Merchant Prophet

Volume I 2009

by Tim Smyth

President

Smyth Retail Systems, Inc.

Buried deep on the back page of my local newspaper, I saw an encouraging Associated Press headline in today's edition:  "January retail sales rise unexpectedly."  For months, the front page has been telling us of the plummet in retail sales, but every one of these "doom and gloom" front page stories revealed some good news - many didn't support the pessimistic headlines.  Over the past few months I have gleaned some very optimistic news from these "negative" headlines:

• Last Year's retail sales still rose about 2%
• Internet and mail order sales are up
• Sales of Private Label goods are up about 8%
• Independent retailers in communities with a "buy local" intitiative have fared significantly better than those without such initiatives

The press was calling for a recession the first month we experienced a less than expected growth rate, but today's article citing the "unexpected" January growth was clouded in pessimism and warns that "we won't know for another few months" whether this is good news.  As a final expample of my distrust of our headlines, the same article bemoans that inventories fell in December.  Well, the might not be the best news for manufacturers, but it is a clear signal of a great success for retailers!  A smart retailer can actually increase profits if they appropriately plan for sales decreases and plan lower inventory levels.  I read this same news as a huge testment to increasingly sophisticated retailing and a sign that profits are improving:  sales are up on less inventory.

So while I am certainly concerned with the recent economic news, I am no Chicken Little.  More than a few of our clients have reported sales increases.  Certainly, many have seen declines, but the fact of the matter is that no matter how bad the economy is, some businesses grow - and not just those that are insulated, or even benefit, from downturns.  But it frustrates me that the attitude of the press is so negative that even good news is cast with doubt - like any time, there are great opportunities in this marketplace, as well as risks.  The worst thing we can do is to surrender to the pessimism.  We may have to work harder, and will certainly need to work smarter, but the sky will not fall if we do both.  Let's all take a more optimistic approach and focus on what we can do to be more successful.