The Trend Toward US Businesses Offering $1 Products Accelerates

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It has begun to dawn on more and more large companies that high-priced goods are costing them sales during the recession. Maybe the only way for them to hold onto customers is to offer some products at remarkably low prices, prices as low as $1.

The benefit of $1 items is that it keeps consumers coming back to brands which they have bought for decades but may no longer be able to afford. It also keep sales coming, even if those sales are very modest.

The $1 meal from McDonald’s (MCD) has been part of the company’s marketing for some time. Starbuck’s (SBUX) now offers instant coffee for about $1. Wal-Mart (WMT) announced during its last earnings call that it would have entire aisles in its stores with nothing but products priced at or under $1.

A recent report from USA Today shows that the $1 price concept has moved to the marketing programs of more and more companies.  Kraft  (KFT)is offering cheese products that allow customers to make $1 cheeseburgers. Campbell’s (CPB) is testing $1 condensed soup.

If things get worse in the car industry, the price of a new vehicle could drop to $1, or, at the very least GM (GM) and Chrysler could offer autos for a $1 down payment.

Douglas A. McIntyre