retail news in context, analysis with attitude

The Wall Street Journal reports this morning that “retailers are coming to terms with a new reality: the consumer who traded down during the recession and never came back.

“Buffeted by high unemployment, heavy debt loads, falling home values and high food and gas prices, these shoppers have been whipped into a permanent state of consumer caution. They buy only what they need, avoid premium labels, clip coupons and scour sales.”

During the coming months, analysts say, consumers can expect to see retailers responding to this trend with sales, promotions, more promotions, expanded private brand offerings, reinstitution of such old-world schemes such as layaway, and even more promotions.

Chris Christopher, senior economist at IHS. Global Insight, puts it this way: "Consumers are fragile, fatigued and fed up.”
KC's View:
Want a snapshot of how tough the economy has gotten for a lot of people?

You don;t have to go any further than the Wall Street Journal sidebar, which notes that even babies are being victimized by recession: “Recent data show diaper sales are slowing and sales of diaper-rash ointment are rising.”

In part, the slowing in diaper sales - and we’re talking volume here, not dollar sales, so it isn’t like people are spending less by purchasing them on - can be attributed to better diaper technology. But the increase in diaper rash ointment sales suggests that this is not the whole story ... and that consumers are so pressed by financial concerns that they are no longer able to turn the other cheek.