If you are like most Americans, you feel better this year, but there is still a nagging doubt in the back of your mind, “is this as good as it gets?” True, the economy has picked up, spending is up, the recession is no more, but we are still feeling the pinch. How shall we shop for Christmas this year?
We did some digging to find out how much has changed and how much has stayed the same.
The following figures provide some context for the economic growth since before the recession until after, with per capita GDP not yet recovered to pre-2008 levels:
The gross domestic product increased from $13.3 trillion in 2007 to $15.1 trillion in 2012.
GAFO retail sales seem to be slowly recovering from the recession, and consumers are spending again. Consumer confidence is back up to about 73 percent of what it was in 2006, but spending at shopping centers is ACTUALLY DOWN in real constant dollars (adjusted for inflation):
GAFO retail sales in the nation increased from $968 billion in 2002 to $1,032 billion in 2010, for a compound average growth rate of 1.1 percent. However, from 2007 to 2010, compound average growth was -.03 percent nationally.
As everyone knows, brick-and-mortar stores are in competition with internet retailers for market share. With the ease of shopping online in the comfort of your home or office, and the ability to compare sale prices amongst retailers, the brick-and-mortar stores have to come up with creative ways to appeal to the consumer as the better way to shop drawing them to their retail store locations. Some retailers are offering free shipping, extended hours along with other special promotional items available only in stores.
Electronic shopping and mail order retailers suffered only a mild set back during the recession and bounded back with sales for the twelve months through February 2012 accounting for $308 billion. The overall sales market rose 30 percent since the peak in 2008 as reported in an article, “Retail Sales Recover, Mostly, From Recession”, written in The New York Times, by Floyd Norris.
One of the biggest impacts of the recession on the retail market is the change in the behavior of shoppers. People are bargain shopping and looking for the biggest bang for their buck. They are more interested in products or items that are reliable and have lasting value rather than purchasing the latest gadgets.
Consumers are looking to save money where possible, which has increased on-line shopping as well as sales at discount and dollar stores such as Wal-Mart, 99 Cent stores and Target. Not only are shoppers finding better bargains, they are saving time and money especially when factoring savings of not having to drive with high gas prices.
The recession has also caused a spike in sales at thrift shops/resale stores, as the number of resale shops opened within the last year increased approximately seven percent.
According to comScore.Inc, holiday retail spending over the four-day Thanksgiving weekend was estimated at $59.1 billion dollars nationally, up nearly 13 percent over last year. Black Friday online sales exceeded $1 billion, rising 26 percent to $1.04 billion.
How do you feel this year? Let us know if your pocketbook feels lighter or if you are back to normal. Have we stabilized at the new normal? We are anxious to hear from you!