Last year, in our review of operating results from the 2017 holiday season, we noted that retailers were “walking a tightrope” when it came to maintaining gross margins in the retail business environment.
Guess what? Things didn’t improve much in 2018!
After a good November start to the 2018 holiday selling season, December sales fell flat, and retailers were left holding the bag. Year-over-year sales in December improved just 1.1% from December 2017, and overall holiday sales finished just 2.6% above 2017.
And not only did we observe significant impacts to the gross-margin line for a number of retail segments, but the lower-than-expected December sales also may have created inventory issues for retailers as they started into the new year. Store closures have already exceeded 2018 totals, and several major retailers have filed for bankruptcy.
Is this the continuation of a retail apocalypse, or could it turn out to be a thinning of the herd that will see retail emerge stronger and better able to tackle the challenges of an ever-changing landscape?