PERSPECTIVES

After months of doom-and-gloom headlines and hand-wringing about a recession in 2023, headlines last week (quietly) said this: "What Recession? Some Economists See Chances of a Growth Rebound." One economist, in fact, seemed a little chagrined to note "So far, the U.S. economy has proved unexpectedly resilient." *

• While economists, famed for not agreeing, still find other causes of concern and worry, this may mean that topics other than the economy can take over the "bad news makes news" coverage.
• And that, in turn, could buoy consumer confidence, and retail sales. 

Retailers must be mindful of all this as they make their business and buying decisions throughout the year. But the macro economy is simply interesting, but not significant. Your local economy is, of course, what really matters. 

In that context, every savvy owner uses these three steps.

Just One Week Until Valentine's Day!

• No special discount coupon.
• No "bounce back" offers ("come back by such-and-such-a-date to save $$$.")
• No "sign up for our Insider's Club."
• No "We want to know what you think about your most recent visit."
• No expectation of them doing anything more for you!
• No obligation.

There is much enthusiasm coming out of the buying trade shows, and why not? 

Attendance levels have been near to or better than 2019. Energy levels are high, and very contagious. A sense of urgency persists, due to past supply chain issues, emboldening the pressures from the vendors to "Buy now!" 

Especially in today's environment, FOMO - the Fear Of Missing Out – can be a compelling sales pitch.

How to deal with this pressure, especially given all the headlines about a coming recession, or drops in consumer spending, or cautions about the need to control expenses, improve profits, maintain cash?

Here are two tactics to help you manage this. One helps monitor and control "How much to buy?" The other helps decide "What to buy?"

Try as we might, it seems that there will be no avoiding a recession in 2023. How deep it is, and how prolonged, still remains to be seen. 

For retailers, it's not a matter of whether your business will be impacted, just how much. Alas, retail does not lend itself to being recession proof.

However, there are ways to make your business more recession resistant.

The place to start? First, find out what your Debt-to-Worth ratio is right now. That is the #1 measure of the financial strength of your business. It's a key indicator of your ability to weather an economic downturn. 

Managing inventory – arguably the #1 responsibility of a retailer – has been beset by a host of new and sometimes daunting challenges since 2020.

The last few months of 2022 only made matters worse. As supply chain issues seemed to subside, foreboding talk of a recession dominated, dampening customer spending. 

Many retailers are feeling a bit over-inventoried as a result. Similar to that sense of having a few added pounds after the holidays.

In other words, a situation that is crying out for perspective. And The ROI has you covered on that!

It Always Helps to Know "WHY?"

This is the time of year when most retailers are scheduled to take their annual physical inventory count. 

Along with that comes the interruption of daily lives, very serious attitudes of bookkeepers and accountants, and, of course, extra expenses. Oh yes, those!

Typically, preparing for and taking the item-by-item count involves a lot of emphasis on "Make sure to count everything. We don't want to miss anything!"  This often-loud focus is true whether the counting is done manually, by scanning, or any other means. "We must count it all!" 

Okay, but why? Why is it so darn important to count every last fish hook or candy bar or tube of lipstick?! 

It helps to know why.

The savvy retailers know that now is the time to be putting the finishing touches on – wait for it – being ready for December 26!

Yes, this unique time period between December 26 and New Year's Day is a tremendous make-or-break opportunity. Indeed, many retailers find they net more from this time than any earlier stretch of 6-10 days!

Why? Three main reasons.

First, the many opportunities to reduce expenses "back to normal". Less advertising cost. Less staff. Fewer hours.

There's a very important annual job for you, the owner, and all of your senior staff. It's vital, and it involves your presence.

The pressures are mounting on your stores, and in particular, your front line staff. 

• Noticed all the "help wanted" signs in stores, coffee shops, restaurants? It's not just you; lots of (other) businesses are having a tough time with finding and keeping good help. 
  
  In fact, a nearby McDonald's posted a notice on its front door acknowledging that they were understaffed due to no-shows, and encouraging (imploring?) customers to be considerate to the people behind the counter who are there to serve them.
   
•  Meanwhile, the deadlines for online orders to arrive before Christmas are fast approaching. This will lead to a surge in in-store shoppers. And more demands on your front-line staff.