–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.

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."

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.

DES MOINES - Progress Iowa issued the following statement today in response to jobs figures released by the Iowa Workforce Development this morning, which showed Iowa losing 1,600 jobs in March 2012:

"Today's report showing the loss of 1,600 jobs proves that Terry Branstad and Iowa House Republicans are nowhere near meeting Branstad's promise of creating 200,000 jobs," said Matt Sinovic, Executive Director of Progress Iowa. "While the rest of the country is putting people back to work, Terry Branstad and House Republicans are making it harder for Iowans to find work."

"The latest job figures show that Iowa is 31,267 jobs behind where it should be to be on pace to meet the jobs promise. Branstad promised to create 200,000 jobs over five years and should have created almost 47,000 jobs already. Terry Branstad and Iowa House Republicans need to stop making the problem worse by decimating workforce services and start investing in Iowa's workers."

"Out-of-work Iowans need the closed workforce centers to reopen so they can receive quality face-to-face job search assistance. Iowa Republican legislators need to stop destroying jobs by proposing budget cuts that slash vital public services. Because of Terry Branstad and Republican legislators' poor leadership, Iowa is not seeing the full benefit of the national economic recovery."

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