Business & Economy
Eighty-Five Percent of Consumers Say the Price Needs to Be Right Before They Shop, Reports NPD PDF Print E-mail
News Releases - Business & Economy
Written by Kim McLynn   
Wednesday, 25 April 2012 14:03

Determining the right price an increasing challenge for retailers

Port Washington, NY, April 24, 2012 — Price trumps sales and special deals, customer service, and convenience as a factor in deciding where to shop for the majority of U.S. consumers, according to The NPD Group, a leading market research company. NPD’s The Economy Tracker*, a monthly monitor of consumer sentiment about the economy and spending, finds that in the most recent survey (March 12) 85 percent of U.S. consumers say that price will be an extremely important/important factor in deciding where to shop in the near future, ten percent more than those who feel sales and special deals are extremely important/important.

How important do you expect that each of the following factors

will be in where you decide to shop in the next 3 months or so?

Expected Consumer Requirements of Purchase

 

Source: The NPD Group/The Economy Tracker, March 2012

By income, 87 percent of those in the household income bracket of $25 to 50,000 selecting price as extremely important/important, 85 percent in the $50,000 to $100,000 income bracket, and 82 percent in the $100,000 plus bracket, according the The Economy Tracker. Seventy-nine percent of young adults, 18 to 34, 86 percent of 35 to 44 year-olds, 88 percent of 45 to 54 year-olds, 89 percent of 55 to 64 year-olds and 86 percent of 65 and older said that price was extremely important/important.

“Shoppers are now savvier when spending money. They have new ways of gauging the marketplace – they can compare prices on the Web while at home or while standing in a brick-and-mortar store with their smartphones,” says John Deputato, senior vice president, advanced analytics at NPD. “We certainly have moved to a time of calculated consumption for shoppers… and price has come to the forefront of the purchase decision.”

Deputato points out that the sophistication of consumers when it comes to price, changes to shopping habits, and the soft U.S. economy has made the decision to set retail prices not only more difficult but more strategically critical for both retailers and manufacturers.

“Manufacturers and retailers recognize that setting the right pricing strategy is a competitive advantage in the marketplace, but pricing is more difficult today than it was prior to the recession,” says Deputato. “We’ve been working with the top retailers and manufacturers conducting price elasticity research to understand the wide range of potential impact on profits depending on the possible pricing decisions. Prices can’t arbitrarily be set, it takes information and a thorough thought process to come up with the right price.”

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*The Economy Tracker Methodology:

The Economy Tracker is based on online surveys completed by approximately 1,500 members of NPD’s online consumer panel in each month. The sample is fielded to a U.S. representative sample; the completed responses are weighted and balanced back to U.S. Census targets. The survey has a margin of error of +/- 2 percentage points overall.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 2,000 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, entertainment, fashion, food, home and office, sports, technology, toys, video games, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us on Twitter at https://twitter.com/npdgroup.

 
Illinois Supports a Gaming Solution PDF Print E-mail
News Releases - Business & Economy
Written by Scott Burnham   
Wednesday, 25 April 2012 13:11
New poll: Illinoisans overwhelmingly support gaming solution
Residents ready for economic benefits, jobs new legislation will bring

More than 60 percent of Illinois residents support a gaming solution that includes more casinos and the addition of slot machines at racetracks as a solution to create more than 20,000 jobs and generate nearly $200 million annually for the state, a newly released poll reveals.

The Alexandria, Virginia-based Public Opinion Strategies poll of 800 likely Illinois voters conducted April 10-12 shows that Illinois residents overwhelmingly back legislation to expand gaming to help generate new revenue.

When asked if they would “support or oppose a proposal to generate revenues to state and local governments by increasing the number of slot machines allowed at riverboats, allowing slot machines at racetracks, and by adding a land-based Chicago casino and four additional riverboat casinos,” 62 percent of voters responded that they supported it, compared to 33 percent who opposed it.

“Illinoisans are sending a loud and clear message that they strongly support gaming legislation that will bring sorely needed economic benefits throughout the state during these challenging budget times,” said Illinois Revenue & Jobs Alliance Chairman Bill Black. “They have no appetite for lawmakers raising taxes or cutting essential programs like education, health care and safety net services that impact our most vulnerable residents. This legislation is an attractive solution that comes at absolutely no cost to taxpayers.”

