The Wall Street Journal recently wrote about retailers heading back to school early.
Summer has barely begun. But for retailers it was dead on arrival. Hence, they’re turning to back-to-school a week earlier than last year, which is now the week of July 4th.
With back-to-school being the biggest spending period next to Christmas, retailers are in a make-or-break situation given the reduction in consumer spending. The WSJ reports that sales from July 4 through Labor Day are expected to be flat to slightly lower this year following an increase of 21% to $65.7BB last year.
Discounters will be the winners as families look to stretch their dollars and focus on necessities like supplies and text books, versus apparel and electronic gadgets like MP3 players and cellphones.
THE REAL WORLD RETAILING TAKEAWAY
Be prepared to take a hit during back-to-school if your merchandise isn’t relevant.
I’m not suggesting you change your merchandise to fit a back-to-school shopper. Rather, you have to be prepared for the fact that as families are squeezed more on gas and food, less people will be trading up to “splurges”. They’ll simply be struggling to afford food, gas, school supplies and clothing for their kids and that means less disposable income for parents to spend on themselves in your non-back-to-school focused store.
So if your business is back-to-school focused, best to head back early and get your merchandise and marketing focused now.
If not, then the same rules apply as always: cut expenses, especially payroll; trim inventory; be prudent about new product launches, etc. And continue to tweak your business every day and every week, proactively managing it for the greatest return in a tough economic climate.