Most retailers reported dismal holiday sales, but there is one sector of the shopping world that’s pulling in extra cash, even without payday loans. Discount retailers are benefiting from cash-strapped shoppers seeking bargains.
Hand-me-down sales go up
Secondhand stores such as Buffalo Exchange are pulling in extra cash left and right. The store has 34 locations across the country from Eugene, Oregon, to Manhattan, New York. Despite the fact that Buffalo Exchange pays for its merchandise, unlike many other thrift stores, it pulls in revenue of $50 million a year. The recession also causes people to be more willing to sell their clothing, so Buffalo Exchange has plenty of good-quality merchandise rolling in.
Buffalo Exchange isn’t the only secondhand store profiting during the economic downturn. A survey from the National Association of Resale and Thrift Shops says 74 percent had increased sales in October and November compared to last year. Thrift store giants Goodwill and The Salvation Army have both seen significant gains.
Something old, not something new
Regular retail stores haven’t been so lucky. Research shows a 2.3 percent drop in retail sales this year and a 16 percent drop in store traffic. Sales went up in the days after Christmas as shoppers raced to take advantage of post-holiday bargains, but it wasn’t enough to salvage the season.
It was reported earlier that stores were showing lower sales this year. The final figures show sales even lower than expected. Even payday loans didn’t help. The extra cash stores missed out on during the holiday season will continue to haunt retailers throughout the next year.
It’s so hard to say goodbye
In the coming months retails sales will likely continue to decline. The months following Christmas are historically the worst for retails sales. Also, a pattern that emerged in 2008 will likely continue in 2009.
Some big-box stores in strip malls went bankrupt or out of business, leaving the space empty. Without the big-box retailers, the smaller stores in the strip malls saw less traffic and lower sales. As this pattern continues, Excess Space Retail Services predicts 14,000 stores will close in 2009. Chain stores will take a big hit, says the International Council of Shopping Centers, and likely 3,100 stores in that category will close in the first half of the year.
How will this affect me?
Consumers will not only have fewer stores to shop at next year, they will have fewer choices once they get inside. Experts predict there will be less brand variety as more companies go out of business.
Some large prominent chains have already gone under, including Linens n Things, Steve & Barry’s, KB Toys, Whitehall Jewelers and Shoe Pavilion. My personal prediction: Jewelry stores are going to take a hard hit as consumers continue to shy away from buying luxury items.
Even electronics sellers such as Circuit City are barely hanging on. If only payday loans could help. Unless stores figure out creative ways to pull in extra cash and avoid bankruptcy, we are going to see a whole new landscape in the retail world.
Whether it’s riding the bus, cutting coupons, or choosing a thrift store over the luxury department, people are doing almost anything they can to save some money. The economy is not only taking a toll on businesses, people everywhere are feeling the economic stress in almost every area. I just hope things get better – soon!
There is a Buffalo Exchange in California and I used to sell my clothes there all of the time. They are pretty good about giving you top dollar for your clothes and they have a lot of brand name merchandise for super low prices.