The March retail sales report is out it’s about as sluggish as the 95 degree weather here in LA last weekend. While the retail sector posted a scant .2% gain, it was mainly due to the rise in gas prices. However, the growth is on top of a .4% loss in February.
The report states that, "Sales at department stores and general merchandise stores such as Wal-Mart fell by 0.6 percent in March while sales at specialty clothing stores were down 0.5 percent. Demand at these stores had been hurt by the fact that Easter came extremely early this year at a time when much of the country was still blanketed by frigid weather that chilled people’s inclination to go shopping for spring clothes.
Sales were also down at furniture stores, building supply stores and appliance stores, all areas where demand has been hurt by the bursting of the housing bubble. In addition to the 1.1 percent increase in sales at gasoline service stations, sales were up 0.3 percent at grocery stores, a gain that probably reflected continued big rises in food costs."
THE REAL WORLD RETAILING TAKEAWAY
The jury is still out on whether tax rebates will stimulate the economy.
I’ve read too many articles and blogs on the subject over the past few days which stated everything from families will spend the rebate on summer vacations to two-thirds of Americans say they will pay down credit card debt or save the money.
Now is not the time to pull out your crystal ball and play psychic.
I was shopping last weekend and was talking with a woman at a store who happened to own 12 locations. She fully expects her business to be down 5-6% on average across the company. Not horrible. But do the math and you’ll see that 5% of $12,000,000 in sales is $600,000 in gross profits. That stings a little more.
My advice: Keep doing what you’re doing. Don’t clamp down so tight that you choke the business. Trim expenses where you can. Market yourself judiciously and add value to your experience without giving 40% off everything.
Smart business owners know that you always have to keep the motor running on your boat when you’re in rough seas. And you have to know which way to turn the rudder. Turn the motor off and your rudder becomes useless. And you eventually sink.
Power on and power through!