The Washington Post reports that the US Commerce Department has issued a new report saying that “as the economy spiraled downward” last December and contracted at a rate not seen in two decades, “consumers retreated, spending $102.4 billion, or 1 percent, less than the month before … The savings rate rose to 3.6 percent from 2.8 percent.”
The result? When consumers held onto their money, it “cut off oxygen” to a broad number of retailers, which is leading to some going out of business (Circuit City, Linens ‘n Things) and others slashing their workforces (Macy’s, Starbucks).
The result? When consumers held onto their money, it “cut off oxygen” to a broad number of retailers, which is leading to some going out of business (Circuit City, Linens ‘n Things) and others slashing their workforces (Macy’s, Starbucks).
- KC's View:
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All this means is that a lot of retailers need to learn to hold their breath. And tread water. All at the same time.
