Page 12 - ARUBATODAY

A12 BUSINESS
Monday 3 april 2023
$90 cream and $10 toothpaste:

Companies target big spenders

By ANNE D'INNOCENZIO
AP Retail Writer
NEW YORK (AP) — Com-
panies from toothpaste
makers to even discounters
are adding more premium
items like designer body
creams and services as
they reach out to wealth-
ier shoppers who are still
spending freely even in the
face of higher inflation and
a volatile economic envi-
ronment.
Think $10 toothpastes and
$90 creams on supermar- A woman passes by the BeautySpace NK display at the Walmart
ket shelves. Supercenter in North Bergen, N.J., on Thursday, Feb. 9, 2023.
Retailers and consumer Associated Press
product companies felt
justified in raising prices to Last year, Colgate-Palmol- time offering that was prici-
offset higher costs from ive made some waves by er than regular steak.
gnarled supply chains and announcing its $10 three- In a conference call with
Russia's war in Ukraine last ounce stain remover tooth- investors in February,
year. But as those financial paste, its first in the U.S. at Chipotle Chairman and
pressures ease, some are this price, noting that pre- CEO Brian Niccol said
looking for new ways to mium products were essen- the chain — which raised
pump up sales and profits tial to raising prices. prices by 13.5% in its most
by focusing on premium Meanwhile, Five Below recent quarter — is seeing
items amid an overall sales — a chain known for sell- higher-income customers
slowdown. ing toys and other impulse visit more often.
"If you want to hedge items for $5 and below — is Critics like Rakeen Mabud,
against the economic creating a new store con- chief economist at left-
challenges, you hedge cept: Five Beyond, which leaning The Groundwork
your bets by chasing after sells items at $6 and higher. Collaborative, believe
the upper income," said Last year, the Philadelphia such moves will only in-
Marshal Cohen, chief in- chain converted 250 of its creasingly shut out the less
dustry adviser at market re- 1,300 stores to the concept economically fortunate.
search firm Circana. and plans to expand that "As products get more ex-
Many companies that conversion to another 400 pensive and companies
normally cater to middle- stores this year. are focused more on the
income shoppers are un- Five Below CEO Joel An- wealthier segments of our
leashing a bevy of pre- derson told analysts on a population or our consum-
mium items in an attempt call in January that those ers, everyday people are
to grab consumers with who buy Five Beyond items increasingly underserved
more money to spare. But spend more than twice as and increasingly unable to
that could leave fewer op- much as those who buy afford the products they
tions for consumers with less only Five Below items. need," Mabud said.
money to spare. Some like Chipolte Mexi- When AMC Entertainment,
Walmart, for instance, fea- can Grill have even publi- the world's largest cine-
tures high-end $90 creams cized they are not pursuing ma chain, announced in
in its beauty aisles at se- discount-loving shoppers. February it was rolling out
lect stores. Ketchup maker The restaurant chain has a new three-tier pricing
Heinz released a line of been frank over the past system at all its locations
chef-inspired condiments year about how its price by year end that would
called Heinz 57, including increases have scared off require customers to pay
a 11.25-ounce container of lower-income consumers. more for better seats, actor
infused honey with black Last fall, it introduced Gar- Elijah Wood — best known
truffle that costs roughly $7. lic Guajillo Steak, a limited- for his portrayal of Frodo
Baggins in "The Lord of the
Rings" film trilogy — blasted
the move on Twitter.
"The movie theater is and
always has been a sacred
democratic space for all
and this new initiative by
AMCTheatres would es-
sentially penalize people
for lower income and re-
ward for higher income,"
he wrote.q