In a Wall Street Journal article yesterday, the Commerce Department reported a weak .2% sales gain in October on to of .7% in September. Strip out autos, gasoline and building materials and that takes that number down to .1% growth – or no growth at all.
Because consumer spending accounts for two-thirds of U.S. economic output, this slowdown will ripple through the country, impacting GDP.
According to the article, furniture was down .9% due to the soft housing market and department store, sporting-goods, hobby, book and music store sales were all off last month.
THE REAL WORLD RETAILING TAKEAWAY
Keep a tight eye on the business over the next few months and get proactive and reactive.
Major chains such as Wal-mart and Target are already turning on the holiday business by offering major discounts to drive store traffic – A sign that they’re worried about meeting their sales forecasts.
If your sales are off one week, then create an offer such as a discount, free sample, anything to get people in the door. Don’t wait until it’s too late.
Small retailers too often wait until it’s too late to impact sales. You have to really keep your head in the game and the numbers on a daily basis. While one day does not a trend make, 5 days of negative comp sales (sales compared to last year) is worrisome.
So market yourself, drive traffic, watch expenses and cut inventory whenever you can if you find that you’re sales aren’t what you predicted they would be.