This week retail analysts and media commentators hit an all time high on the stupidity meter when they claimed a “retail recession” is upon us. When oh when are these idiots going to understand that retail doesn’t work month-to-month, it works year on year. The pure economic definition of a recession doesn’t hold up when applied to retail sales numbers. According to ABS data March 2017 is 2.5 per cent better than March 2016. Look it up. This has been the trend consistently now for about a year.
Retail sales are keeping marginally ahead of inflation and about 1.4 per cent behind the 50-year average growth rate at of 3.9 per cent MAT. What the investment community just cannot come to terms with is an extended period of slow, steady growth rather than explosive boom-bust cycle that feeds their need for adrenaline trading. Regardless of the real retail growth rate, the figure is still a growth rate and headlines like “retail recession” just create unnecessary negativity. Self-fulfilling prophecy springs to mind, but perhaps that is the intention.
However it is not just in the retail area that we are seeing negative headlines. Right across the economic and political spectrum negativity and provocation is the order of the day. As a once balanced society, we have now come to rue the day that 24/7 news coverage was born. We now have too many news media with too much space and time to fill and all chasing ratings that flip on the volatility of the headline rather than the facts that get buried somewhere deep below if mentioned at all.
Modern news coverage – whether you see it as fake news or real news – is not serving us well. In fact, it is leading to poor decision making or worse still – no decision making at all – as boards and CEOs freak out at the perceived context portrayed by a very negative, sensationalist media rather than the real context playing out in the real economy.
To a certain degree Donald Trump is right. What is now being sprouted as ‘news’ in the media bears less and less resemblance to what is really going on.
So where does that leave us retail practitioners who have dependents that rely on us to make money and stay healthy? We need to ignore the wall of noise and do our homework. There is ample room to make money today in retail. No-one – not even the media’s favourite storm cloud Amazon – has a licence to win every battle forever. Each of us needs to understand our specific context, the consumers we serve and the opportunities that fit our businesses so that we can develop game plans that give us the scope to win.
Then – as always – we have to execute with passion, discipline, creativity and tenacity. These have always been the attributes of great retail and always will. Retailers make money through world wars, real recessions, so-called ‘Global Financial Crisis’ and contagions.
We are not in a ‘retail recession’ but some retailers are acting like we are and killing margins for no gain whatsoever. Stop. Find a quiet place to clear your mind and think about the real context. Develop a plan to make money. That’s what real retailers do year after year and have done for over 3,500 years. And what do you say to all the negative analysts and media commentators? Bah Humbug…or perhaps something a little bit less politically correct.
Peter James Ryan is head of Red Communication and can be contacted on (02) 9481 7215 or at firstname.lastname@example.org.
Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.