Retail Outlook: Light at the End of a Long Tunnel
Published 5/22/2009
Author: Steven Keith Platt
Steven Keith Platt is Director with the Platt Retail Institute
Summary
According to a new Retail Outlook report from Platt Retail Institute, an end to the economic freefall of 2008-2009 may be on the horizon but a reduction in consumer spending may continue for a prolonged period.
Due to both a lack of credit availability and declining household wealth, a return is likely to historic levels of consumer spending. For the past 24 years or so, consumer spending as a percent of GDP has been creeping up. For example, at the end of the 1981 recession, personal spending accounted for perhaps 67% of GDP. Today, it approaches 71%.
The days of increasing incomes, net worth and debt are now behind us, and this forced period of austerity in spending will be felt most acutely by the retailers.
When the economy turns, will consumers return to previous levels of spending? Leave your comments here.
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