In a July 30 story, Fortune reported that “adjusted for inflation, retail sales dropped 2.6% from a year ago in the second quarter, marking their third straight quarter of contraction.” Sounds like retail is technically in a recession. The article went on to list the growing number of retailers seeking Chapter 11.
There is a logical pattern to the order of retailer bankruptcies during this downturn. The first to go sold stuff we don’t really need. Examples here are Sharper Image, Lillian Vernon, Fortunoff. All went into bankruptcy in February this year.
Round 2 has affected retailers who sell stuff we can get other places we like better. Examples include Linens ‘N Things, Bennigan’s, Steak & Ale and Mervyn’s. These stores just entered bankruptcy last month.
In these uncertain times, the only sure thing is being a place your customers want to shop. Retail differentiation matters now more than ever.