2009 ECONOMIC OUTLOOK SAYS SHOPPERS WILL BE STRETCHING THEIR PURCHASING POWER
Retail sectorAuthor :
Donna Messer 
Donna Messer is a networking expert. She is the author of “Effective Networking Strategies” a Canadian Best Seller. Donna is a motivational speaker, addressing audiences on three continents. To reach Donna or get a copy of her book - www.connectuscanada.com
The National Retail Federation (United States) released its 2009 economic forecast, projecting that retail industry sales (which exclude automobiles, gas stations, and restaurants) will decrease 0.5% from last year. According to its quarterly Retail Sales Outlook report, NRF sees more challenges ahead as consumers continue to shift spending priorities.
According to NRF Chief Economist Rosalind Wells "Most of the consumer behavior we saw in 2008 will continue well into this year. Shoppers will be seeking value and will be trading down to discount and off-price retailers in order to stretch their purchasing power.”
The first half of the year will see a continuation of the weakness that was felt in most of 2008. First half sales are expected to decline 2.5 percent. There should be some improvement in the third quarter with sales decreasing 1.1 percent. In the fourth quarter, sales are expected to improve 3.6 percent.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.
NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers. 2008 sales were $4.6 trillion.
HOW DO THESE STATISTICS REFLECT THE CANADIAN ECONOMY ?
Some discount and off price retailers are already taking action, while other retailers are ready to capitalize on the home renovation tax credit.
A tax credit of 15 per cent will be available on spending over $1,000 and up to $10,000 until Jan. 31, 2010.
The program is expected to cost about $3 billion and benefit 4.6 million Canadian families who own homes and cottages. However, the incentive may generate tax revenues traditionally lost in the underground economy.
Canadian retailers are eager to piggy back on the federal government’s new home renovations tax credit by offering additional incentives to secure a piece of the action in the face of consumer angst. Rona Inc. and Home Depot Canada, the country’s two biggest renovations chains, said they’re preparing to announce programs in the coming days.
"Consumers are already getting something out of it and what we want to do is give them something extra to complement it in our own way,” said Rona spokeswoman Eva Boucher-Hartling. The company introduced a 10 per cent rebate on eligible purchases made through Quebec’s tax credit program for projects exceeding $7,000. Consumers can get a gift card worth up to $750 for future purchases if they use a Rona Visa credit card.
Home Depot is developing an incentive for the Canadian market, but hasn’t forecasted the impact on its sales. The world’s largest home renovations retailer said the federal tax credit will give Canadians confidence to invest in their homes.
Canadian Tire says its strategy is to continue to offer low prices and weekly discounts on some products.
But retailing giants may still face a challenge convincing weary consumers to open their wallets. All are looking for initiatives that will help stimulate the economy.
Ottawa is hoping its tax credit will encourage Canadians to advance renovation projects to stimulate the economy and help industries hurt by the downturn.
The tax credit can apply to most home improvements. But routine repairs, maintenance, and the purchase of tools, furniture, appliances and electronics are excluded.
One of the ways to help combat the economic slump is to arrange events that will get the public to your store! If you have a store front location use your imagination to create unusual exhibits to lure shoppers. Join forces with neighboring business owners and host themed events.
Whatever you do, notify the media! They are looking for stories that will sell papers and with all the doom and gloom – your events just might be the order of the day!
Getting publicity will be the basis for success with every retailer. Forming alliances with local media should be part of your strategy.
According to NRF Chief Economist Rosalind Wells "Most of the consumer behavior we saw in 2008 will continue well into this year. Shoppers will be seeking value and will be trading down to discount and off-price retailers in order to stretch their purchasing power.”
The first half of the year will see a continuation of the weakness that was felt in most of 2008. First half sales are expected to decline 2.5 percent. There should be some improvement in the third quarter with sales decreasing 1.1 percent. In the fourth quarter, sales are expected to improve 3.6 percent.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.
NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers. 2008 sales were $4.6 trillion.
HOW DO THESE STATISTICS REFLECT THE CANADIAN ECONOMY ?
Some discount and off price retailers are already taking action, while other retailers are ready to capitalize on the home renovation tax credit.
A tax credit of 15 per cent will be available on spending over $1,000 and up to $10,000 until Jan. 31, 2010.
The program is expected to cost about $3 billion and benefit 4.6 million Canadian families who own homes and cottages. However, the incentive may generate tax revenues traditionally lost in the underground economy.
Canadian retailers are eager to piggy back on the federal government’s new home renovations tax credit by offering additional incentives to secure a piece of the action in the face of consumer angst. Rona Inc. and Home Depot Canada, the country’s two biggest renovations chains, said they’re preparing to announce programs in the coming days.
"Consumers are already getting something out of it and what we want to do is give them something extra to complement it in our own way,” said Rona spokeswoman Eva Boucher-Hartling. The company introduced a 10 per cent rebate on eligible purchases made through Quebec’s tax credit program for projects exceeding $7,000. Consumers can get a gift card worth up to $750 for future purchases if they use a Rona Visa credit card.
Home Depot is developing an incentive for the Canadian market, but hasn’t forecasted the impact on its sales. The world’s largest home renovations retailer said the federal tax credit will give Canadians confidence to invest in their homes.
Canadian Tire says its strategy is to continue to offer low prices and weekly discounts on some products.
But retailing giants may still face a challenge convincing weary consumers to open their wallets. All are looking for initiatives that will help stimulate the economy.
Ottawa is hoping its tax credit will encourage Canadians to advance renovation projects to stimulate the economy and help industries hurt by the downturn.
The tax credit can apply to most home improvements. But routine repairs, maintenance, and the purchase of tools, furniture, appliances and electronics are excluded.
One of the ways to help combat the economic slump is to arrange events that will get the public to your store! If you have a store front location use your imagination to create unusual exhibits to lure shoppers. Join forces with neighboring business owners and host themed events.
Whatever you do, notify the media! They are looking for stories that will sell papers and with all the doom and gloom – your events just might be the order of the day!
Getting publicity will be the basis for success with every retailer. Forming alliances with local media should be part of your strategy.