Hi Patty, Do you think retail stores should close at the first sign of softness? They sure seem to open at the first sign of demand. Isn't there a way of viewing selling goods as an activity that is temporal and can adapt, move, change, close, etc. when the customer adapts? It reminds me of the strategies of Middle Eastern camel caravans or Middle Ages Faires, which moved shop following customers. Isn't it stange how much attention we pay to the closing of stores, compared to the opening? Do managements allow for a certain number of stores to fail every year and now we're seeing the compounded effect of it happening a lot faster than anticipated? What do you think about all this focus on the what looks like a normal part of the retail cycle, or are we in unchartered territory?
Hi Linda -No, retailers should NOT close at the first sign of softness. But what we've seen is a wave of consumerism, a rising tide lifting all boats. The problem is that consumers have spent money they don't have, and now the loans are being called. By default, even in a steady employment state (which we don't have) spending would have to diminish as more dollars go to debt repayment. Add in higher food prices, higher mortgage payments as resets continue, higher interest rates on credit cards as companies raise rates, and I don't see how it can't get ugly fast.The Intl Council of Shopping Centers expects 73,000 closings in the next six months. That's significant. Hugely significant. This is way beyond a normal cycle, partly because it was more than a two standard deviation event in the boom direction.
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