With the hundreds of billions of dollars in U.S. Government bailouts and the largest mess in decades within the U.S. financial system, will consumers draw back their wallets and purses this holiday season and hurt the U.S. economy even more? Although retailer Wal-Mart Stores, Inc. (NYSE: WMT) has seen same-store sames growth from the late Spring to now, not all retailers have been as lucky. Sentiment says consumers are leaving non-discount stores and flocking to Wal-Mart and its low prices. No big surprise, really.This means retailers will have to 1) get aggressive on marketing and promotion that differentiates their brand and positioning, or 2) compete on price and make that known to the shopping public. How about making sure customers know where to find goods (hint: don't change store layouts to accommodate holiday promotions) as well as the old-fashioned value proposition?
Art Hammer from consulting firm QualPro told Reuters that "What we have seen is that fire sales are not working ... the people who still have money seem to be spending the same total, but are getting a little bit better merchandise or a little bit better service. Wow -- heavy discounts not working in a down economy? Sounds odd, right? But that's the theory. So, as the holiday season gears up for what could be the lousiest season in a decade or more here in a month, we'll see if expert sentiment is correct.
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