Retailers try to lure shoppers helped by stimulus checks.
You may have to wait until May to see your economic stimulus check, but some retailers already have their sights set on how you will spend it.
Both Kroger Co., one of the country's largest grocers, and department store operator Sears Holdings Corp. are already offering discounts and freebies to consumers who turn the rebate checks into gift cards.
Other retailers like Home Depot Inc. are launching advertising campaigns to helpfully suggest ways to spend those extra dollars.
"Certainly it does seem like retailers are planning for a battle on where to spend that check," said Chris Donnelly, a partner in the retail practice at consulting group Accenture. "We're going to see a lot of competition from a promotional standpoint among retailers really trying to lay claim to that."
The checks, set to arrive in mailboxes and bank accounts beginning next month, are part of an $168 billion economic stimulus plan passed by Congress. Under the plan, individuals who have filed their tax returns for the year can receive up to $600 and families can get up to $1,200.
The checks are meant to provide a cash cushion for strapped consumers, as well as a cash infusion for retailers struggling to grow sales in a weak economy where shoppers are increasingly cutting back.
Retailers who cater to consumers' needs rather than wants may see the most benefit, said Morningstar analyst Mitchell Corwin.
"It's your grocery bill, it's your electric bill, it's your fuel bill," Corwin said. "Just for everyday type purchases, consumers are facing higher prices today than they ever have."
If consumers use the checks to buy the necessities, that could be great news for Kroger. The company said Wednesday they will offer shoppers free groceries through a gift card program. It works like this: if a customer turns his $300 tax refund or economic stimulus check for a Kroger gift card, he will receive an additional $30 on the new card. A $600 check would garner another $60 dollars and a $1,200 check would warrant another $120 to spend in groceries.
Some also coordinated marketing campaigns around the program. Online travel company Expedia Inc., for example, launched a campaign called "The Great Tax Rebate Vacation."
Great News For Kroger?
People have to eat. They are going to keep eating and now Kroger is effectively offering 10% off on food, something consumers were going to keep buying anyway. Where's the stimulus in that?
There are millions of homes headed for foreclosure over the next year or two. What is $1,200 going to do above and beyond providing one month's rent?
Seeking a Slice of Your Rebate
Nonetheless everyone is Seeking a Slice of Your Rebate.
Yesterday, as Americans were rushing to pay their taxes, Sears was thinking about next month's promised rebates -- and, like other retailers, hoping for a share.
From May 14 to July 19, Sears Holdings will give a 10 percent bonus to anyone who shows up at a Sears or Kmart cash register to buy a gift card with a stimulus check.
http://globaleconomicanalysis.blogspot.com/2008/04/no-stimulus-from-stimulus-checks.html
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