End of the recession: Are we there yet?

GDP growth over the last two quarters points to a statistical end of the recession, but high unemployment and economic uncertainty still linger over consumer spending. RetailWire panelists recently discussed whether a continued focus on expense and inventory control is still the appropriate strategy. My opinion:

It’s time for retailers and CPG companies to pivot from a focus on reduced expenses and inventories to driving top-line sales. The initial reaction to the speed of the downturn was a collective retreat on cost issues, and many stores’ bottom lines showed strong improvement during the second half of 2009 despite lackluster sales.

But there is plenty of statistical data (as the article points out) showing a thaw in consumer spending and a more upbeat mentality. Yes, shoppers are still spending frugally…but they are spending. (Reductions in the jobless rate during the second half of 2010 can only help.) If retailers and other consumer-driven companies can leverage existing cost/inventory savings against a rise in consumer demand, 2010 can be a very profitable year.


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