The poll was commissioned and issued by the newly formed Illinois Revenue & Jobs Alliance (IRJA), a growing statewide consortium of more than 70 labor organizations, business groups, farming and agribusiness interests, racetracks and horsemen associations, and local municipalities, all committed to the creation of new jobs and state revenue that expanded gambling would bring.

Those surveyed overwhelmingly oppose the alternative proposal discussed by some lawmakers to subsidize racetracks in lieu of permitting slot machines at those venues. According to the poll, 76 percent of respondents favor slot machines at racetracks, compared to just 16 percent who favor an annual subsidy.

“It’s clear that Illinois residents favor initiatives aimed at creating jobs and increasing revenue,” Black said. “It’s a no-brainer compared to a subsidy that would cost the state money.”

Last week, the IRJA issued an independent study by the Spectrum Group showing that that pending legislation in Springfield would generate nearly $200 million in additional state tax revenue and admission fees each year along with $377 million in initial licensing fees while creating nearly 20,500 jobs throughout Illinois. The study also revealed that there is room to accommodate expansion without reaching a saturation point.

According to the poll, broad support exists throughout the state for Senate Bill 1849, which calls for new casinos in Chicago, Lake County, south suburban Chicago, Rockford and Danville; additional slot machines at existing casinos and the addition of slot machines at the state’s six horseracing tracks.

Support for SB 1849 is highest in the Collar Counties where 70 percent of respondents favor the proposal, but support is strong throughout Illinois: 68 percent in favor in Northern Illinois; 61 percent in favor in Southern Illinois; 60 percent in favor in Cook County; and 54 percent in favor in Central Illinois.

“It’s very telling that the areas of the state that support gaming the most are the very same areas that already have casinos,” Black said.  “This shows that these communities have experienced no grave social costs from their proximity to legalized gaming, and also that there is a substantial market demand for more of it.”

The most popular components of SB 1849 were increasing the number of slot machines at existing riverboats (69 percent) and allowing slot machines at the state’s six horse racing tracks (68 percent). Meanwhile, 64 percent favor authorizing four new casinos in Danville, Lake County, Rockford and the south suburbs and 62 percent support authorizing a land-based casino in Chicago.

According to the poll, 55 percent added that they would be more likely to vote for a state legislator who supported gaming expansion in the next election, compared to 30 percent who would be less likely to vote for a lawmaker who opposed it.

Why Senate Bill 1849?
Creating More Jobs
Illinois will realize economic benefits through the expansion outlined in SB 1849, the Spectrum study indicated. The legislation would create 20,451 new jobs and more than $1.5 billion in personal income, including 9,800 full-time direct jobs with $323 million in annual wages as well as more than 4,500 construction-related jobs, translating into nearly $475 million in wages, benefits and taxes. The expansion allowing for slots at horseracing venues would create 2,723 full-time jobs at racetracks and 1,038 full-time construction-related jobs at those venues. Additionally, SB 1849 would provide a stable foundation for the preservation of nearly 37,000 agribusiness jobs.

Generating More Revenue
According to the Spectrum report, projected gross gaming revenue in Illinois would reach $3.28 billion annually by 2016 if SB 1849 were enacted – a 75 percent increase over the $1.87 billion projected if no expansion occurred. SB 1849 would translate into a total of $809.2 million per year in taxes and admission fees for the state, or an increase of $195.3 million, the study found. In addition, the state would receive an additional reconciliation payment of $1.17 billion and $377 million in initial licensing fees.

About the Illinois Revenue & Jobs Alliance
The Illinois Revenue & Jobs Alliance is a growing statewide consortium of labor organizations, business groups, farming and agribusiness interests, racetracks and horsemen associations, and local municipalities committed to the passage of SB 1849 which calls for the expansion of gaming in Illinois, including slot machines at racetracks. The Illinois Revenue & Jobs Alliance is committed to creating new jobs, protecting existing jobs spurring new economic development and generating more revenue for the state. For more information, visit www.IllinoisJobsAlliance.org.

