False Dawn?

Every step of this economic cycle feels familiar to me, though sometimes I have to be reminded. "Oh, yeah, " I think to myself. "This is how it happens....this is what it feels like...."

To be clear; I haven't suffered through a 'Great Recession' before. But I have suffered through 50% or more declines in sales because the product I carried were fads. Fads = Bubbles. In their effect, Pogs and Houses, aren't as different as you might think. Beanie babies and Commercial Real Estate; Sports cards and Credit Cards. Trust me.

I'm thinking we're in the False Dawn phase of the cycle.

I'm getting an "Oh, this isn't over," feeling.

Whenever there was a recovery in sales (not always a sure thing) it happened so slowly, so imperceptibly, that we were often well into an uptick before I noticed it or, at least, was willing to acknowledge it. Back in the 80's, we were down so long that it looked like up to us. I wasn't really willing to admit that perhaps the Reagan recession was ending until near the end of the decade.

In other words, it didn't really recover until I'd given up on it ever recovering.


NOTE: I'd already written the above, when I came across the following, from the Times Online:

December 8, 2009

False Dawn for Christmas Spending Spree Hopes.

Gráinne Gilmore, Economics Correspondent

Which says in part, "....we would have expected a much stronger growth because the comparison is with very poor results in 2008 when November was the second-worst-performing month of the year. Consumer confidence is fragile and has taken a turn for the worse.” Shoppers hoping that the muted growth in sales may prompt stores to make last-ditch reductions are set to be disappointed."

Obviously, the words False Dawn caught my attention. But I think it also eerily reflects my thinking.

O.K. The article is about England, but is sure seems to echo what I've been trying to say.

A.) I doubt the Christmas predictions.

B.) I think comparing sales to the 90 pound weakling that was last November isn't terribly revealing or edifying.

C.) And I think the consumer is expecting too much in the way of supply and price declines.

I was noticing that 43% of my sales last December happened in the seven days before Christmas; or in the 23% of the month where it is completely impossible for me to react to actual results, much less do anything about them.

So it's my job, right? To guess at what people will buy? How much of it they will buy?

Maybe so. But I can't read minds.

Over the years, this late buying surge has been a progressively later and later thing. And I'm always in fear that something unexpected will happen in those last ten days to keep people out of the stores. It's putting our our shopping eggs in a few shopping days basket.

It's a lot safer to sell what's already in the store, at full price, and be pleasantly surprised when the customers show up.


Meanwhile, according to Bloomberg, I'm running against the tide of opinion about sales and hiring.

"Companies in the U.S. More Upbeat on Sales than Jobs."

Somehow, it's reassuring to me to know I'm doing the opposite of my brethren....

I'm expecting sales to stay stagnant or even drop.

I've hired help.

Apparently, the sentiment on the part of other businesses is the exact opposite. They expect sales to go up; but they still aren't hiring. (Left unsaid; the current workers get to work all that much harder; or perhaps fairy elves come and do the work after midnight.)

But I feel after two years that I've got a pretty strong predictive record; my hiring isn't predicated on sales going up, but that they don't go down too much. I can afford it. I benefited from the nearly a year working the store alone; but it was becoming too much of a strain, and when Linda had to deal with Lois's situation without any help from me, and with the Swine Flu lurking, I decided I could afford some help.

It's nice not to have debt; and to have my budget under control; and to have working cash.

But lower sales, or slow sales days, still seem to have to power to bum me out, at least while I'm at the store.

That's probably a good thing.

Keeps me on my toes.