Tupperware CEO blasts cheap US consumers
Rick Goings blames a 'Wal-Mart market' for his company's problems but ignores its dated domestic image.
As Tom Gara at the Wall Street Journal gleaned from Tupperware (TUP) chief executive Rick Goings' Tuesday earnings call, he's not exactly happy with the buying habits of the average cheese-product-eating, soda-swilling, dollar-store-dwelling American.
In fact, in a quarterly report made available on Seeking Alpha and dominated by the 60% of Tupperware's business from emerging markets in South America and Asia and its growth in European countries like Germany, Goings bluntly explained to Bank of America Merrill Lynch analyst Olivia Tong why his mix of products isn't succeeding in the U.S.:
We are a high-quality product and a brand. Why do we do better in Europe than we do in the U.S.? Hey, take a look at the average brand of cab that you get in the New York cities. I mean, they're filthy, they're junk. Get in a cab over here, it's a Mercedes or an Audi. The U.S.A. is basically a Wal-Mart (WMT) market. Our top-tier products like the Microsteamer or the Ultraplus that are 100-year-old products, hard to sell them in the U.S., because that's a discount market over there.
That most Americans have no idea what the Microsteamer reheatable steamer/colander and Ultra Plus casserole dish lines are bolsters his point a bit. Still, The Huffington Post argues that most Americans aren't springing for $30 steamers they can hand down to the grandkids, because the money just isn't there.
The Social Security Administration puts the median annual wage at $26,965, while the Corporation for Enterprise Development notes that most Americans are one emergency away from financial ruin. Combined with stagnant unemployment numbers and a recent downturn in the gross domestic product, the loss of the payroll tax break has taken a toll on U.S. consumer confidence.
But that's letting U.S. consumers off a bit too easy. As Goings says, "Europe buys quality, Japan buys quality." As the Guardian acknowledges, Japan just fell into a recession, while Europe's austerity measures and bailouts couldn't prevent a double-dip recession there. The U.S. isn't the only nation going through hard times, yet it's the one coping with disposable plastic from the supermarket instead of slightly costlier product that will last far longer.
What that has to do with the brand or reliability of cabs in either market is still anyone's guess, but the greater point about Americans' fear of the up-front cost shouldn't be lost on a country that made Wal-Mart the largest retailer in the nation and No. 2 on the Fortune 500 one cheap plastic resin chair at a time. Just because it's true, however, doesn't make it a great thing to say to potential customers.
Nor does that truth make it Tupperware's only problem in the U.S. market. Sure, its products aren't cheap, but they're also attached to a dated image of mid-century American domesticity that no longer exist. Those Betty Draper-style semi-mute subservient housewives in pearls have faded into suburban history and aren't throwing Tupperware parties anymore. Even Goings admits that one of his "dumb" decisions in the U.S. was "recruiting younger women by giving her products that a 50-plus-year-old woman would like." Maybe American consumers can do better than a $1.99 pack of disposable plastic containers, but why should they buy Tupperware if the product they're being sold doesn't differ much from the sets their parents and grandparents are handing down for free?
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I remember my mother going to tupperware parties, given by hostesses. They were small franchises and did home parties and were a "stepped opportunity" business.
Tupperware is expensive, gimicky and not worth the money. If you you can't change
your business model to make your products better and your business profitable that
is your fault. Don't blame the American public for being cheap.
The facts are here in this article,But the problem I think is the fact that I made $25,000 dollars a year in 1977
and I make less then that today ! I could buy a new CAR nice for $8500 dollars. Fuel for the car then $0.60 a gal.
Now $4.00 gal. etc. on and on
I have 20 yr old Tupperware that have no lids or doesn't close all the way. I was disappointed with the CEO of the company calling American's cheap. You need to remember we are responsible you can hold the title.
Because of this insult to consumers, calling them "cheap", now I will no longer consider buying any more Tupperware!
I never thought it that special anyway. I always hated how it absorbed smells, and became discolored so easily. And the lids always got warped after awhile.
So what if it goes under? There are a zillion products out there in any price range that could fill anyones need for anything and probably better than Tupperware. What a stupid name anyway!
Our market is flooded with cheap products...no doubt. But is Tupperware quality?
Who wants to store food in plastic? Not healthy... and doesn't hold up.
Get with it , Monsieur Crabatron.
YOU GET PRODUCTS JUST BY BUYING PRODUCTS THAT COME IN FREE PLASTIC CONTAINERS AND THEY OUTLAST TUPPERWARES CRAP
In reality I have been ditching plastic like the plague recently. I have been going old school like steel pots and pans as well as glass to store my stuff. It is in fact more expensive but I suspect plastics in our society will keep peeling layers of its cancer causing potential. It is also our own misuse of it that is the issue with microwaving containers or putting them in the dishwasher when we aren't supposed to. Remember that pasta you heated up in the microwave and it left a big stain on your plasticware? The food penetrated your container....and the plastic from the container penetrated your food. There is a reason why Coke in a plastic bottle just doesn't right.
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Like rival Wal-Mart, it's pointing the finger elsewhere for its problems while other retailers are coping just fine.
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