Many Americans who can afford to save money – thanks to reduced spending on eating out, vacations, and consumer goods – are playing it safe and hoarding their cash, according to recent research by Gallup/Franklin Templeton.* And those who currently are saving at least a little money largely plan to keep saving rather than spending in the near term.
“There’s a lot of uncertainty,” said Grant Buckles, senior research consultant who worked on the study. “For the time being, I think people want to make sure that they have money for necessities.” This dampened discretionary spending is not exactly a news flash for most retailers, is it? However, we think there is an important aspect not be overlooked:
Refreshing, isn't it? Reassuring even. This IS an appropriate time to just be keeping your options open. Indeed, these shoppers likely are looking ahead to Holiday, when they will be willing to spend on others.
Meanwhile, the Gallup/Franklin Templeton folks conclude "a majority of Americans plan to moderate their overall spending." Inventory buyers would be well advised to do the same! ---- * Paul Berg and Megan Brenan, Americans Favor Saving Over Spending. Gallup News, September 9, 2020.
Usually at this time of year, we would be encouraging you to remember that "the lull" is about to arrive. That is, that time span from Black Friday/Cyber Monday through early December is typically much slower for retailers. And then, come December 10th or so, the Christmas sprint begins! Ahh yes. That was then. And this is, well, 2020.
If 2020 was the year of pandemic disruption and scramble-to-survive mode for retailers, 2021 may be the year of relentless Retail Is Detail reminders. Many of you may well have benefitted from one or more rounds of PPP loans and their potential "forgiveness." Now comes the reminders that you must seek forgiveness. In writing. From the bank that loaned you the funds. And there are some time deadlines involved. Yikes. Oh, and total forgiveness may not be forthcoming. It depends. (See below for these guides* and disclaimers from the SBA.) Then there are the so-called "bookkeeping details" surrounding all this.
Thanksgiving time in the U.S. is not a good time to be a turkey. And, the week after Thanksgiving is obviously not a good time to try to be selling turkeys, or turkey dinners. Especially at full price. The same thing applies to your inventory! Especially with all the challenges and distractions surrounding supply chain issues, there could be lots of "turkeys" languishing in the inventory in your stores. You know; non-selling, distressed, old, unappealing leftovers among your merchandise.
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.
Except for the lingering sugar high, Halloween is soon to be behind us. Retailers know what that means: on to the Holiday Season! Of course, for most retailers that brings a major focus on sales. But, savvy retailers are focused especially on the targeted ending inventory on December 31. Those retailers are carefully watching sales reports, and are poised for action.
Each year at this time, our thoughts turn to turkeys. No, not the ones that will adorn many dining tables on Thursday. But the "turkeys" lurking amidst your inventory. You know; non-selling, distressed, slow-moving, old, unappealing leftovers among your merchandise. But this year, frankly, our worries extend beyond the turkeys. Here are some of the reasons why.
As a result, in this environment, consumers are scaling back their discretionary purchases, and/or choosing to spend on travel, dining out, or other experiences versus retail merchandise. Not an upbeat prospect for retailers, is it?
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