IRJA Members Include:

Arlington Heights Chamber of Commerce
Arlington Park Racecourse
Association of IL Soil and Water Conservation Districts
Balmoral Park Racetrack
Chicago and Downstate Roofing Contractors
Chicago Barn to Wire
Chicago Rockford International Airport
City of Danville
City of Loves Park
City of Rockford
City of South Beloit
Collinsville Chamber of Commmerce
Comcast
Coronado Performing Arts Center
Cumulus Media
Discovery Center Museum
Fairmount Park Racetrack
Greater O'Hare Regional Business Association
Greater Woodfield Chicago Northwest Convention Bureau
Hawthorne Racecourse
Illinois AFL-CIO
Illinois Association of Agricultural Affairs
Illinois Chapter of the National Fire Sprinkler Contractors Association
Illinois Horsemen's Benevolent Protective Association, Inc.
Illinois Hotel and Lodging Association
Illinois Quarter Horse Association
Illinois Thoroughbred Breeders and Owners Foundation
Ironworkers Local #498
Laborers Local 44
Laborers’ Local #32
Maywood Park Ractrack
Next Rockford
Northern Illinois Building Contractors Association (NIBCA)
Northern Illinois Electrical Contractors Association
Northwestern Illinois Building and Construction Trades Council
Painters District Council
Palatine Chamber of Commerce
Park City City Hall
Quad City Downs Racecourse
RAVE
Rockford Area Arts Council
Rockford Area Convention & Visitors Bureau
Rockford Area Economic Development Council
Rockford Area Hotel Motel Association
Rockford Art Museum
Rockford Chamber of Commerce
Rockford Dance Company
Rockford Metropolitan Agency for Planning
Rockford Park District
Rockford Register Star
Rockford Symphony Orchestra
Rolling Meadows Chamber of Commerce
Service Employees International Union Local 1
Sheet Metal Workers Local #219
Teamsters Joint Council 25
The National Independent Concessionaires Association
The Outdoor Amusement Business Association
United Way of the Rock River Valley
UniteHere! Local 1
UniteHere! Local 450
Village of Machesney Park
Village of Pecatonica
Village of Rockton
Village of Roscoe
Village of Stickney
Village of Winnebago
WIFR
Winnebago County
Winnebago County Fair Association
Winnebago County Soil & Water Conservation District
WREX
WTVO

 
Minnesota to return federal share of health care plan payment PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Wednesday, 25 April 2012 12:59

Sen. Chuck Grassley has been investigating the state of Minnesota’s receipt of a $30 million payment from a Medicaid contractor, a health care plan called UCare.  State officials repeatedly characterized the payment as a “donation” and according to internal emails, took pains to avoid repaying any of the $30 million to the federal taxpayers.  Since Medicaid is a state-federal program, any refund must be divided between the state and federal governments.  Today, state officials notified the Centers for Medicare and Medicaid Services (CMS) that the state of Minnesota has agreed to return the federal government’s share of the $30 million payment.  A U.S. House hearing on Wednesday will explore the situation, and Grassley is scheduled to testify.  Grassley made the following comment on today’s development.

“Key state officials portrayed the UCare payment as a bona fide donation unrelated to Medicaid payments and schemed to keep 100 percent of the money.  These officials failed to disclose to my office all correspondence with CMS, including CMS’ concern about the donation characterization in a July 2011 letter.  State officials have suggested that CMS knew about the payment and did nothing.  Now, the state officials are giving back the federal share of the $30 million payment, even though they continue to say the payment was a donation.  If the payment was a donation, why return the money?  This isn’t the end of my investigation.  Minnesota needs to answer for its actions on the UCare payment.  And the state clearly has structural problems with its Medicaid payments that need examination.  If a state is gaming the federal government to get more out of Medicaid, the state is gaming taxpayers nationwide and ultimately hurting the people who need Medicaid.  Congress needs to make sure this situation isn’t duplicated elsewhere.”


 
Grassley, Thune Seek Answers on Federal Loan to Luxury Car Maker PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Wednesday, 25 April 2012 12:37

Monday, April 23, 2012

WASHINGTON – Sen. Chuck Grassley and Sen. John Thune are asking the Energy Department to explain the selection of a luxury automaker – now described as “troubled” -- for a $529 million federal loan for advanced technology vehicles manufacturing.  The federal government made part of the loan to the Fisker Automotive Corporation, then froze the remaining portion, raising questions about whether the company was vetted properly in the first place.

