PERSPECTIVES

"Never miss the opportunities of a crisis."

Without a doubt, these continue to be unprecedented times for managing a retail business. The Disruption with a capital D continues, from the pandemic to supply chain challenges, employee issues, worldwide inflation, interest rate increases, etc. And now, the global economy is in more turmoil due to the Ukraine invasion and the resulting sanctions against Russia. 

Lots of challenges for business owners as they wrestle with rising costs, aren't there? 

But for independent retailers, there exists one glorious opportunity: price elasticity. Yes, raising prices. A whole new ball game for many independent retailers. 

Have you noticed? That persisting Plague of Uncertainty that keeps hanging around?

• The troubling issues in Ukraine and the potential repercussions.
• Inflation now includes an even greater hike in oil and gasoline prices because of the Ukraine situation.
• Unresolved supply chain issues, particularly impacting smaller businesses with less clout.
• Employee unrest, union organizing, the "Great Resignation." 
• Stock market declines, which seem to foster even more talk of unrest and uncertainty.
• Not to mention the extended Farewell Tour of Covid and The Variants. 

And amidst all this relentless uncertainty, you still have a business to run, employees to motivate, customers to satisfy, vendors to deal with, creditors to pay, etc, etc.  

Here are some ideas on how to approach that.

By now, you have your year-end financials for 2021. Remember, it always comes with a Balance Sheet!

Whether sales are up, down, or sideways, the financial strength – and staying power – of every business is shown on its Balance Sheet. And revealed by its Balance Sheet ratios.
 

Just one week until Valentine's Day! Are you feeling the love yet?

• Tumult, rancor and uncertainty abound in the day's news.
• Big storms are pounding large areas.
• The pandemic is lingering.

What better time to send a love note to your customers? 

That's right. A Valentine. Just a Valentine. No strings attached! Show your love!

You've gotten through the Holiday season, likely enjoyed some vacation time, and perhaps even have your own financial statements in hand. 

For many retailers, 2021 proved to be a very profitable year. Congratulations!

In fact, go here to check out the pre-tax profit trends for the past two years for the median performers in 50+ retail segments. To borrow a phrase,  everybody (almost) is above average!

Heads up. You can take a grim situation and turn it into an advantage. 

Universally, there is a shortage of "good employees." While many will use that as an excuse, it can be a great opportunity for those who seize it.

That's why we paid particular attention to this commentary by Ty West in The Playbook*.

• "Businesses across a range of industries are struggling with both recruitment and retention, yet surveys and experts continue to show many are unwilling to change their strategies to improve their ability to compete."

And therein lies the opportunity.

You've no doubt seen the headlines. "Retail sales slumped in December." 

Sounds pretty grim, doesn't it? Did all those foreboding warnings of supply chain issues, inventory shortages, etcetera actually come true?

• Keep in mind that the folks trumpeting those slumping sales results are comparing each month's retail sales to the previous month. Sure enough, on that basis it is true that retail sales in December were almost 2% less than they were in November.
   
• However, if you examine the same numbers the way that retailers do– that is, comparing to the same month the prior year – we see a very different story.

See the forest, not just the trees

Now that we've put a wrap on 2021, and before we really dive into 2022, it's time to catch your breath and reflect on where we are after 2021. 

Perhaps like us you believe that fundamental and enduring changes have occurred; no one can operate on "auto-pilot" anymore. All of us have to learn new processes, and form new habits. What's it called? Oh yes; "embracing change." Lots of it. 

That's why it is a very opportune time, particularly for owners, to have a very active Q&A session with themselves.