“Everyone I know in retail is feeling stressed out.” That’s the assessment of one retail worker I know, and it fits with everything else I have heard locally. It is not that business is frightfully slow — in total so far, retail foot traffic seems to be slightly stronger than last year — but this season’s promotions and initiatives have not been going well, accountants and managers are pushing for more, and the workers on the retail floor can push the customers only so far. For their part, customers simply lack the buying power that retail strategists had planned on for this season. You can hardly blame the customers, but sooner or later it puts everyone in retail in the stressful position encapsulated in the phrase “Don’t shoot the messenger.”
There is more at stake, it seems, this year. Best Buy in particular is facing a hostile takeover, or at least it must seem so to the electronics chain’s employees. If the deal goes through, the new owner, who is out of touch with the current marketplace, could easily run the whole chain into the ground forcing a January 2014 liquidation. That scenario or some other upheaval is likely unless the customers come through this season, yet with the chain’s financial squeeze, product selection has been dialed back aggressively, and customer response has been understandably tepid.
Early this weekend, I saw the kind of heavy turnout you would hope for in the mid-December weekend, but it did not last long. Sunset came on Saturday, and by 5:00 I was asking, “Where did everybody go?” On Sunday, traffic at retail wasn’t much. This early-weekend pattern is something I observed during the last two Christmas seasons. The early weekend makes sense if you picture people shopping with debit cards and cash. When the paychecks come in, they can go shopping. When the money runs out, they must go home.
Retailers should not blame themselves. No amount of glitz and star power can persuade cash-limited consumers to borrow money to finance the retail sector’s next expansion plans. That spending will arrive only when consumer income rises and consumer debt falls — only when the deleveraging is done and the national economy is righted. The level of stress at retail this season tells you that that will come too late to save some of the retail operations that have been struggling this year.