From The Co-Founders


Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

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Hats Off to 2021! But Caution Advised for 2022

You've gotten through the Holiday season, likely enjoyed some vacation time, and perhaps even have your own financial statements in hand. 

For many retailers, 2021 proved to be a very profitable year. Congratulations!

In fact, go here to check out the pre-tax profit trends for the past two years for the median performers in 50+ retail segments. To borrow a phrase,  everybody (almost) is above average!

It's no surprise, is it? The circumstances of the pandemic conspired to force expense reductions, reduced inventories, higher turns, better margins – all of which contributed to profit growth. 

How do we know this? By checking out all six of the Benchmark trends for those retail segments. Many retailers are in better financial shape than they have been in years! 

Ahh, but now it's 2022. What do you think is in store for you this year?

We can think of some ominous signs. 

  • The tentacles of inflation will reach into many parts your operation, from higher prices from your suppliers to wage increases. 
  • Then there are "the creepers": those costs that increase just a little at a time, but very consistently: utilities; telephones; insurance; internet; mailing and shipping; etc, etc.
  • Rent increases also are likely – vacancies notwithstanding – as landlords must work their own way out of the pandemic. 
  • Suppliers are eager to "help" retailers "sell your way to success" by offering generous terms and/or tempting special deals on merchandise buys.
  • At the same time, "alternative lenders" from online marketplaces to POS providers are offering what are essentially cash advances to retailers to enable more purchasing. Beware the impacts on your cash flow.
  • And then, there are the shoppers. They may be ready and willing to spend, but will it be in the same way? Doubtful. Between the rise of merchandise re-use and the insistence on "purpose-driven retail," customers are able to be choosier than ever before. 

But look. Be that as it may, you must develop your profit plan for this year. 

The ROI's PROFITS Forecaster can help you make that happen. If it looks like you won't have a profit, best to find out right now! (You still have time to make adjustments.)

ROI Members have unlimited access. It's only $29.95 a month – that is, nearly FREE – and you can do it yourself. Get cracking!

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