Crazy for U
Jennifer Marks -- Furniture Today, April 27, 2009
The chief executives of Wal-Mart and Target took to the airwaves mid-month and made essentially the same prediction: The recovery will be U-shaped, not V-shaped.
Neither Wal-Mart's Mike Duke nor Target's Gregg Steinhafel foresees a quick bounce back to prosperity. Duke, speaking on "The Today Show," said although everyone is looking ahead to better days, "there is still a lot of stress" weighing on consumers' finances.
Even when the economy begins to turn, he expects the impact of the recession to linger. "This is one that is going to take a sustained change in the way that families live and their focus."
Steinhafel, in an interview with Minnesota Public Radio, spoke of "encouraging signs" such as stability in the marketplace, stability in same-store sales performance and some improvements in categories of business that have been under-performing.
Alas, that is not yet the case in discretionary areas such as home and apparel, he said. They "continue to be under the most pressure."
Whether it's CNBC host Larry Kudlow's frequent talk about mustard seeds or Federal Reserve chairman Ben Bernanke's references to green shoots, a lot of people are looking for signs of a turn, however tenuous.
So when J.C. Penney reported earlier this month that home was the best performing division during March and Kohl's said the department out-performed the store, one couldn't help hoping this marks the beginning of a trend rather an aberration as the economy slides along the U.
About that U, I'm betting it will end up looking more like a backwards J. The high point on the up side is not likely to be as high as the pinnacle from which the market has fallen — the retail market, that is.
I hope we'll start seeing some spikes of business in home products sales as the recession eases up and the job outlook brightens. (The latter feels farther away than the former, though.) Just as you have to walk before you run, I think people will be more inclined to modestly refresh their homes before they become financially confident enough to fully redecorate, let alone invest in new dwellings.
That scenario ought to favor sales of domestics and accessories in the early going — whenever it is that we hit the early going.
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