October scared the heck out of me. We had two very good weeks, one being our best week on record, and then the bottom fell out. This was due to the stock market crash and the upcoming election, exacerbated to the extreme by the irresponsible media. It got Obama elected, but it left a swath of economic devastation throughout the country. Some businesses will never recover. Some like ours will take a long time to dig ourselves out of that hole, as customers simply hunkered down and stopped buying anything non-essential. This was across the board, and included industries that were so-called recession proof. This was not based in economics, this was a major crisis of confidence not seen since 9/11.
The good news is that the crisis appears to have run its course, ending at around midnight on November 5th, the day after the election. Things have appeared to have returned to a tentative normal, with sales rebounding instantly, although not quite up to normal levels. It took October for everyone to be shocked into acknowledging that we are, in fact, in a recession. Our regular customers have bounced back for the most part, but the muggles, the rest of the world, are still extremely cautious with their money. We'll be fighting for every dollar this holiday season.
Will the holiday season be a bloodbath for retailers, or will we see a decrease in sales in the single digits? That's what retailers are wondering. I've decided we're not stocking for the holidays. We'll treat it like a regular period, although we'll bring in key, low-cost holiday sellers in larger quantities. If there is a blood bath, retailers and manufacturers won't fully experience it until early 2009, when they feel the crawl of first quarter revenue and notice there's no cushion from their holiday sales. Some will fold then, while others will hunker down and simply stop spending on anything to get through it. This will create some clear winners and losers, as stronger companies gain market share and are better positioned to succeed. It would be a fantastic time to start a business, by the way, assuming you had capital and enough start up losses to get you through the year. Better yet, buy an existing distressed business. With crisis comes opportunity.