Those of us who were in business around 2008 remember the difficult years when the U.S. economy took a downturn now termed the Great Recession. According to the NBER (National Bureau of Economic Research), there have been ten recessions since World War II. The question that is on everyone’s mind is whether we’re heading for one now.

A recession is a significant, widespread, and prolonged decline in economic activity that impacts the GDP (gross domestic product), employment, industrial production and wholesale-retail sales. The latter is certainly a concern for those of us who own a store, and many of us are understandably worried about what may be coming.

There are good reasons to be concerned about our current economy – the lingering impact of the pandemic, supply chain challenges, high fuel costs and inflation. However according to the National Retail Federation, as reported in Women’s Wear Daily, low unemployment is indicative that we are not in a recession – and are unlikely to experience one this year.

We can all see that the economic situation in 2022 is a bit rocky.  An article in Beauty Independent refers to “pervasive grumpiness” as being a factor, in addition to climate anxiety and new viral disease worries. Energy costs have caused concern, and some of our big box competitors are saddled with excess inventory (see my recent article in Gifts and Decorative Accessories magazine entitled Overstocked and Stuck? if this is also the case in your store).

The uncertainty of what may be coming is unsettling. While experts don’t agree as to whether we are heading for a recession, there are indications that consumer spending is declining. But even if this is the case, stores that don’t sell high ticket items may find that they do just fine with what might be called small indulgences such as toys, bath and body products, candy and cards.  Consumers are starting to entertain again, and to celebrate the holidays together. 

If you see indications that consumers in your part of the country have less discretionary income to spend, pay attention to this fact as you plan your buying. You may find that certain categories and price points are more “recession-proof” than others, so it’s important to focus your inventory dollars on where they can be the most productive in today’s economic climate.

Happy retailing, 

Carol “Orange” Schroeder