US Retailers Continue to Reel from Low Consumer Spending
The retail business has trimmed its expenses to maintain its operation and cushion the impact of low consumer spending amid the economic crisis.
Meanwhile, experts and analysts said that such contingency plan will not be enough since revenue, which is the lifeblood of any business, is the only thing that can save companies from bankruptcy.
The retail business, which is directly hit by the ongoing recession, should have to adopt more contingency plans and cost-cutting measures to cushion the low consumer spending and survive in this weak economy, according to analysts.
While trimming expenses such as massive workforce reduction, settling for lower rent, cutting operational costs, using less energy, and reducing advertising spending may help retail owners to maintain its operation, they will not survive in this recession unless consumers start spending their money to purchase goods.
Financo Inc., a bank which provides investment for retail and merchandising sectors, said strong sales will allow the industry to bounce back but warned that revenues will remain in its lowest situation.
Financo Chief Operating Officer William Susman said retailers are forced to adopt all forms of cost-cutting measures but stronger revenues will be the main solution for all the problems. However, Susman said the industry should not expect rievenues to be stronger for the coming months.
Susman also said that retailers should adjust the price of their goods to encourage consumer spending especially in times when they are worried about indispensable incomes and widespread layoffs.
If the economy becomes viable and strong again, the chief operating officer said that retailers should be able to adjust to the new environment and maximize revenues to recover losses during the hard times.
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