This was the headline in AdAge this week “Weight Watchers, Jenny Craig Suffer as Consumers Have Less Money to Spend on Losing Weight.” It went on to say, ”As gas and commodity prices rise, consumers are finding themselves with fewer spare dollars to reduce their spare tires. As a result, marketers of organized diet programs such as Weight Watchers and Jenny Craig are expected to feel the pinch.
“It’s definitely a discretionary dollar,” said Michael Binetti, an analyst who lowered earnings-per-share guidance for Weight Watchers last week. Even though the iconic diet program enjoys an advantageous position in that it has strong brand equity and low start-up costs, Mr. Binetti said the 20% of Americans who describe themselves as being on a weight-loss regimen have increasingly been reporting that they are “on their own diet.”
Well what isn’t a discretionary dollar? If we want to go somewhere, we make a choice to put over-priced fuel into the tank and go – nothing is compelling us. What about getting to work? You could take a bus. Walk. Carpool. But we don’t. We decide we’d rather use the money and have the freedom of our car or SUV. Everything is discretionary income; this is important for any retailer, service business or manufacturer to remember when reading such articles.
This article was based on the expectation people will cut their spending to lose weight – it hasn’t even happened yet.
If a weight-loss business were my client I would try several approaches but one might be a direct mail or online marketing campaign, “Perhaps you’ve discovered you eat more when you’re stressed – like now. We can help.” Or “There’s A Reason They Call It ‘Comfort Food.’ Break the link. We can help.”
In this economy you either dumb-down your expectations, or slash and burn costs or you take the challenge and run away with your competitors’ business. My advice? Run.
