This wasn’t totally unexpected, but retail sales in January plunged by double digits for many retailers according to an article in the New York Times this morning.
The saving grace, Wal-Mart, who posted a 2.1% increase.
Department stores suffered the worst with Neiman Marcus and Saks down over 20% vs. prior year. Even low priced department stores like J.C. Penney and Kohl’s had sales declines in the double digits.
Even specialty retailers like the Gap, American Eagle Outfitters Pacific Sunwear and many others registered decreases in the double digits.
In another bit of news, the savings rate rose to 3.6%, up from 2.8% in December, providing some direction as to what consumers are doing with their money (if they still have a job).
THE REAL WORLD RETAILING TAKEAWAY
Don’t take anything for granted.
Have you send the jobless rate? Nearly 600,000 jobs lost in January alone, increasing the nation’s unemployment rate to 7.6%.
I’m saddened to see shuttered storefronts as I drive down any number of streets, with institutions closed after being in business for 50 years.
You can’t take anything for granted today or in the future. If you need lay employees off, cut now and cut deep. Don’t stair step your way into this, cutting a bit here and a bit more next month – that will only breed distrust and crumple any existing morale left in the company.
This is the toughest choice anyone has to make – to take care of the troops, who have taken care of you by being loyal employees – or to save yourself. I don’t envy anyone in this position.
But it’s you, and your livelihood as a small business owner that’s at stake. And now’s the time to choose between being a good guy or girl, and being a business owner.
It’s business and unfortunately, it’s reality. How are you deciding which way to go in making this tough decision?