Bad News -- Good News

What’s the outlook for the holiday selling season? Here’s the bad news: If you are a department store or a big box store, the outlook may not be so rosy. With retail sales continuing to be in a slump, a recent article in the Wall Street Journal  notes, "The poor numbers may force retailers to reduce already spartan inventory plans further to avoid the 2.8% drop in holiday sales they rang up last year and the margin crushing markdowns they had to take to move excess inventory." 

Stores will not be bulking up inventories at the same level as as we have seen in years-past, so customers will not find as much varied selection. Consumers will also probably not encounter as much deep discounting as in previous years. And if merchandise does not move at a fast enough rate, these larger retailers may cancel orders in order to sell stock on hand. 

So much for the bad news. What’s the good news?

The good news is that the bad news for big retailers is good news for the smaller independents. Without the usual deep discounting by bigger retailers, smaller independents can be more competitve. With less selection in to choose from in the department stores, consumers looking for that something special may turn more to the smaller shops offering more unique selections. And one final point: the article notes that consumers are focusing more on "accessorizing what’s already in the home or the closet, not buying whole outfits, furniture sets or entertainment systems."  Accessorizing is one of the specialties of the gift and decorative accessories retailer.