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?
More on moneyNOW
I agree with him. We've are the sole blame for our jobs going overseas. We bought cheap therefore our companies can't compete and they go overseas to produce products cheaper so that the company and its investors can get rich. While the everyday American worker slowly at first and rapidly now lose their jobs due to their jobs being shipped overseas. Then we American take a lower paying job and say to ourselves we can't afford to pay for the USA product because we don't get high wages anymore. Soon there will be NO jobs for the average unskilled person with just a high-school diploma. You are now seeing college graduates come out of college and are unable to find jobs, upper management people are gone too. Now we have so many people on relief in some form or other or homeless, that the State/Federal Government has no tax dollars to continue these programs. The one that are working are complaining about helping the poor. "They should find a job, Go to Work!" I can't afford to pay these taxes. So soon these programs will be gone and then we will become a 3rd. world country. This will happen exactly when someone finally admits that they can't or won't pay for the national debt. I wonder who will own us, China, Germany, India, Mexico, who. So many illegals are in our country to works jobs at a lesser wage, of course no one will admit this. Our USA companies want to pay less & less so they can get bigger profits, so all the cooks, waitresses, cleaning ladies in hotels, etc. are all illegals. In 1986 we gave amenesty to 7+ million illegals when their families came over it was more like 10 plus million. I was told by an elderly lady who moved from Arizona years ago to Charlotte, N.C., that you haven't seen mean until you live in area of more illegals than US citizens. She said killings of all age group and crime of every kind were taking place. I'm looking forward to it, aren't you. Today I saw on the news that illegals from Mexico are in USA and are fraudulently filing taxes & getting large tax refund checks. How about that.
Serves you right Mr big shot, putting people out of work and outsourcing... goings, goings, GONE!
My image of tupperware: orange, tan & brown.
Even the toys.
Then, as time goes on, it gets, greazy and cut up...and the animals chew on the toys...
But the greasy feeling...bleh...especially on those rigded tops....
Then, I wonder what is oozing from the plastic itself? Diabetes?
So, I'll take glass & stainless & the ceramic mixing bowls, thanks.
If I see Tupperware, I see 'cheap '70's putting the head in the soil' kind of culture...
QUALITY???....He DOES know we are talking about PLASTIC??
SERVICE....I can return RUBBERMAID back to the store I purchased it if theres a problem. I CAN NOT buy Tupperware in a store,,,if theres a problem i HAVE to mail it to them!! Serioulsy...they want me to MAIL a piece of $10 plastic...then WAIT 2 weeks to get it back??
What part of "ITS A QUALITY PRODUCT" is this man SO proud of!?!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
These hot movers could rise by double digits in coming months.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'