Like us, many of you are watching with concern as the U.S. stock market starts the year in free fall, and the media pours kerosene on the fire. Additionally, the commercial world is wondering if China’s more modest growth is an aberration or the new normal.
For owners of retail operations, who were smashed by the recent Great Recession, these dark clouds are not welcome at all. And if consumer confidence were to plummet, so would sales, most likely. That would be painful!
Let’s be perfectly clear: we are called a lot of things, and answer to some. But we are NOT economists! Whew!
But, before you ask, here is our amateur opinion of this downtown:
- It won’t last long.
- By the fourth quarter, most of the world’s economies will be feeling robust.
- And independent retailers need to be prepared to take advantage. Hunker down now, but be ready for the rebound.
Oh. You want to know how we reached that glossy conclusion? Fair enough.
First, the remarkably depressed oil prices (a major contributor to balance sheet erosion worldwide) were caused by a glut of oil backing up. Finally, that glut will subside in order that suppliers can raise prices. Too much pressure to do otherwise.
In much the same manner, several other “gluts” are undergoing better management.
- Consumer goods at deflationary prices is simply not sustainable economically. Third world producers are learning that, finally.
- Millions of immigrants upsetting the economies of many countries. Those very countries will, we like to think, exert their diplomatic and political muscle to correct some of the reasons that cause the fleeing, beginning to reverse the flow. There are some sound leaders, after all!
- Millennials worldwide are coming forward, and will influence economies, elections, the environment, and stability like no generation before. They’ve watched their parents and grandparents botch things up. They are one glut we all can applaud!
So, before you ask, we’ve offered our crystal ball gazing. Now, what’s yours??
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