I am speechless (and that doesn’t happen very often).
Speechless at the number of retails spaces for lease; at the number of retail locations that are on sale — at 30%, 40%, 50%, 60% off; at the number of catalogs I’m receiving that are offering “Everything at 20%, 25% off.”
If you doubted the severity of the economic issues, doubt no more.
Even my tried and true retailers where I shop often are literally pushing merchandise on me, offering me bigger discounts if I buy more expensive items (like at suit).
Time magazine ran an article about online shopping, stating that retailers hope online shopping will be the savior this holiday season as customers search for better and better deals. Even online sites aren’t hedging their bets, with 8 out of 10 offering free shipping.
The NRF is still sticking to their 2.2% growth number, even as CNN runs a story about pessimism, about how 84% of Americans believe the country is headed in the wrong direction, the lowest score ever recorded.
THE REAL WORLD RETAILING TAKEAWAY
It smells like desperation to me, and with good reason.
Retailers have nothing else to fall back on besides discounting. They’ve slashed payrolls, they’ve cut inventory, they’ve shuttered stores, with Circuit City being the latest to go into Chapter 11, even after announcing the closing of 20% of its stores.
People have shut their wallets and only an economy that is on the rebound will open those wallets back up. A relaxing of the credit market will certainly help, and the holidays will add a little oomph to retail. But what most people need is confidence. Because without confidence, they’re only buying what they need.
And some analysts don’t see how bad it is.
Take a read of Irwin Kellner’s blog at Marketwatch. He’s telling everyone to go out and shop. Um, no credit and no cash equals no shopping, no matter how good the deal. Take a read of the comments section as his readers agree – you can’t “will” people to shop by the power of the blog.
Time is the only thing that’s going to help struggling retailers through this slump, which is the worst in decades. I’m sure our new president that will act swiftly to let Americans believe that change is indeed happening, thereby boosting confidence. But to what degree that confidence boost happens, well, only time will tell.