Monday, October 13, 2008
Consumer confidence will be key factor in how economy moves forward
|It’s been a wild couple of weeks in the financial markets – no matter who you are, what industry you work in or what community you live in, we’re all feeling uneasy right now. It will be some time before we know what it all means to our businesses and our personal finances. We’re bracing for the worst, but hopeful that the financial turmoil will be effectively managed by the federal government’s proposals and that we will avoid more serious instability.
Here in Orange County and across the country, the retail sector has been on the front lines, feeling the brunt of the storm for much of 2008. I recently attended the ICSC (International Conference of Shopping Centers) conference in San Diego, an annual event that serves as a kind of unofficial industry kick-off for the all-important holiday season. Usually a time of excitement, the mood was more cautious and uncertain this year. Sales are down. Expansion plans across the board are being reassessed. And retailers are bracing for what is expected to be one of the toughest holiday seasons in recent history.
While waning consumer confidence and reduced spending are creating a challenging retail marketplace, there are some bright lights in the sector. Category leaders are faring better than some of their smaller competitors, and in primary locations, restaurants are still highly competitive and experiencing strong sales. And as consumers focus on getting back to basics, discount value stores, theaters, yogurt shops and drug stores are among the most active segments of the market.
Like the rest of us, retailers are going to watch and see what happens in the financial markets over the coming days, weeks and months. Much is at stake, and consumer confidence will be a key factor in how our economy moves forward. As a result, there’s no doubt the upcoming holiday shopping season will be closely watched for signs of what to expect in 2009.