The retail industry makes up approximately two thirds of the entire U.S. economy. How is its health? Have we weathered the recessionary storm, or will retail business continue to be choppy? As designers and manufacturers of retail point of purchase displays (POP displays), we, like many companies not directly in retail, have a strong interest in how the sector performs.
One of the key statistics that economists use to measure the health of retail is store openings and store closings.
The pace of store closings in 2010 has slowed from 2009, but has far from stopped. Popular names that have announced closings for the current year include Waldenbooks (Borders), Men’s Wearhouse, Foot Locker and Payless.
Announced store openings in 2010 indicate a more positive outlook for business activity, at least in some areas. Companies having announced a large number of store openings include McDonald’s, Dollar General, Walgreen’s, Burger King, Chipotle and Target. Few surprises here: discount operations, food, and drugs have been strong performers during the recession.
Same store sales – another key measure of retail industry health – posted somewhat encouraging numbers in 2009. However, 2008 was a disastrous year for retail, so 2009 numbers, though improved, were still short of sales posted in pre-recession years.
Other mildly positive trends -
- Bankruptcy filings for Q110 are substantially lower than Q109 filings
- U.S retailers are partially compensating for slow U.S. sales with global store openings
- The pace of retail unemployment has slowed – but jobs are still being lost
The retail recovery, similar to most sectors of the economy, proceeds cautiously. However, other factors beyond natural swings in economic strength are at work in the retail industry.
New online business models have put enormous pressure on brick and mortar operations – Blockbuster and Borders being prime examples.
Luxury retailers may bounce back when prosperity returns, but many observers believe the extreme difficulty of this last recession will permanently change buyer behavior – much as it did following the Great Depression, when debt aversion became a generational value.
POP Displays
- Create eye catching designs to boost in-store sales
- Create cost effective designs that use economical and sustainable materials
- Manage POP display assembly and delivery to streamline operations and minimize shipping costs
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Packaging Materials, Packaging Equipment, Packaging Solutions
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