The impact of rising prices for gas, food, and many other products is being felt by many different industries. Perhaps one of the hardest hit is the retail industry. Weakened consumer buying power is a direct hit to the business of stores that count on us to buy clothes, electronics, home products, and much more. Retail sales for stores open at least one year rose 2.6% in July, the lowest gain in four months, according to the International Council of Shopping Centers. The sales trend could be hurt further as business created by economic stimulus checks begins to wane.
The unimpressive sales results from the back-to-school selling season do not bode well for the 2008 Christmas season. Retailers will most likely win customers over with a steady diet of sales as well as special promotions to spur store traffic. Low-price retailers like Wal-Mart and Costco are positioned to weather a tough shopping season, but other retailers will be forced to get creative to convince consumers to let go of their money. This year, it will not be enough to have the right products at the right time. The right price will be as important, if not more important to consumers this holiday season.
Link: Blomberg.com - "U.S. July Retail Sales Slow, Hurting Back-to-School"