European Stars And Stripes (Newspaper) - September 20, 1986, Darmstadt, Hesse                                The stars and stripes saturday september 20,1988 Lus mess news cafes offers better deals this year a new image everyday Low prices by Charlie Bowden Munich Bureau Munich cafes Europe is eying q rebound from an off year at the Cash Register and build n new image in its customers minds. The Exchange system is Oft ring fewer sales but better deals Liis year said Joel Sontag who Heads the now marketing directorate for cafes ii rape. There has been a noticeable de crease in the number and Type of Sale hems but he Sale program has not been eliminated he said. The decrease is part of an a i tempi o create a different image of cafes Siores Sontag said. We want to show our customers Tinl we have everyday Low prices hat if they come into their local Exchange they la find the Best  he said. Reduced prices or Mark Downs Are a Staple or the daily opera Tion of any major retail business son tag said. I think Well always need special Sand reduced prices to Clear our season Al merchandise items that we re heavy in Stock with or items that did not move As Well As we thought the would he said. Last year however cafes exceed edits allocated markdowns for the year by about s15 million As the Exchange service fought the in this of a Strong Dollar sales were poor last year. Custom ers were going onto the Economy to shop and using their Money for larger purchases such As furniture or new cars Sontag said. We offered More specials to get people into the stores and to reduce our pipeline inventory of seasonal Mer Chandise that was t moving. We were quite concerned and had to take some drastic  that action however had Little effect on he Overall sales picture he said. The specials were not bringing enough customers Inlo the stores despite the fan that we were offering More Price Breaks in our advertising he said the people who did come in bought the re Ducco Price Iiams but apparently thai was about All hey bought.1 Sontag feels the abundance of specials last year May have had a negative effect. Because of the numbers and amounts of the Price cuts he said customers began to question the Exchange s pricing policy. He believes a general reaction among customers has been if you have 30 percent or so percent Olf on an item then what is your everyday Low Price this is what we re trying to re verse he said. Shoppers today have come to a Point where they believe that if an item in t on Vale then it s not the Best Price he said. Business sin he states now realize this and Many Are changing strategy pushing everyday Low prices instead of or in conjunction with reduced prices on some items. They want their future customer base to know that they can go to that particular store and get a fair Price on an item at anytime Sontag said that s what we want to build on. We want cafes customers to know that if they walk into their Exchange they can fed confident that they u have the Best Price regardless of whether it s on Sale or not this year As the Dollar plunged in value against foreign currencies cafes has found customers returning to the exchanges. Those customers however have found some prices rising 30 percent or More As the Dollar weak ened. This is particularly True of elec tronic gear and cameras. To offset that Sontag said Exchange service buyers Are dipping into new markets and pushing Vendor participation in sales. Another approach that ii being expanded is the cafes band program which includes anything from tissues to aspirin to baby  special buys also Are in creasing especially in electronics and clothing. Because of the weak Dollar cafes Europe buyers arc looking toothed markets for better prices under what is known As the Pacific buy plan Sontag said. Customers apparently like inc idea especially the extra value items in children s clothing he said. A similar Lack is being taken with electronics items. Cafes Europe also is looking to in crease the consumer s voice in Exchange decisions. The new marketing directorate includes a research divisional cafes Headquarters in Dallas. Ill Mission Sontag said will be to find out who our customers Are and what it is they  customer surveys will be conducted More frequently and will include Mili tary communities overseas. Dollar s fall bringing customers Back to cafes Munich customers who last year deserted their Exchange for downtown stores when the dolt Arwas Strong have returned causing a dramatic Turna round in cafes Europe retail sales the cafes Europe commander said. Sales were relatively Flat last year primarily be cause customers were slow in realizing that their Dol Lars bought less As the Dollar began to slide said Brig. Gen. . Lecky. Closely following the reports of american express sales of foreign currency gives Exchange service officials an idea of where customers Are spending their Money he said. The breaking Point is 2.50 Marks to the Dollar he said. Exchange officials have found that figure is a kind of a psychological . When Hie Dollar goes above that rate customers tend to head for the Economy when it Falls below it they return to the exchanges. This proved True last year when sales picked up in december and january the last two months of the