Economic Armageddon?

10/8/2012
Smart people in retail have been telling me all year we are in economic Armageddon. Who wouldn’t admit that financial indicators both global and domestic aren’t good? The only problem is they also aren’t bad.
This raises an interesting question: Can you build a successful business strategy on top of a doom-and-gloom outlook? Will your company stifle innovation, investment, competitive fire, potential growth and success if your executives believe the economy is in free fall?
The question is relevant because a report came out from the Goldman Sachs Annual Global Retailing Conference in early September that noted the retail industry is experiencing a stable macro-economic outlook with improved margins and a realistic earnings expectation. And that’s not all.

The conference also highlighted a Reuters report that showed nearly all U.S. retailers posted better-than-expected sales gains in August, which financial analysts predicted will set the stage for a strong third quarter and a positive holiday selling season.

The conference report was based on presentations made by Walmart, Target, Home Depot, Ahold, Ascena, Saks and Goldman Sachs’ analysts. Key discussion topics focused on the previous eight-month period (January to September). A major conclusion drawn from this financial data was that the period generated strong top-line sales for most retailers. Additionally, all signs lead to positive end-of-year results for 2012.

So, is the economy running off a cliff? Is the future in peril? Are the cards stacked against business? Not really.

No doubt, things could change in an instant, as they did in September 2008 when Lehman Brothers imploded. But in my view, retailers can’t wait to succeed. Evidence shows that opportunities for success exist for retailers, and those with the will and vision to seize them are posting strong gains.
“We have sort of become a nation of whiners,” said former Senator Phil Gramm in the last Presidential election cycle. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline.”  Gramm took a lot of flak for making this statement, but I think everyone knows there is a kernel of truth in it.

Here’s another memorable quote. It is from the legendary former manager of the Baltimore Orioles, Earl Weaver, who said, “I became an optimist when I discovered that I wasn’t going to win any more games by being anything else.”
If you think you can win, you can win. There is no other way.

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