CHICAGO — The 60 percent off sign at Elan Fur isn’t much different from the others filling the storefronts on Chicago’s Michigan Avenue. But good luck finding a similar deal next door at Apple Inc.
Even as shops vie for customers by offering massive markdowns, shoppers are still lining up to pay top dollar for coveted goods from Apple’s iPods to designer footwear.
The ever-popular Nintendo Wii gaming console continues to sell out at the list price of $249, Avon cosmetics just boosted prices, Nike is releasing its newest Air Jordan with an astonishing $190 pricetag and designer water can still command as much as $3.99 a bottle.
While almost everything goes on sale eventually, some products remain untouched by discounts, or nearly so, even in this dismal economy. The reasons fall mostly into three categories: old habits die hard, brand loyalty runs deep, and the Economics 101 law of supply and demand means the most sought-after brands can command the top prices.
Beyond that, there are some items consumers stubbornly just won’t forgo — sale or not — no matter how hard they’re trying to stretch their budget.
“If you infuse enough values into the product, people will pay full price,” said Candace Corlett, president of the consulting firm WSL Strategic Retail. “There are certain categories … where there are no substitutes accepted. It’s infusing your brand with those things that people then say, ‘I have to have the real thing.’ ”
But even companies with products that have traditionally held their value in tight markets are making some concessions, and the number of items that can charge a premium is dwindling as consumers make complicated and deeply personal choices about how they’ll spend their money.
Beverly Bailey isn’t buying clothes at full price. But the stay-at-home mother from Kenilworth, Ill., will still shell out top dollar for organic milk and fresh produce for her family.
“I’m shopping a lot less and I’m looking for bargains when I shop,” she said. “(But) we have not cut back on those items because we think they’re related to health, and we don’t want to compromise on health.”
Heather Fox, a 42-year-old waitress from Huntsville, Ala., scours stores for sales and clips coupons for food and clothing discounts. But she won’t cut corners when it comes to her Marlboro Lights.
“You’ll find that most smokers won’t switch from the brand they have,” she said after a puff.
Morningstar analyst Kim Picciola said customers often justify paying full price by cutting spending in other areas.
“People are making choices, there’s no doubt about it,” Picciola said. “They’re making choices about how they want to spend their discretionary dollars, and in some cases they’re still willing to pay full price for brands they’re loyal to.”
Corlett puts it differently. “You may drink less Coke, but you’re not giving up Coke,” she said.
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