business year Ashe Dollar Slid below the 2.50 Exchange rate. That momentum has continued through the first nine months of this year Leedy said with ales figure about 15 percent above Las year s results and this year s projections. At the same time he said cafes Europe has kept business expenses Onan even keel. The most significant Factor this year from a business standpoint is that we be held the Fine on business expenses which will result in increased earnings Lccy said. One method has been to spend dollars instead of foreign currencies whenever possible he said. Al the same time that the Dollar was falling prices on some items were climbing particularly electronic items from Japan. In an Effort to offer More reasonably priced electronic items he said cafes Europe buyers Are developing other markets in the far East primarily South Korea. The buyers also arc expanding into areas such passports merchandise and clothing be said. Asked to pick i Milestone from 185, Leedy chose two the year of customer service and the increase interaction with army and air Force Noraye support agencies in Europe. Leedy described the year of customer service As an umbrella for a series of program developed Over the year. He said it was More than just another Public relations tool it s designed to focus attention in Bolh the exchanges and inc customer s mind that it s the customers store and we want to offer them a better value a better variety and a Betler presentation of goods he said. Results stemming from the program include expand ing the line of sports merchandise of Cring european fashions accepting commercial credit cards and rejuvenating the food service program he said improved relations with morale support agencies was a significant achievement during 1985, Lccy said. We have a Mission in the Community and he have a Mission he said and they dont overlap and both Are equal in importance. We re no longer  the possibility of Competition was most Likely in military communities that had audio photo clubs Rugby Rhc local morale support office. There Are very few examples in Europe Tod a where cafes and mar morale welfare and recreation Are m had to head Competition he said. Charlie Bowden Strong Buck helped Zap exchanges in 85 Munich difficult and disappointing that Best describes the re sults of last year s retail sales in cafes according to the recently re leased annual report. The worldwide Exchange service had Only a slight increase in sales for the business year that ended Jan. 24, and experienced a dramatic dip in net earn Ings and in dividends. Tola annual sales for 1985 were $4.9 billion about i percent above sales for 1984, the re port slated. However that figure which includes 1433 million in conces Sion sales is about 5 percent below cafes projections for the year. Net earnings fell to $171 million the lowest since 1979 and about 28 percent below 1984. Cafes dividends turned Over to the army and air Force Central welfare funds also suffered declining about 26 percent to $87 million the Low est amount declared since 1979. In 1984, cafes declared dividends of $118 Mil lion. Both figures reflect what the cafes report Calls a generally soft trend in sales in the retail Industry last year. Com petition from other retailers was stronger primarily because of a combination of Strong Dollar and aggressive expansion by Large retail chains the report slated cafes and other retailer responded to Market conditions with an in crease in sales and heavy Muk Dowie. As a result the report said customers last year became Sale  in cafes Europe sales totalled $1.2 billion about the same As 1984, but 8 percent below what was projected for the year. Net earnings dropped to $76 Mil lion the lowest in five years. After expenses and allocations to cafes earn Ings were $54 million about 31 percent of Exchange earnings the report said. Personnel costs however increased 9 percent for cafes Europe and 8 per cent for cafes Overall the report said. This increase Wal primarily because of higher wage Scoti and a increase in the number of employees shopping by mail decreased Las year with Catalon orders of $58 Mil lion 7 percent drop from the 1984level. Operating Cost for he cafes Catalon service were $10.8 million in1985, also Down 7 percent. Net earn Ings from Catalon sales were $ 1 million1 percent of worldwide cafes earn Ings tie report raid. Cafes customer continued their trend of spending their dollars for Home entertainment items according to a separate report that included a list ing of sales by department. Exchange customers spent $476 million in 1985 on Home entertainment equipment including computers. That figure was 12 percent of total cafes sales for the year the highest single sales category. Overseas customers accounted for inc majority or that amount buying $316 million Worth of equipment or about 22 percent of Tola sales in overseas exchanges. Nearly half of the Catalon or Ders were for Home entertainment pare outerwear and  accounted for $226 million in sales Coni pared toll 93 million for women. Cafes operates about 15,600 activities ranging from Heaters to Caj. Lions and garages to shopping Centen. In overseas areas the Exchange service also has an ice Cream Plant a Dairy bakeries and a my processing plan