Skittish shoppers, fewer stores
Central Florida’s retail industry is facing bankruptcies, closings and layoffs as the economy worsens and stores have difficulty recovering from the holiday season dominated by shoppers who responded only to deals.
“The problem is consumers have been really under siege with trillions of dollars lost in wealth in the stock market, trillions of dollars lost in home equity nationwide, rising unemployment, which we’re forecasting to rise throughout 2009,” said University of Central Florida economist Sean Snaith.
“All these things have consumers tightening the belt several notches. We anticipate there will be more retail bankruptcies going through 2009.”
Snaith predicts retail-sales growth will continue to contract through the first quarter of next year and then turn positive because of a second federal stimulus package.
One difference that retailers will likely notice early next year: the impact of fewer gift cards. Many consumers steered away from gift cards this past holiday season, looking for better deals on gifts and afraid retailers would go bankrupt or shut their doors before recipients could use them.
