Magazine article Business Credit

Global Retailing 2000

Magazine article Business Credit

Global Retailing 2000

Article excerpt

"International business"..."regional economic trading bloc"..."global retailing" are all buzzwords of the '90s. Wait a minute, what is global retailing? Retailing traditionally has been "local" because it required knowledge of the needs and habits of specific groups of consumers. However, with more trade barriers dropping, retailing has been added to the list of businesses that must sell globally to stay competitive. More businesses are tapping into other country's markets and learning how to succeed overseas. A continuing slow economy in the U.S. has forced many companies to look elsewhere for profits. Management Horizons, a retail consulting division of Price Waterhouse, has produced a report entitled "Global Retailing 2000" which profiles global retailing trends. The economic forecasting team at Management Horizons noticed a trend about the U.S. retail environment: it is difficult to operate in and is growing slowly.

"We began to notice that a number of the more successful retailers were looking overseas for opportunities and we thought, 'Maybe there's a trend here,"' said Ira Kalish, Ph.D., one of the three authors of "Global Retailing 2000." Dr. Kalish is an expert in forecasting and analyzing the consumer sector of the U.S. economy, as well as the effects of financial and economic trends on the retail industry. He contributes to several Management Horizons economic publications such as the Retail Economist, the Five Year Forecast, and the Retail Previews. After receiving his doctorate in economics from the Johns Hopkins University, he was an economist with the Eastman Kodak Company consulting on trends in consumer spending, business capital spending, and financial markets.

The Global Retailing 2000 report contends that markets will be divided into three regional blocs: The Americas, Europe, and the Far East, with little integration between the three. All are economically diverse, so business professionals must have prior knowledge about each in order to succeed.

"Globalization is the way to go for retailers who want to keep growing," said Dr. Kalish.

Follow the Yellow Brick Road to Consumer-Oriented Countries

The '80s was the decade of excess: the Trump Towers, huge government spending, and "Dynasty" lifestyles. The '90s started out "lean and mean" and some economists predict they will stay that way: rightsizing, total quality management, and reengineering are "Roseanne" realities.

According to the report, as a result of rising taxes, a declining dollar, and tighter controls of lending institutions, the retail industry in the United States faced a period of long-term slow growth. Baby Boomers who are now approaching middle-age and slowing their spending habits are another reason for suppressed consumer spending. The trade balance also influences consumer spending.

Countries other than the consumer-oriented U.S. are experiencing rapid economic growth causing a dramatic increase in their living standards, thus encouraging them to become consumer-oriented societies. Retail is moving toward specialization of stores as occurred in the U.S. during the 1980s with such stores as Home Depot, The Limited, and Toys "R" Us. In the other economic blocs, the shift toward specialty stores means electronic superstores are replacing manufacturing stores and national chains are replacing independents. Foot Locker is one speciality retailer that has gone global and been successful in North America, Europe, Asia, and Latin America. Small businesses will find it hard to keep up with the retail giants.

"Small businesses have difficulty achieving the efficiencies that come from scale and technology that larger retailers have. We have already seen the disappearance of large numbers of mom-and-pop stores in this country. As American firms go global and firms elsewhere do the same, retailing becomes more consolidated and in other countries, small businesses will disappear as well," Dr. …

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