Retailers Adapt to Survive

In October, the much anticipated movie, “Creation” will be released to the worldwide movie-going public. It coincides with the 200th anniversary of the birth of Charles Darwin, the pre-eminent, nineteenth century English naturalist and scientist.

Darwin’s theory is the foundation for the belief that a species’ evolution is the result of adaptations and changes made to meet new

circumstances or environment. It is in our human genetic make-up to strive to adopt the necessary changes to survive and prosper.

The last 12 months have seen some radical changes to the global economy. However, in just a few short months, there are signs that both consumers and retailers are starting to adapt to their new realities and a dramatically altered economic environment.

Consumers have radically shifted their behavior from consuming to saving. North American households have started to reduce their household debt and are increasing their savings rate. This is the first time in 56 years of record keeping that this has happened. The new mantra for consumers is VALUE!!

Retailers have also responded to this new environment by improving their value propositions – improved customer service, lowering price point ceilings, expanding or introducing private label goods, generally dropping prices and offering incentives to stimulate sales.

It would definitely appear that the changes are having an impact. Statistics Canada has reported that retail sales rose in five of the first six months of the year, including a 1 percent jump in June - five times more than analyst forecasts. Real estate developers have added 6.8 million new square feet of retail space in the same first six months which is more than all of 2008.

It has been said that constant change is a part of the retail industry. Perhaps retail is just reflecting Darwin’s theory.

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