I'm not sure where you see the lack of demand. Demand in the sense of 1995-2000? I agree. It isn't there. Demand in the sense of 1987-1992? Very similar. That said, the "demand" is not great, but still sustainable.
The problem with good times is that managing through them is easy. When demand "falls off", expectations have risen to extreme levels and nothing is ever good enough.
I question where you are getting your facts on the deep discount stores doing well. Having spoken to a good friend of mine at Lord & Taylor (hardly deep discount), times are good. Not GREAT, but good. Campbell's soup, a simple soup maker, saw a 23% increase in sales. Primarily due to cold weather, but even so, that is substantial since they are not a generic (deep discount) soup...something I'd expect to see if demand were off.
Costco and BJ's are, indeed, doing well. But I saw the Dollar Tree having problems.
My point is simply that DEMAND isn't there. But demand is. People are buying, just not at the levels that would lead one to think huge price increases are likely. Couple that with vastly improved productivity (something people believed was non-existent 3 years ago) and better money management due to improved computing, and you've got a manageable situation....should executives truly wish to manage. |
