In these strange economic times, some retailers are experiencing slow sales while others are thriving. Summer clearance sales are popular as families look for bargains and prepare to send children back to school.
“The state of retail depends on the type of retail you’re in,” says University of Mississippi retail strategy professor Chuck Ingene, Ph.D. “When the economy is bad, discounters, dollar stores and big box retailers do better. Others, like automobile dealers, unless they’re selling those cars with high mileage, are in a world of hurt.”
The professor says apparel retailers on the high end of the scale may be experiencing problems as families shop for back-to-school clothing.
“People will shift from high-end goods to middle and those who were buying in the middle will shift to the lower end,” he said. “Big department stores bought inventory months ago and they have plans to keep it coming in so that’s what you see with these desperation sales. They’ve got to get old merchandise out the door to make room for new inventory. They are efficient with long-range buying and this is a down side for them now.”
Good and bad
Although the number of mom-and-pop stores has been dropping since the 1930s, according to Ingene, Mississippi still has quite a few. A couple of those, Growing Pains in Natchez and The Lollishop in Tupelo, are running their annual summer sales.
Growing Pains owner Tracy Henry is pleased with the way things are going in the children’s shop. “It’s always slower in the summer but overall it’s been good,” she said. “I have two sales every year beginning on January 2 and on July 5. I send out mailers and that gets people in.”
Her sale is not geared to back-to-school needs in a town where most students wear school uniforms. “I don’t have a sale because business is slow but because I need to move merchandise out to make way for fall things,” she said of her ten-year-old shop.
The story is different at The Lollishop where owner Doyle Lambert says things are so tight he can’t be out any money right now. He feels rising gasoline prices have cut sales in half in recent months.
“We’re running a sale with bargain basement prices,” he said. “Summer’s about over and we need to clear merchandise out. There’s competition right across the parking lot and we have to sell at the same prices.”
‘Looking for bargains’
Michelle Rogers, marketing director for Edgewater Mall in Biloxi, says it’s the normal time of year to have sales. “Overall, mall traffic has been very good,” she said. “It’s doing as well and better than before Hurricane Katrina, but unquestionably people are looking for bargains and feeling the pinch at the gas pump.”
She also notes that the trickle down effect of the increase of transportation costs for merchants’ inventory may not have reached retailers yet.
Ingene says as long as people are worried about the economy they will be cautious about buying goods. “Money out of pocket for gasoline is not available to spend on other things,” he said. “I track car sales nationally and they’re way off for total sales but sales for high-mileage cars are up. For a lot of people, the first time a fill up hit $100, they freaked out and went to a car dealer to buy something that uses less gas.”
Technology has become necessities in today’s world. That’s why Benton Hagman, owner of MicroTech Computers in Yazoo City, says sales are good.
“Fortunately, we’ve been really busy with sales and with service as a lot of people are prolonging the life of their equipment and keeping what they have,” he said. “A lot of students got computers as graduation gifts.”
Additionally, students are buying computers to begin their college studies. Hagman says some schools require students to have computers for campus communication. “A lot of courses require students to have online access even if they’re on campus,” he said. “And of course they’ve got to have all their songs downloaded, too.”
Ron Aldridge, director of the state chapter of the National Federation of Independent Businesses, feels all retailers are suffering to some degree.
“With the double-digit increases in fuel, utilities, food and health insurance costs along with the recent federal minimum wage increase and mail outs from county tax assessors of increased property valuations, which usually results in increased taxes, I don’t know of any sector that isn’t taking a hit on sales right now,” he said.
He observes that retail shops don’t have the options of reduced work weeks and teleconferencing with employees working at home to reduce costs as many businesses and government agencies are doing.
“Retailers have got to have employees on the job to open the store, make sales, produce products, answer the phone, etc., and sometimes they have to do almost all of that concurrently,” Aldridge said. “Obviously, more retailers are having to look to adding sales, if possible, on the Internet as well, since customers are limiting their shopping experiences, especially impulse buying trips.”
Contact MBJ contributing writer Lynn Lofton at email@example.com.