The meager growth beat analysts expectations and also was a welcome increase compared with January’s .2% and the Holiday’s .4% growth. Investors expect similar sales growth of 2% in March.
If you read through the various retailers listed and their results, it’s impossible to find any trends. For instance, in the discount category, Wal-Mart’s same store sales growth was up 2.6%, Target’s growth was up only .5%.
Apparel and department stores were the biggest losers. Still, 61% of retailers reported same store sales gains vs. prior year.
And the stock market’s surge yesterday and this morning based on the Fed’s move gives consumers a little confidence that we haven’t, and hopefully won’t hit rock bottom.
THE REAL WORLD RETAILING TAKEAWAY
It’s a crapshoot out there. So what do you do?
Hang on to your hat. Growth of 2% isn’t horrible. And if you’re achieving that growth or better, then you’re doing okay. The issue with an economic downturn is that everyone is impacted. To what degree your store is impacted will determine what you need to do to push sales.
In the past few weeks I’ve spoken with everyone from big box retailers who can’t pull out of the slump and are suffering double digit negative growth, to specialty retailers who are down only a couple points to start-up concepts that are showing double digit growth.
Here are a few things to ponder:
- Do offer some deals to drive traffic if you need to. Don’t promotionally price yourself into a zero gross margin, negative cash situation. That’s only for desperate retailers who are going out of business (or want to go out of business).
- Do continue to market your store to your core consumer. Don’t enter a customer acquisition mode and throw dollars against marketing initiatives that don’t make sense.
- Do clamp down on expenses including payroll whenever possible. Don’t cut back on payroll so much that you impact the store experience.
- Do trim inventory to reflect the slower turn of products. Don’t run out of key products.
Only you can evaluate your individual store experience and determine how the economy is impacting it. Analyze your history, your trends and your projections, then make sound, rational decisions. If you do that, you’ll continue to operate as efficiently as possible in a difficult economic climate.