In today’s economic times, there is much insecurity. The ordinary person doesn’t seem to know what is happening or how long their current situation is going to last. The other side of this equation, however, is the retail industry. The retail industry has been damaged by the current economic state, and consumer’s reaction to it, as well. Some retail is faring better than others, but no one can argue that operating a retail small business, such as a main street hardware store or shoe store, is more difficult than ever.
A good number of consumers are cutting back at this time. With job security a very real problem and little consumer confidence, many people are learning to do without. In a shoe store, this means a decrease in sales because consumers aren’t spending as much money on unneeded Merrell sandals. When people cut out the frivolous spending for things such as new Merrell shoes for a special occasion or even just getting new shoes for the fun of it, then retail profits can plunge considerably.
In addition to spending cutbacks, consumers are also searching for ways to spend smarter. Thrift shops are becoming more and more popular because of the quality and price. Shoe stores suffer from this trend because of their inability to compete with the extremely low prices of second hand shoes. The bright side of this factor though is that when trying to spend conservatively, most consumers will “splurge” some and purchase things new that are of better quality and that will last. This, coupled with the increased competition during the past decade from internet-based retailers, has forced the closure of countless small businesses across the country.
When a retail store like a shoe store is affected by consumers spending less or shopping elsewhere, they are compelled to make changes they don’t want to make. Remember that we are discussing retail small business, where the owner has built their business themselves. When their income diminishes because of economic fall-outs, they may have to let some of their workers go. This can be difficult because generally the owners work directly with the employees. If the business has expanded to multiple locations, then they may have to close down a store. Either way, they are losing skilled workers and friends and in turn, inadvertently adding to the fear consumers have over job stability. It is a viscious cycle that many retail small businesses find themselves in today.
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