What’s Your Forecast?

Mitch Morrison, Vice President of Retailer Relations

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The emotional forecast on this recent day said partly cloudy. I chose to look at it as partly sunny, despite the facts: My all-time favorite heavyweight, Smokin’ Joe Frazier, had died; my New England Patriots fell in eerie fashion to the New York Giants; and yet another woman had come forward— this time with name and face—to accuse GOP presidential orator Herman Cain of inappropriate sexual conduct during his tenure as head of a national trade group.

Whence the sun? Entering my house that evening, I was virtually pancaked, a la Fred Flintstone by Dino. Only it was my 8-year-old, Daniel, doing the charging and yipping. In hand were two perfect scores in a subject he has struggled with and only weeks earlier had become convinced was not really an educational course but a vicious curse cast upon him from an earlier life.

This issue of CSP is about your forecast. There is a Dino barreling toward our industry—our nation’s economic abyss. As much as we say we’re recessionproof, the evidence speaks otherwise. The question is whether the economy is steamrolling over your business, and if there’s a glimmer of sun to seize.

Based on our magazine’s essential 2011 Outlook Survey report, by senior editor Samantha Oller (see p. 72), most of you are succumbing to the arduous economic strains, pinned down by what seems a permanent change in the fault lines.

Nearly 57% of you describe business conditions as flat or poor, and only one in 20 described conditions as excellent. As one retailer lamented, “Too much indecision, too much unemployment, no confidence.” Another, based in the Midwest, confided in me that his market’s double-digit unemployment has overcome his best efforts to cater to tighter pockets: “Even the two-fors aren’t selling the way they should.

“You can talk about taking control of your business and I get that,” he continued, “but there’s only so much you can control. If your market is devastated, you can’t just give away the store.”

Put another way, hope doesn’t put dollars on the counter—and most of you aren’t hopeful about a 2012 economic turnaround.

So is it all downhill? Will only the top 10% of our industry thrive, and perhaps another 30% to 40% survive? Are we looking at a monumental shakeout or the incremental consolidation that has been transpiring over the past decade, accelerated in recent years with Big Oil’s downstream selloff? Several sentiments are bearing out.

Some are calling it a day. I know of at least two respected operators who very likely could be out of “the game” by this time next year. At the same time, there are a few retailers who are enjoying record performance and are planning new store templates that incorporate mobile technology into their designs and offer a livelier customer experience. (For more, see our upcoming January cover profile on Kum & Go.) Most of you, however, are neither looking to get out nor prepared to pump millions of dollars into an uncertain investment.

What has changed, perhaps, is perspective. Not long ago, saying your business was flat was much like being the motorist driving 55 in a 55 zone and watching everyone leave you in the dust.

 Today, partial clouds have turned into partial sun, and hitting “flat” often is a well-earned achievement. Sharing the challenges in his market, industry elder statesman Bill Douglass puts it this way: “If I can have the same ‘flat’ next year, I’d be pleased.” Wishing you a year of health, happiness and prosperity. 

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