There is plenty of news coverage about the challenging economic situation. We are seeing an impact on house prices in some areas. News outlets are full of stories about the rising cost of raw materials and retailers being squeezed unable or unwilling to increase their prices.
There are reports from the IMF and others that a global recession appears unavoidable.
All of this plays into consumer confidence and discretionary spending is typically hit first in such situations, except for lotteries – those sales tend to increase.
I expect to see more news coverage about it, and I expect to see more retailers impacted.
Our advice is to run your business as if things are already tight, as if the recession is here. Do what you know works:
- Buy what sells easily, and quickly.
- Keep your roster as tight as possible.
- Increase your margin every opportunity you have.
- Run a loyalty program and consistently pitch this to every shopper.
- Be positive in-store and on social media.
- Be active on social media and elsewhere is trying to attract new shoppers.
The three key opportunities in local retail are: people through the door, the depth of their purchase basket and the margin you make on what they purchase.
The healthiest retail businesses are those that work on all three at once, every day, consistently.
This means chasing new traffic and attracting regulars back more often, getting people to purchase more each visit and achieving a better margin every time you are able.
Basic stuff really. But, now is the time to be energised about this.
I first shared this unremarkable advice with newsXpress members earlier this week and with retailers in the Tower Systems community this morning. I share it here as I think it is relevant to all newsagents.
There will be some over the next year or two of choppy waters who complain about the tough conditions as if they have no opportunity to mitigate the impact in their businesses. While, for sure, there will be aspects of the economic conditions that we cannot mitigate, there is plenty we can. hence, the advice I provided, along with the urging to engage now and consistently.