Posted 3/15/2010 - 12:53:04 PM
| 
| 
| 
| 
| 
| 
| 
| 
| 
| 
What are these?
NEW YORK— Whoever decided to make February the shortest month of the year was on to something.
February couldn’t end soon enough this year judging by the plummeting Consumer Confidence Index compared to the optimism of the January index.
It would be convenient to blame the February mood reversal, as most retailers likely will, on the gloom of an extreme month of winter that even gave the temperate South a case of the deep chills.
How else would you explain the lowest Consumer Confidence Index levels in 27 years at a time when retailers all over are reporting solid year-over-year gains?
Clearer Picture
Remember, those gains compared against the lowest sales levels in years. With the deep-discounted holiday shopping glow extinguished, everybody hunkered down in February again with a clearer picture of the situation.
One thing remains unchanged: a bleak job market outlook. Not until unemployment numbers begin to trickle downward steadily will consumer belief in a recovery gain steam.
February’s consumer confidence slump shouldn’t be discarded as a blip at such a precarious point in the economic recovery cycle. It also shouldn’t douse the optimism that has embraced the housewares trade since the improved December and January numbers began to register.
Retailers and suppliers are taking the right steps to be ready when the consumer comes knocking. Predicting when that will happen presents a tricky challenge. By all accounts, though, first-quarter meetings between buyers and vendors have been enthusiastic and productive as both sides try to strike the right balance of mix revitalization and inventory scheduling.
That the industry is buzzing before the consumer is no surprise. The production gears need to be cranking almost immediately to get the retail shelves in good shape for the second half.
Just In Time
This certainly will be a year for pinpoint supply chain management, and it seems vendors again will have to bear the brunt of early warehousing without firm retail orders. If “just in time” isn’t in their distribution lexicon, good luck.
Some vendors dependent on Chinese goods are more worried about extended lead times from their factories than they are about the consumer rebounding. The last thing anyone wants is to have to turn away shoppers because the goods are still on the water.
A consumer survey by HomeWorld Business last month revealed a slightly more optimistic tenor than February’s Consumer Confidence Index.
Signs Of A Recovery
HomeWorld conducted the survey (see story page 18) to compare perceptions about the economy now, as signs of a recovery break through the clouds, versus two years earlier, when the “Perfect Storm” that pummeled the global marketplace started to churn.
More than a third of those polled this year expect the economy to improve, compared to just 12% in the 2008 survey. And just 26% of this year’s respondents expect the economy to worsen to some degree versus 68% in 2008.
This year’s HomeWorld survey corroborated the overwhelming unemployment concerns today compared to two years ago, when gas and energy costs by far were the primary worries. And it confirmed consumers expect to remain careful about how they spend their money.
So, to write off February’s Consumer Confidence Index as a case of the snowbound blues would be irresponsible. It would be just as irresponsible to let it chill all the positive momentum that has been building through the first quarter.
Even so, the Conference Board might want to consider skipping the February Consumer Confidence Index. The month’s so short, maybe nobody will notice.
