Monday February 16 | Retail Development in this Economy

February 16, 2009 at 8:00 am | Posted in Coming Up | 6 Comments

We’re in the middle of the worst economy in years but this week Ikea will open its doors as the biggest retail store in Charlotte. In the midst of this ever-changing economy, we’ll find out which retailers are doing well, who’s struggling, and what small businesses and national franchises are doing to survive and get people in their stores.

Guests
Erik Spanberg – Senior Staff Writer, Charlotte Business Journal
Jen Aronoff – Retail Reporter, Charlotte Observer

  • Hear our interview with Director of Public Affairs at Ikea, click here.

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  1. If people would like to keep up with what’s going on at IKEA in Charlotte, I have a fan page on Facebook called “Queen City IKEA” and a feed on twitter called “IKEA_Devotee” — join with other IKEA-lovers!

  2. Brie Wars! Good one!

    On Prices:
    If you race to the bottom, you will get there.
    If you stay in the middle, you will get lost in the middle.
    Ultimately, it might be best to be high, but earn it, deserve it…
    and advertise the advantages.

  3. I predict a cultural catastrophe, that Sears/K-mart will not make it to 2010. They’d made a valiant but ineffectual effort before the Depression and I can’t see how an organization without reserves has any room for retreat. I visited the local Sears, and except for hardware and overstocked appliances, it was a disaster with more employees than customers. As for Belks, this is a time it might be acquired by others at a bargain price, then downsized. I also see a crisis at Lowes Building Products. Home Depot and Lowes are gonna see record credit defaults by contractor customers.

    Family Dollar makes margin by wage-gouging. If anyone has detergent and candy cheaper than they, they will sink. Electricity and rent are the other keys in the variety sector. If Dollar General weren’t so aesthetically disgusting it could compete with Levine’s FD.

    In fast food the outlet to watch is Subway. Anyone can buy bread and fixins’ and beat their price by van-gating. With their new emphasis on mixed meats, especially chicken, look for cross-contamination scandals. Notice how side products and inventory are down in your local Subway. The owner-operators were undercapitalized to begin with. If the Biggest Loser is canceled there goes their advertising. Grease addiction (What do they put in that gruel?) will keep Bojangles going, and their customers running with the “runs.” Maybe in-car toilets are becoming more popular? Notice more slicks on the streets?

    The highest prices you ever see are posted on close-outs by liquidators. 50% off a 300% mark-up is actually a 50% increase. And the merchandise is seconds and odds Ross and TJ Maxx rejected. People with any sense are beginning to avoid chaotic clearances. Where is your warranty and residual customer service? Not every product is as disposable as toilet tissue. Even Walmart has installed a second giant cardboard compactor behind each store just for the Chinese (and other foreign) slave made clothing. I admit women’s and girls’ clothing is now mostly toilet tissue. I guess they melt the synthetic fiber and extrude it again, unless the bales are burned for heat energy. The only thing green in these maquiladores are their gills.

    An interesting exercise: Do some archival work by reviewing the Reagan recession of 1981-85. The Charlotte Observer campaigned with a regional “Blue Moon Sale” and even had a limerick contest to get people shopping. The effort was admirably creative but ran out of gas in the middle. Mike may remember that time. Looking back, it is really humorous.

    I doubt spending potential is there to motivate. And if it were, would the increased consumer debt load justify it? I witness people buying groceries on 24% interest credit cards every day. We are on borrowed time as well as borrowed money. Ten percent of the US population are destined for financial security and 90% for debt peonage if we try to maintain business as usual.

  4. Some people would say you should be ashamed for letting an informational public radio show be used to promote IKEA. Did you put it together yourselves or did they just give you assembled display items? Am I one who says that? I don’t know. Maybe I’ll act brainwashed and take my $120 WFAE membership to buy a mock-Scandinavian chair instead. Will that help the political economy ?

  5. At the beginning of the show I heard something about people visiting vs. people buying. I’ll definitely be among those who will be visiting but not buying. I don’t know of anyone off the top of my head that can afford new furniture these days.

    IKEA consistently claims to have great prices but most of everything I’ve seen and heard seems to indicate that they’re fairly upscale with upscale prices. In this economy a retailer with inflated prices will soon find themselves deflated of income.

    I disagree with Mr. Martin about Lowes Home Improvement, I think they’ll weather the storm, probably not unscathed, but they’re a solid company and everytime I’ve been in there they’ve had a semi-decent number of customers. Home Depot on the other hand…

  6. So many of the products in retail stores are a huge rip-off, and people are starting to realize this.

    People in the third world are paid a dollar or less an hour to mass produce clothes or shoes or home goods and by the time they make it to the USA they are marked up 500 percent or whatever. As Jack Martin wrote above: “50% off a 300% mark-up is actually a 50% increase.” One of the advantages of mass production is the ability for those mass produced goods to become very cheap because of a huge supply – but we have seen the exact opposite take place in America and elsewhere – they continue to mark up mass produced goods despite the huge oversupply. Thus consumers are being defrauded.

    People are tired of getting ripped-off by paying 1/4 of their week’s salary for a pair of shoes or a coat which actually only cost a few dollars to produce…prices are going to have to fall dramatically across the board in the retail sector before there can be any kind of recovery in that sector.


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