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.
"It got Obama elected, but it left a swath of economic devastation throughout the country."
ReplyDeleteShouldn't that read: "The panic fed by these irresponsible sensationalist journalist hacks left a swath of economic devastation throughout the country and got Obama elected."
For more than 45% of Americans, Obama getting elected is not a good thing that balances out the bad economic news.
When I say, "It got Obama elected, but it left a swath of economic devastation throughout the country."
ReplyDeleteIt conveniently puts the value judgment on the media, not me. However, I'm very clearly in the 55% who are glad about the outcome, despite the means.
51 or 52%
ReplyDeleteAccording to CNN, it was 53%, and that's a greater percentage than Reagan in 1980 or Clinton and Bush in any of their elections. The only first term President in my lifetime to get a greater percentage of the vote was Bush I who was coming off the still popular Reagan legacy (and facing one of the worst Democratic candidates ever).
ReplyDelete"With crisis comes opportunity."
ReplyDeleteAbsolutely - it's a great time to be bargain hunting for stocks (I'd avoid the financial sector unless you've got insider info ;) ) and as far as being a business owner - if we can make it through this we'll have a lot fewer competitors to deal with...