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Tuesday, March 10, 2009

Reader mail: recession thoughts and expensive food

Linda writes:

First, bought any Girl Scout cookies lately? The price is still $4 but the number of cookies is reduced by 25%.

I think you are extraordinarily kind in your column. The top level suits at Disney are thieves just like their counterparts at other major corporations. The siphoning off of profits (we used to call it skimming and people went to jail for it) is as prevalent at Disney as at AIG or General Motors. A top story on MSN today states CEOs take about 10% of profits for themselves. Iger is in that bunch. You are right – the money saved goes directly into executives’ pockets. The shareholder doesn’t see a dime. Disney is a lousy investment and has been since Frank Wells died. The claim that cost control improves the stock price is absurd. Disney stock hasn’t been above $40 per share in years.

If WDW offered a product people felt they could not live without, they might forego other things before giving up a trip to WDW. However, as the product and service have declined plus become more expensive, I’m sure families make decisions similar to ours – we don’t need to go every year or even every other year. Our vacation must be worth every dime we spend on it. After our last trip to WDW we decided that, although we had a good time, there was a noticeable change from our previous trip. It wasn’t quite the same. The cast members remained wonderful beyond description but we noticed there were not enough of them. We had maintenance and cleanliness issues – the result of not having enough employees to do the work?

With prices continuing to rise, is WDW worth the added cost we see every year? We don’t think so. We will wait several years before returning. In fact, considering all that is happening at Disneyland, our dollars might be better spent there. The travel expense for us is about the same. Maybe the WDW suits should give that some thought.


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Mindy, meanwhile, has a very different take:

I'm never disappointed at Disney. I have been there 10 times and can honestly say I have never been disappointed. I understand that things have to change to go along with the times, to survive and be healthy. I have worked in retail for many many years and have seen stores come and go. New York City alone has seen many fabulous stores go because they couldn't keep up with the times financially. The surviving stores are the ones that trim the fat from time to time to stay alive. One store comes to mind is Bergdorf Goodman. It's been around for nearly a century. B Altman's went out of business, Bonwit Teller went out of business both were really wonderful luxury stores but Bergdorf's has survived. It's still a luxury store, yes they have had to trim the fat many times over the decades like staffing and perks and certain services but it's still around and still doing a magnificent job. To me Disney is the Bergdorf Goodman of theme parks. I would rather Disney trim the fat and still be around than not trim the fat and become a wonderful memory.

All that you say is true they have been cutting things here and there way before the economy went bad and yes you are probably right about the big executive's bonuses but they are getting rid of a lot of executives. Don't you think that is a change for the better? They have already trimmed as much as they can in the parks now they are letting those executives go. I think that is a step in the right direction, don't you?

I don't think Disney trimming the fat all these years is such a bad thing. They haven't trimmed it in a way that is truely noticeable. It's still basically the same experience and it's not like they haven't improved on other things. Maybe the executives knew the economy was going to tank long before it did (that's me giving them the benefit of the doubt). When I worked at Bergdorf Goodman the CEO knew the economy was going to be bad long before it happened and warned us of it and told us to start trimming the fat. No one believed it at the time because sales were up and you know what, he was right.

Now I own my own business so I do understand why they do what they have to do to make money. To me it's in the realm of reasonable and maybe I'm one of the few people that is not complaining but hey I'd rather still be able to go to the place than not have a place to visit anymore.