A reminder this week of the dangers of selling products that are income sensitive: champagne producers are seeing their sales drop as consumers start to tighten the belts and reduce spending on non-necessities. Four of the five largest producers have reported drops in sales compared to 2007, with one down 30%.
Presumably folks have switched to substitutes that meet some of their celebratory/ commiseratory needs at a lower price. I wonder if it’s beer or chocolates? Either way, firms like Rémy can build in very few switching costs to prevent such consumer behaviour. Wonder if it will be time for more consolidation in this industry…
What other products are experiencing such drops in sales?
