According to the calendar, as of March 21, it officially is springtime. No matter what the weather is doing.
Well, it's time to bring the calendar to real life! Spring is really a state of mind! The dark winter has passed. Even the rain is warmer in the spring. And new growth is beginning to sprout; leaves are coming out. It's a wonderful, fresh outlook.
And that of course means it is a wonderful opportunity for retailers to refresh and reenergize their stores.
No matter what merchandise you sell - whether it's tires, apparel, books, housewares, office supplies, whatever - every retailer is in the fashion business.
And that means that your customers are wanting what is new and fresh.You know; "in fashion."
Maybe you noticed this (see "Retailers Lay Out a Downbeat Outlook"*) but the big national retail chains, despite better-than-expected quarterly earnings this week, still are looking at a year of low to no growth, citing reduced spending by lower income groups, the loss of covid relief money, the effects of inflation, etcetera.
But, here is the key observation, and an important reminder:
How to reconcile this doom-and-gloom from the big national retailers with our still-strong economy, which is 70% driven by consumer spending?
It's that time of year. As you review your Profit & Loss statement for 2022, your thoughts most likely are turning to "How do we make 2023 a better year than that?"
As we look around, we see a popular cost-saving and productivity-boosting tactic being instituted by many national retailers, shopping malls, and restaurants. They are open fewer hours.
This offers an opportunity for you to revisit your store hours and employee scheduling practices. Maybe it's time to consider some changes, if you haven't already.
Start with the mass of data resting comfortably in your POS system. Look for all the reports by the day of the week. (Be prepared; this may require you to gather information from several reports.)
What you are looking for is data such as this by the day of the week:
People don't go into retailing to be financiers.
But few are attracted to the financial part.
Which is exactly why The Retail Owners Institute website has been built!
Given our years of experience consulting with retailers, especially in turnaround situations, our speaking at conferences and publishing in trade publications, we wanted to "level the playing field" for retailers.
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." *
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.
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.
Still less than $1 a day! 👀