Now Who's Holding Retailers Back?!

Right now, the changes going on in the economy are simultaneously encouraging and discouraging. What a time to be in retailing!

Yes, the overall consumer confidence level is rising. Finally! In fact, we are predicting that Holiday 2009 sales volumes will, in a macro sense, recoup about 50% of last year's drop. That is, if you dropped 9% last December, you likely will be up 4-1/2% this year. We're that optimistic.

But, what's so discouraging is the reticence of vital groups to get on board with this optimism. Not seeing customers come in is not the biggest hurdle right now for many retailers. Instead, the problem is that vendors, bankers, and other lenders are not coming to the party. They need to get with it: the pendulum is swinging back.

The inherent negativism of banks is holding back retailers' ability to get enough product in for Holiday. Failure to raise credit limits for retailers from now through November may, very likely, stifle the sales potential.

What a shame. A missed opportunity for recovery? Timid creditors may be to blame.

Market Upswing in July Means Strong Holiday Sales for Retailers

"He who lives by a crystal ball must thrive on ground glass for lunch."

Ahh yes, a good caution. But some of us believe that the best indicator of the economic future is the six-month predictor of the stock market.

And July 2009 was the strongest July in decades for the stock market. You saw that?!

So, to us, that fact should bolster the optimism of retailers for this holiday season. It's the cause-effect, cause-effect cycle: the stronger stock market leads to improved consumer confidence; consumer confidence drives consumer spending, which should jump up smartly in December-January (six months after the strongest July in decades.)

That's our view. What's yours? (And, shall we save a date in December for lunch?)