What's On Retailers' Minds? Jobs, Jobs and More Jobs
How to get jobs growing again is an issue that is front and center on the minds of retailers, according to panelist speaking at the National Retail Federation'sannual convention.
Allen Questrom, former CEO of JC Penney and a member of Wal-Mart Stores' board, said the answer to the economy's troubles is: "jobs, jobs, and more jobs."
Howard Levine, chairman and CEO of Family Dollar , also stressed the need for more job creation.
"I think this economy is still very fragile...I don't think this system can sustain another shock," Levine said.
According to Moody's Economy.com Chief Economist Mark Zandi, the retail industry has been helped by job growth that sprang from the government's stimulus programs.
Zandi remains optimistic about the potential for further growth, but agrees businesses must step up and begin hiring again.
"The economy is measurably better today than it was a year ago and it will be measurably better a year from now than it is today," Zandi said.
Retailers have also been weathering the worst recession in decades, in part by keeping a careful eye on inventories.
One sign that retailers may see improved demand on the horizon is that the NRF has observed the first pick up in import cargo volume in two and half years in December. What's more, volume look to show gains for the first half of 2010, the Global Port Tracker report from NRF and Hackett Associates said.
Still, some trends remain worrisome. Questrom called out recent news from economic bellwether UPS, which cut more jobs even as it released word that its latest earnings would top analysts' estimates and said it expected to see improving economic trends.
Questrom expects retailers will need to cope with more modest expectations for growth in the future and said smart retailers will consider how they can grow in emerging markets such as China and Brazil.
This is because so much of the past growth in the US retail industry was based on "artificially inflated" credit and housing values, Questrom said.
He said he also expects that both the number of stores as well as the size of stores must be rebalanced.
"It may take five to 10 years to get back to the high points we have seen," Questrom said.
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