Retailing strategies for the 1980S

Abstract

Retailing is a trillion‐dollar business. In 1981, department store sales alone amounted to $104 billion. However, the market is as tough as it is large, for retailing is a mature business with moderate growth. Although the initial investment required to enter the market is relatively small, competition is stiff. There are over 300,000 stores selling GAF merchandise (General merchandise, Apparel, and Furniture/home furnishings) of which 49,000 outlets are general merchandise retailers. Competitive pricing is intense, and as a result, selling prices tend to rise more slowly than the rate of inflation. Since 1970 the prices of GAF merchandise have risen at a rate from half to three‐fourths the rate of increase of the Consumer Products Index (CPI). Costs, on the other hand, tend to rise in line with CPI, and most retailers borrow for the short term to finance their highly seasonal working capital needs. As a result, they are quite sensitive to fluctuations in the interest rate.

Citation

Willard, F. (1983), "Retailing strategies for the 1980S", Planning Review, Vol. 11 No. 2, pp. 28-48. https://doi.org/10.1108/eb054018