PERSPECTIVES

In the free enterprise system, owners are free to succeed. And free to fail. 

That's why The Retail Owners Institute has defined the #1 responsibility of the Owner as the survival of the business. 

But then, the owner must define "Why?" Why are we doing this, anyway? Why are we working so hard for this business to survive and thrive?

• There are many good answers. To be the biggest? The fastest growing? A way of life? Something to pass on to the next generation? To create wealth? To support a cause? 
   
• It all depends on the owner, and what she or he decides. Then, that answer must be communicated: to staff, customers, family, the community, competitors, everyone.  

That brings us to an event that captured a great deal of attention in the business world last week. 

It's back-to-school season! 

We were struck by these comments from folks for whom "back-to-school" is more than a season. Look what a state superintendent of public instruction* had to say about the upcoming school year. 

• "The sheer burnout of the last two years caught up with everybody."
   
•  "But out of that came a genuine assessment of what matters most."

Lots of retailers can identify with those comments, don't you agree?

Or, these observations about the disruptions and uncertainties of the pandemic:

As the final third of the year approaches, there's a "new era" afoot. There is optimism in the air. 

Optimism? Really? 

Yes! And it could catch a lot of folks by surprise. 
 

Consider these "early warning signs" of approaching good news:

• Those surveys of "consumer attitudes" indicate that folks do reflect the news headlines regarding the economy – that is, respondents are pessimistic about "the economy." But when asked about their own financial situation, the responses were very positive; people feel good about their personal financial situation.

You've no doubt seen the headlines and the commentary:

• "Retailers Stumble Adjusting to More Selective Shoppers" *
   
• "Consumers Uneven Spending Fuels Caution Among Retailers" **

Consumer spending is up, but not on what was expected, especially those publicly-traded chains that must report quarterly. 

• "As people watched the prices of food and gas rise, their spending became more selective, leaving retailers with shelves of inventory they couldn’t get rid of." * 
   
• "Although some consumers are cutting spending on goods, it is being accompanied by increased spending on services," according to Mark Zandi, chief economist of Moody's Analytics. **

It doesn't make any difference if you're selling tires, turbans or tuxedoes. 

Poor prior planning produces pitifully poor profits. 
(You can take that to the bank!)

We came across an article on this checklist theme for the rapidly approaching fall/Holiday season. 

Artful Idea for Retention Bonus

One of the real killers of a retail business can be debt. But, how much is too much?

Debt can be quite stealthy as it grows. 

• Seemingly small expense increases add up in the aggregate – maintenance costs, security, advertising, utilities, payroll, e-commerce charges, etc. 
• Vendors may be eager to offer terms, but that too is more debt. Whether or not you pay interest on it, you still are obligated to pay. And vendors would rather have an accounts receivable from you – it's an asset for them – and a debt for you.

Especially in these times of increasing interest rates, creeping expansion of debt can quickly snowball into a much larger problem.

From the Benchmark pages on The ROI site, we have selected four retail verticals whose Debt-to-Worth ratio shows a frightening situation. The technical term we would use is "spooky, real spooky."

(click on each chart to see all key ratios for that vertical)

Embracing Uncertainty: The Essence of Retailing