Retail will adjust to the ‘new normal’
TEXT OF STORY
Steve Chiotakis: This morning, wholesaler Costco reported stores open at least a year saw a 9 percent rise in December sales. But fashion chain Limited Brands saw its sales drop by 2 percent year over year. It’s a tough stretch for retailers; it’s probably going to go on for a while. As Marketplace’s Alisa Roth reports.
Alisa Roth: Here’s the thing: even if Americans are starting to buy more stuff, they haven’t gone back to their old spendy ways.
Emanuel Weintraub is a retail consultant. He says they probably won’t start anytime soon.
Emanual Weintraub: There is an insufficient amount of consumer credit availability and spending availability to support the number of retail outlets that exist.
He says companies will have to close some of their stores or shrink them to get more in line with what he calls the new normal. And then there are the stores that might go out of business altogether.
Wayne Hood follows the retail sector of BMO Capital Markets. He says some companies would have gone out of business ages ago, but banks keep giving them credit. He mentioned places like Sears and the discount clothing store Bonton.
Wayne Hood: You know others as well, here we are a year later and once again they’ve survived.
He says some of those stores could get bought by bigger, more cash-rich competitors. But some of them will just go the way of last year’s fashions and disappear.
In New York, I’m Alisa Roth for Marketplace.
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