Editor’s Page
Cynthia J. Hoffman
Retail Takes a Breather
EVEN WIDE-EYED OPTIMISTS WOULD HAVE TO AGREE
that the US economy is in a serious slump. Single-family home
prices are down. Unemployment is up. Manufacturing and trade
inventories and sales are down. Gas and food prices are up.
And the confidence level of the nation’s consumers, whose
insatiable appetite for spending kept the economic engine
purring over the past few years, is decidedly down.
For the fourth straight month, consumer confidence declined
in April, according to the Conference Board. The private
research group’s confidence index dropped from 65. 9 in March
to 62. 3 last month. This was due to a sharp decrease in the
Present Situation Index, which gauges consumer sentiments
about the current economic climate, from 90.6 to 80.7, the
Board relates.
Concerned over rising expenditures, a dismal business picture and slowing job market, shoppers are keeping a tighter rein
on purchases. In turn, many of the nation’s retailers posted negative sales figures for the first quarter. But with the economic
stimulus rebates soon to reach the mailboxes of more than 130
million households, retailers are hopeful. Some are being proactive: Kroger and Sears are offering 10% bonuses for shoppers
buying store gift cards with their rebate checks, and Wal-Mart
announced that it would cash the checks free of charge.
As the retail industry gears up for ICSC’s Recon event in Las
Vegas later this month, some segments of the business are
doing much better than others, report the participants in this
year’s retail power panel, our cover story. Grocers and necessity
retail continue to thrive while stores offering the “extras” or luxuries are seeing far less traffic, our experts relate.
Also in this issue, associate editor Danielle Douglas looks at
the softening demand for retail space. A growing number of
retailers are scaling back new store openings, while struggling
companies close locations. Consequently, vacancy rates are rising and strong tenants shopping for space are gaining an edge
at the negotiating table. All of which are signs of the times.
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