Blog: Leonie BarrieUpturns after a downturn

Leonie Barrie | 11 September 2008

Downturns are tough on retailers, as any glance at the monthly sales round-ups published on just-style recently show. But what happens when the general economy starts to improve?

Historical evidence suggests that retailers are often slow to bounce back, with shoes and accessories and specialty apparel among the hardest hit, according to the latest quarterly bulletin from McKinsey research.

Its paper ‘How retailers can make the best of a slowdown,’ argues that firms need to move quickly to minimise deterioration in their performance.

But how do you choose from the wide variety of potential, short-term priorities? Should you cut costs by shutting stores or restructuring support functions, or focus on increasing revenue by refreshing stores or overhauling promotions?

The answer apparently lies in a tough self-assessment, combined with a hard-nosed scan of a retailer’s external environment. And for retailers operating with decent financial strength in reasonably attractive markets, investing for future growth, rather than hunkering down to minimise losses, often yields the best long-term results.

You’ll have to sign up to take a look at the analysis, but it only takes a few seconds and could well be worth it.

How retailers can make the best of a slowdown


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