Retail Economics 101: Lessons and Strategies of a Recession

Despite the fact that the economy has yet to hit the official benchmark of a recession, historically defined as two consecutive quarters of declining GDP, the majority of Americans feel the economy is in a recession. At the very least, we know there are sectors of the economy that are exhibiting strong recessionary indicators and the retail industry is at the forefront of those trends. With the rash of recent retail bankruptcies, store closings, and increasingly vacant retail space it is apparent the retail industry is facing tough times. Because retail is the second largest sector in the U.S. in number of businesses and employees and accounts for 8.3% of GDP, the implications of a retail recession are numerous and far reaching. Consumer spending also accounts for two-thirds of the national economy, giving us an indication of the relative strength of our economic times. As we have seen national retailers folding it is natural to wonder what the impacts will be of a slowing economy on Iowa owned retail establishments and our overall retail landscape. This report presents data and analysis for decision makers, retail business owners, and concerned residents to determine the local impacts of tough economic times and offer solutions and means of adapting.