Retailers lower prices to survive crisis bite

29 Jun '09

2 min read

Retail giants like Macy's Saks Inc., Nordstrom, TJX and J.C. Penny are suffering serious contraction in their sales, due to the twinge of global crisis. This has resulted in a number of headcount reductions across a deteriorated US retail sector.

Luxury retailers such as Nordstrom are offering lower initial prices, while Coach and Macy's is promoting its everyday value collections by lowering its prices.

Liz Dunn, analyst at Thomas Weisel Partners says, "Heavy discounting has driven consumers to stores but retailers might not be very pleased with this equation, they would prefer to get inventory in line and under control.”

She also adds by saying, “Good customer service plays second fiddle when purse strings are so tight in the first place.”Service isn't going to win sales at this point.

There is more interest in service when economic times are good, but right now value is outweighing service”.

Due to the prolonged woes of recession, reduction in the capital expenditure is also followed by the companies through cost cutting measures like store closure, layoffs, and salary caps.

But sadly, the return in revenues that would restore some much-needed cheer is not being entertained in the gloomy outlook of department store retailers.

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