The Economy’s Impact on Retail
Events over the last two decades have led to an unbridled confidence in the U.S. market’s ability to self-regulate, which stabilizes the economy and generates future growth. The fact that the world’s economy was heavily dependant on the economic health of the United States made it all more important to get things right here on the homefront.
But things haven’t been going right here during the last 12 months, and the slowing U.S. economy has done little to calm the frayed nerves of CE manufacturers and retailers. The right strategic planning and a sharp focus on core competencies, however, will help retailers weather the storm, as the best of them have done for decades.
First, some perspective. Consumer confidence and spending began to fall after the 2007 holiday season, continuing with what analysts believed would be a moderate downturn through 2008. Just a month ago, analysts thought the government’s economic stimulus package would boost consumer confidence and spending, leading to economic recovery. Optimists were also predicting that consumers would spend a good chunk of the package’s $600 “rebates” on electronics. It turns out that most consumers will be spending the majority of that rebate to pay off existing debt or on core needs such as food and transportation.