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
The reason In Europe cab drivers drive mercedes and audi is because those cars are diesel and they are cheaper that a ford or a toyota. I know that from spending allot of time there.
Other countries have the tendency to buy only what they really need so they do buy quality product most of the time. In US we buy because we can and if we don't like it we just throw away and buy something different
I have one tupperware container. I throw my lose change in it because it did not keep food fresh.
Cheap ??? My wife and I cook using American made stainless steel cookware we bought a long time ago, we use American made dinnerware and went out of our way (and paid) for our Revolutions tableware which is also American made in the old Oneida factory. We also use Pyrex products.
Where is Tupperware produced ?? This A-hole is just concerned with his possibly diminishing income. You want the Chinese to make your products.....sell to the Chinese too !!
1. Is Mr. Goings related to Mitt Romney? Sure sounds like it.
2. Have they considered making a value line? Most companies have.
3. Who would buy anything from someone who calls you a piece of trash?
4. Does Tupperware value it's employees like they do the top brass, or is all about the upper crust?
Food for thought!
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] Sellers remain in control with the Russell 2000 now down 2.0%. Including its current loss, the index is now lower by 5.6% in July. Meanwhile, the Dow (-1.1%), Nasdaq (-1.7%), and S&P 500 (-1.3%) entered the session with modest July gains that have now been turned into losses between 0.3% and 0.8%.
At this juncture, health care, technology, and telecom services are the only sectors that are on pace to register July gains. Technology and telecom services sport ... More
More Market News
3 stocks will be in the spotlight Thursday as investors try to make sense of the numbers from the sector.
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'