Some Companies Thrive Despite Recession

USA TODAY:

While many businesses struggle during the recession, a handful of U.S. and global companies – from health care giant Abbott Laboratories to retail king Wal-Mart – are riding out the financial storm in good shape.

McDonald’s CEO Jim Skinner says the hamburger giant is “recession-resistant.” Hermann Waldemer, chief financial officer at Philip Morris International, calls the tobacco industry “very recession-resilient.” Carter Keithley, president of the Toy Industry Association, also says toy products are “recession-resistant.”

There’s no such creature as a “recession-proof” company or sector. But some businesses appear to be recession-hardy, warding off the downturn with strong balance sheets, long-range planning and rising global sales of products and services that people want – even in scary economic times.

Cash-short consumers may hold off buying big-ticket retail items. But they still need food, clothes and medicine. And they can’t seem to do without guilty pleasures such as alcohol, cigarettes and fancy foods including gourmet chocolate – the so-called sin stocks.

Research firm Mintel International predicts that the U.S. cigarette-and-tobacco market will grow 28% to $132 billion from this year to 2011.

“Even though we’re hurting for money, we want to make our lives a little better with indulgences,” says Marcia Mogelonsky, a Mintel senior analyst.

Keithley of the Toy Industry Association, which represents 500 toy manufacturers in the USA and abroad, says the industry has proved to be “recession-resistant” through the years.

Why? Because downturn or not, consumers will buy $19.95 toys to make their kids happy. What’s more, Keithley says, toymakers are nimble manufacturers, adapting quickly to economic cycles and bringing new products to stores.

Photo by KidStrong.

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