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Santa or Scrooge? Reputations Shaped by Recession

Santa or Scrooge? Reputations Shaped by Recession

Consider it part marketing, part empathy.

Supermarkets are trying to show their recession-friendly side to consumers. The latest examples show how they are reaching out in new ways:

• Green Hills Market unveiled a “Recession Assistance” promotion to give a 10% discount to shoppers collecting unemployment benefits.

• Sedano’s Supermarkets, a Hispanic retailer, said it will give a monthly $30 gift card to all hourly employees this year as part of a “stimulus plan.”

• BJ’s Wholesale Club began accepting Electronic Benefit Transfer payments at all locations, citing how the program “makes a difference in the lives of millions of Americans.”

Grocers aren’t the only retailers or companies pursuing these kinds of initiatives. An article in The New York Times last week outlined how other firms are offering assistance in cases of job loss, such as Jet Blue’s promise to refund plane tickets and Bigelow Homes’ offer to pay mortgages.

Recession-friendly strategies are powerful because they can tie companies closer to customers. It makes you wonder why more firms aren’t pursuing similar approaches. The bigger puzzle is why some are going the other route by leaving themselves open to criticism over how they are treating customers.

These include some Internet service providers seeking to raise prices even as costs reportedly fall. In one situation, Time Warner Cable had tried to add fees for heavy users of its Internet service, but abandoned the plan in the face of pressure from consumer groups and Congress, according to a different story in The New York Times.

Then there’s the case of credit card companies such as Visa and MasterCard, whose interchange fees have long been attacked as excessive by retailers and industry groups. That battle gained renewed energy this month after further increases in fees involving Visa rewards credit cards.

Leslie G. Sarasin, Food Marketing Institute’s president and CEO, invoked the recession in criticizing the higher charges this month: “At a time when consumers and retailers are fighting for their economic survival and just a few days after they paid their taxes, Visa’s interchange fee increases are deplorable.”

If these cards were merely products on supermarket shelves, grocers might opt for SKU elimination or replacement with private label. But consumers widely use these cards. Retail industry groups are making the case that higher fees lead to higher food costs, but interchange is a complex issue for consumers to fully grasp. That’s why much of the focus is on lobbying lawmakers, and even the White House. The deeper the recession gets, the more likely retail groups will find sympathetic ears.

This is a time for all types of operators, from supermarkets to financial service companies, to ensure they are sensitive to customer expectations. Public opinion can quickly turn against companies that are seen as recession profiteers. How quickly can opinions change? At the speed of blogs.