“The top line will not grow at the same pace due to the lower price points the consumers are buying at and the deep discounts that are being taken on items”, explains Janet Hoffman, Global Managing Director of Accenture's Retail Practice. “From a retailer’s operating perspective, it is really about how many items are moving through the cash register – or, said a different way, the tonnage the retailer is moving.”

Low-price retailers such as Wal-Mart have acquired new customers during the recession and hope they will not return to old haunts when the economy recovers. In fact, keeping consumers after the recession applies to every segment, not just discount retailers. “Consumers switched brands and they switched retailers, and to a large extent they also switched formats”, says Hoffman. One of these format changes is a shift from shopping in brick-and-mortar stores to shopping via the Internet. “Retail sales year to date [through June] have been lagging – depending on which geography you look at – anywhere from -2% to -4.5%. Online sales have been growing, so that is where consumers made a choice to switch channels and possibly switch brands as well.” These data demonstrate that consumers are switching in ways other than from conventional department stores to discount stores, but there is plenty of that going on as well.

Continued in Management Consultant International © 2009 BNA Subsidiaries, LLC

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