It’s a jumble out there!!!!!
Once a month when they release the economic indicators it’s time to look at them and try to make some sense out of them. Forget the political implications of the numbers and look at them somewhat analytically. Job growth is dismal with the real number over 10%. when you factor in those who stopped looking. On the positive side of employment private employers increased hiring more than expected and for the first time claims for unemployment are down. Car sales year over year are up across the board. Mortgage rates hit a record low with 30 year rates at 3.62% and yet refinancing was down while new home purchases increased a bit. Truly a mixed bag of numbers.
Now to the numbers we care about, retail sales. Retail sales slowed in June with a mix of winners and losers. TJX up 7.0%, Limited Brands up 7.0%, Target down 2.1% and Kohl’s down 4.2%. Here are two surprises, Nordstrom up 8.1% and Saks up 6.0%. It doesn’t take a PHD in economics to determine the economy is in a malaise. One pundit described the current cycle as a “Growth recession”. It’s the first I’ve head that description but it really seems to fit. In my world I’m see a bit more activity. Retailers who have weathered the storm are accessing a number of things including their POS systems. Up to this point most independent retailers have maintained a cautious posture regarding any capital investment. As I’ve stated in previous blogs, if you’ve survived up to this point its time to position yourself for future growth. Part of that re-positioning is accessing all aspects of your store technology infrastructure. Things you should think about are your POS system, ecommerce integration, customer facing technologies, social media and mobile devices to name a few. Develop a short term three year and a long term five year plan laying out and prioritizing the technology upgrades and investments that will pay the biggest dividend to position you for the growth cycle. I don’t know when it will start but no mistake their will be a growth cycle. It’s time be cautiously optimistic and make some tactical investments that can pay dividends. It’s a jumble out there but this to shall end, be prepared.