Reuters | Many U.S. consumer goods companies still face a tough operating environment as shaky consumer confidence and lingering high unemployment keep discretionary spending soft.

Companies from big box retailers to nutritional supplement makers presenting at a Janney Capital Markets consumer conference in Boston on Wednesday forecast better times ahead after a brutal 2008 and 2009.

But most are keeping a reign on expansion and looking for ways to boost margins with supply chain improvements, e-commerce and, in some cases, squeezing out costs from acquisitions.

Many workers were jobless for longer than in previous recessions; others
took part-time jobs when they would have preferred full-time
employment, government figures show. The results could have a lasting
impact on their spending patterns.

David Flanery, chief financial
officer with pizza chain Papa John’s International Inc., said
consumers remain somewhat in a funk, even with the economy turning up.

“We’re
in the middle of a jobless recovery, and unemployment is a leading
indicator for the health of restaurant companies,” he said. “Restaurants
are the ultimate discretionary spending category.”

The U.S.
economy, as measured by gross domestic product, has grown for the past
three quarters after shrinking in five of the previous six quarters.

Unemployment
was 9.9 percent in April, not far below its recent peak.

Consumers
remain wary, said Larry Stone, president and chief operating officer at
the home improvement chain Lowe’s Companies Inc.

With
about a year’s worth of housing inventory overhanging the market and
millions of mortgages under water, “I think that’s got the consumer kind
of edgy, and that gives us a little bit of concern,” Stone said.

As
a result, 2010 will likely be a “transition year” of uneven recovery in
selected parts of the economy, with more broad-based improvement likely
in 2011, he added.

Still, Stone said 21 of Lowe’s 23 regions in
the United States had positive year-on-year sales comparisons in the
first quarter, including two with double-digit positives.

“It’s
been a while since we’ve said that. We’ve said double-digit negative a
lot of times,” he said.

At the conference focused on “the new
normal” for consumer firms, Joseph Doody, president of North American
delivery for office supply store Staples Inc., said buyers are
clearly more selective now, whether making purchases for themselves or
for their businesses.

“People are buying the specials, but not
adding as much to their overall baskets,” he said. “And they are clearly
buying a little bit less in some discretionary categories.”

To
counter a tendency for buyers to shop around, Staples has attempted to
boost loyalty by signing up big customers for reward programs featuring
cash back and other incentives.

Sales at chains such as Staples
and rival OfficeMax Inc. are correlated closely with white collar
employment — the millions of workers sitting in office cubicles.

Huge
layoffs during the recession mean that as the recovery moves ahead,
office furniture sales could lag those of other business segments, said
Doody.