Emerging Economy Impact on Retail

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		RETAILERS MUST PREPARE NOW FOR CONSUMER SPENDING DOWNTURN

		With the surging economic tide on the cusp of ebbing it is imperative that retailers being the first impacted by reduced consumer spending, launch strategies with aggressive game plans before they are pulled under by the powerful outbound rip tide . . . For retailers, and their supporting distribution channels; That time is NOW! especially with the impact of hurricanes, soaring fuel prices, inflation, etc. setting the fragile economy on the brink of accelerated fracture . . . Why now?

	.......	First, short term, the next 18 months: Surging oil prices, inflation, and two hurricanes producing reduced jobs and consumers spending are showing signs of fracturing the already fragile economy. With the traditional short term safety-nets of personal savings and available consumer credit, traditionally used to span chasms of consumer spending, stretched to the breaking point by the weight of committed savings and accumulated consumer credit open the path to unprotected fall of consumer spending. Second, mid term, the next two years: The accumulated paper wealth stored in consumer's inflated investment and real estate Potential Economic Energy Portfolios from which consumers extract dollars in the form of *Kinetic Economic Energy Dollars, supporting the momentum of their spending spree, are on the verge of losing their buoyancy. The outlook of declining corporate profits projects a decline in stock prices as we cannot visualize P/E ratios rising above their already exuberant, "Frothy" as Mr. Greenspan would say, levels. Levels that could plunge the Dow, via combination of lower earnings and realistic P/E ratios, into the 5,000-6,000 range. On the real estate side, signs of slowly rising interest rates send out an ongoing collection of ripples, when combined form a wave with the potential of washing out the road to ongoing growth. Increased rates are destined to slow consumers extracting sums of Potential Economic Energy Dollars* from their real-estate portfolios via refinancing, churning investment properties. Third, long term, the next five years: At some point, and it has to be within the next five years, the out-of-control bulging national debt and in-balance of U.S. trade have to be reckoned with . . . A reckoning that via increased taxes, reduction of promised/counted on entitlements and other yet to be construed measures will have a major, long lasting impact of first reducing Potential Economic Energy Portfolios then Kinetic Economic Energy Dollars, followed by depressed consumer spending, resulting in big-time reduction of retail and distribution channel sales, margins and profits. ...
Collision Course		Bleak and Frightening? . . . Absolutely! With all three of the above items in the cue retailers planning to grow and in many cases to survive should be focusing, should have in place or planning to launch a culture change to their overall process and strategy . . . The exuberant American Life style is on a "COLLISION COURSE" with the Fragile American economy