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
Now hold on if you Mister CEO of Tupperware want to sell me a quaility product like yors mabye you should make it in America soley, then I might listen to your rant.
I would not buy Tupperware before the A Hole CEO opened his mouth. Tupperware is a dated, expensive product that has not evolved. I use another American made product instead, Rubbermade products.
Having worked in marketing for a few decades I learned that you have to know your market and meet it where it is. Criticizing the market for not being what you want it to be will alienate your potential consumer. Time for this CEO to take a chill pill and stop blaming the market for the CEO's failure.
tupperware is still sold thru just tupperware parties, right?
if you're not in the stores, guess what! you don't SELL!
Insulting the American public in order to increase revenue? Reverse psychology doesn't really work in marketing. I think Tupperware's CEO has been sniffing too much plastic.
Isn't that what innovation is all about? Making something of desirable quality for a lower price. It's capitalism. Tupperware, make your prices better.
Mr. Goings, I'll help you sell your product to Walmart Americans, listen up. You take your line of products and put flames on them. The flames will attract the Wally World shoppers. You could also do a line of "Elvis inspired" wares.
See, thats not so hard is it?
I'd like to buy Tupperware but King Barry keeps shaking me down for more coin. Sorry.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. 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 SIX Financial Information.
Can it hit $14 billion by 2021? Some analysts think that's doable.
- Mike Bloomberg's next career: Taxi magnate?
- Oklahoma senators change tune on disaster relief
- At software giant SAP, autism is an asset
- Target blames weather for soggy results
- Chick-fil-A thrown back into gay marriage debate
- Oklahoma tornado losses could top $2 billion
- Apple's stock is slipping, but its brand value isn't
- Meet the class of 2013, the most indebted yet
- Is Abercrombie just for the 'cool kids'?
[BRIEFING.COM] Equities have continued their steady rise from the opening lows. The Dow and Nasdaq have been able to climb into the black while the S&P 500 trades with a loss of 0.3%.
The technology sector was the first cyclical group to turn positive and recent action saw the materials sector make a brief appearance in the black. Chemical producers have displayed notable strength that has overshadowed the weakness in steelmakers. The Market Vectors Steel ETF (SLX ... More
More Market News
Global markets reacted to the mixed message from the Fed by selling. But there is indication of another rally phase ahead..