Retail’s new normal

Tracey Samuelson Oct 15, 2014
HTML EMBED:
COPY

Retail’s new normal

Tracey Samuelson Oct 15, 2014
HTML EMBED:
COPY

Retail sales numbers released Wednesday from the Commerce Department suggest consumers spent slightly less in September than the month before.

There were some bright spots in the electronics category, and overall gains from the same period last year. Still, the headline numbers might give retailers some anxiety heading into the holiday season, says Georgetown University professor Marlene Morris Towns.

“I think that retailers are really, really, kind of struggling to get people in, to get people shopping,” she says. “I think they’re pushing to holidays on us faster and faster.”

But Towns is optimistic about consumer spending going forward.

It’s just that we have to take into account the economy’s new normal, says Susan Viamari, who tracks consumers and retail trends for IRI. “The new normal is going to be much more conservative mindset than what we saw before that proverbial bubble burst.”

Viamari says many consumers who cut back during the recession are keeping a tight grip on their spending.

Compare that with a decade ago, RBS Securities economist Omair Sharif says, when homeowners were pulling equity out of their homes or using credit cards to fuel shopping sprees.

“So it’s just a very different environment in terms of your ability to finance your expenditures,” he says. “It’s just night and day versus 2004.”

Consumers are largely limited to spending what they have, says Sharif, and he doesn’t expect that to change anytime soon.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.