Sunday, February 08, 2009

Fewer stores, fewer brands, fewer choices

As consumers, we will need to adjust to fewer choices during the downturn -- fewer choices of where to shop, as stores close, but also fewer choices in the stores that remain open. Suppliers cutting costs will take fewer chances with new products, and retailers cutting inventory will trim their assortments.
Toy maker Mattel, Inc., which posted a 49 percent drop in fourth-quarter profit, said its focus this year will be "cost and spending reductions." It added that it's cutting back on underperforming products. Whether that means fewer choices with Barbie or Hot Wheels isn't clear yet. [...]

The caution can already be seen in the lean assortment of spring items in stores like Banana Republic and AnnTaylor, which have empty space in areas once teeming with tables of merchandise.
Another way we will see fewer choices is likely to be retailers cutting not just assortments (carrying a dress in three colors instead of five), but also cutting suppliers and brands:
"How many different brands of men's black shoes do we need?" is one example of the questions Macy's is asking itself, Chief Executive Terry J. Lundgren told the The Associated Press this week after the chain announced it was cutting 7,000 jobs. "We have to do a better job in turning our inventory," he added.

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