Fiv5e Rules for Retailing in Recession FINANCIAL CRISIS POTLIGHT FIVE RULES FOR RETAILING IN A RECESSION IT WAS GREAT to be in retailing during the past 15 years. Inflated home values, freely available credit, and low interest rates fueled unprecedented levels of consumerspending. Retailers respondedbyaggressively adding new stores, launchingnew concepts, building an online presence, and expanding internationally. While the U.S. economy grew 5% annually from 1996 to 2006, in nominal terms, the retail sector grew at more than
double that rate – an eye-popping 12%. Revenues rose
sharply, profits ballooned, and share prices soared.
But that’s all gone now. Even before the financial crisis and recession began, retailers were hitting a wall.
Same-store sales – or “comps” – have dropped by double
digits for many chains, store closures have accelerated,
by Ken Favaro, Tim Romberger,
and David Meer
Phil Wheeler
