Waiting for falling prices?

As we enter into a recessionary environment many people are being cautious with their finances.  Recently, we have seen a lot of great sale prices, stores going bankrupt and some stores downsizing the total number of stores they operate.  Many people think if they wait long enough the price will just get lower and lower and lower and lower. What is the hazard of this type of thinking and what are the things you may want to know…

Currently 26% of U.S. retail stores are in danger of filing for bankruptcy. 

Approximately 12,000 U.S. retail stores will close their doors in 2009.

6,000 – 7,000 U.S. retail stores will shut their doors by the end of 2008.

Up to 40% of retail stores profits comes from Christmas sales.  

66% of the U.S. economy relies on U.S. consumer spending.

60% of U.S. commercial mortgages are in default (this is yet to hit the U.S. economy)

As excess inventory is sold off retail stores will get leaner and meaner. The total number of retail stores will shrink due to closures and bankruptcies.  There will be less inventory on hand due to slowing sales and some stores will not be able to get enough inventory in to stock their shelves unless they have cash on hand and/or access to credit. That is probably easier said than done in this credit crunch environment. Eventually deep discounts will be become harder and harder to find as inventory levels shrink down to manageable levels and there is less competition in the marketplace in general. 

So… for the best selection and deepest discounts you may only want to wait for falling prices to a certain point.

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2 Comments (+add yours?)

  1. coconews
    Jan 06, 2009 @ 08:19:43

    Happy New Year Everyone!

    You definitely can see signs of a slowing economy and a lot of stores wasting no time in blowing out merchandise at 75% to 90% off now.

    Also you may have to special order a lot more items in the future as retail sector shrinks.

    If you reside in Canada, the U.S. exchange rate is not as high as it once was. A lot of items being ordering in more recently will be higher priced than when the Canadian dollar was close to par.

    For instance: Future shop offered a 60″ Pioneer Plasma for $4899.99 on their Boxing day sale, then it was offered for $5499.99 and as of yesterday in their store it was offered for $6499.99.

    Rumor has it that Sears and Ann Taylor in the U.S. are in trouble and may be filing for bankruptcy shortly.

    Is Sears Canada in trouble too? I noticed a new final sale no refund policy on clearance priced merchandise.

    What do you think of the economy and how the retail sector is being affected? What are you seeing out there?

  2. HN
    Jan 08, 2009 @ 05:47:45

    I noticed the government, economists, media, etc. keep telling people that the economy is going to get better in the second half of 2009. They also said the same thing in 2008. I assume in the future they will say it will get better by the second half of 2010.

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