“The government is responsible for minimizing risk to taxpayers,” Grassley said.  “It’s important to know what went into the Energy Department’s decision to fund the production of expensive luxury vehicles.   The riskiness of loans to companies that may or may not be able to pay them back deserves scrutiny.  The taxpayers can’t and shouldn’t have to subsidize these decisions.”

“There seems to be a troubling pattern developing at the Department of Energy when it comes to providing taxpayer-backed government loans to private companies,” Thune said. “Taxpayers have a right to know why their hard-earned money was used in part to back the production of luxury automobiles overseas, especially in a manner that might not have undergone proper review. I hope Secretary Chu will provide Congress with answers about why this loan was granted and to ensure that taxpayer dollars are not at risk.”

The Energy Independence and Security Act of 2007 required the creation of a direct loan program from the federal government to car companies through the Advanced Technology Vehicles Manufacturing Incentive program.   Fisker’s two planned vehicles would sell for more than $100,000 and about $50,000.  The high retail prices seem to indicate the vehicles would be out of reach for most Americans, thereby seeming like a questionable choice of investment for a federal program.  Also, the senators questioned whether the company’s vehicle production in Finland diminishes the goal of developing advanced vehicle technology to create jobs in the United States.

The text of the Grassley-Thune letter to Energy Secretary Stephen Chu is available here.

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Governor Quinn Proposes Bold Plan to Stabilize the Public Pension System PDF Print E-mail
News Releases - Business & Economy
Written by Leslie Wertheimer   
Friday, 20 April 2012 15:26

Plan Eliminates Unfunded Liability by 2042;

Changes Will Save Taxpayers Billions

 

CHICAGO – April 20, 2012. Governor Pat Quinn today announced a bold plan that secures public workers’ retirement while fixing the state’s pension problem that has been created over decades of fiscal mismanagement. The proposal is expected to save taxpayers $65 to $85 billion based on current actuarial assumptions. The changes will lead to greater certainty in Illinois’ business climate, respond to concerns from ratings’ agencies regarding the state’s unfunded pension liability and support the continuation of the state’s capital plan that is putting hundreds of thousands of Illinois residents back to work. The Governor’s proposal follows weeks of discussion by the Governor’s pension working group.

 

“Unsustainable pension costs are squeezing core programs in education, public safety and human services, in addition to limiting our ability to pay our bills,” Governor Quinn said. “This plan rescues our pension system and allows public employees who have faithfully contributed to the system to continue to receive pension benefits. I urge the General Assembly to move forward with this plan, which will bring a new era of fiscal responsibility and stability to Illinois.”

 

Illinois’ pension system is now under-funded by $83 billion due to decades of inadequate funding by past lawmakers and governors, and the promise of increased benefits without sufficient revenue to pay for those benefits.   Under Governor Quinn, as annual required contributions increased dramatically, the state paid exactly what the law required into the pension systems. The fiscal year 2013 payment, $5.2 billion, now makes up 15% of general revenue fund spending compared to 6% a few years ago.

 

The Governor’s proposal provides for 100% funding for pension systems by 2042 and makes the following changes to the current plan:

 

·         3% increase in employee contributions

·         Reduce COLA (cost of living adjustment) to lesser of 3% or ½ of CPI, simple interest

·         Delay COLA to earlier of age 67 or 5 years after retirement

·         Increase retirement age to 67 (to be phased in over several years)

·         Establish 30-year closed ARC (actuarially required contribution) funding schedule

·         Public sector pensions limited to public sector employment

 

In consideration for the changes above, employee pay increases will continue to be counted in the calculation of their pension and employees will receive a subsidy for their health care in retirement. The state can no longer provide current levels of both pensions and retiree healthcare to employees upon retirement.  Currently 90% of retired state employees pay nothing for their healthcare costs.  States comparable to Illinois in size and demographics provide little to no assistance for retiree healthcare costs.

The Governor’s plan also calls for phasing-in the responsibility for paying normal costs of pensions to each employer, including school districts, community colleges and public universities.

 

This plan reflects the discussions of the working group.  The working group continues to work in an effort to find full consensus on all elements of the proposal. Members of the pension working group include Sen. Mike Noland, Sen. Bill Brady, Rep. Elaine Nekritz and Rep. Darlene Senger.

 

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