports yesterday from the nation's retailers showed that consumers kept pulling back on spending during the holiday shopping season.
Restaurants such as Ruth's Chris Steak House and the Cheesecake Factory have created "economy-proof" or cheaper menus. Grocery stores such as Giant Food and Wegmans Food Markets Inc. have lowered their prices, including on some antibiotics that won't cost consumers anything at all. Hyundai, well aware that many Americans are too worried about losing their jobs to buy a car, vows to take back a vehicle from anyone who finds himself in the unemployment line. And several arts organizations are offering discounts to recently furloughed state workers.
This past holiday season saw some of the steepest markdowns in years at department stores, discounters and other retailers trying to lure in shoppers. But more companies seem to be upping the ante, as the country dives deeper into a recession and consumers remain scared to spend.
"Everybody is rushing to bring out a dollar menu, $4 menu or some other big promotion," said Roland Rust, chairman of the marketing department at the Robert H. Smith School of Business at the University of Maryland. "They're trying to have some kind of stopgap approach that will keep them customers during this rough period of time."
Retailers said yesterday that the critical holiday season was the worst since at least 1969, with the International Council of Shopping Centers reporting that sales in November and December dropped 2.2 percent from a year ago. Even Wal-Mart, which had seemed to be immune to market conditions, did worse than expected.
The climate has forced many stores out of business, and retail experts expect a wave of closings in coming weeks. Macy's said yesterday that it will close 11 stores, though none in Maryland. Women's apparel chain New York & Co. said it would close up to 50 stores during the next five years, but it didn't disclose where.
