Making economic forecasting has not been a grateful job in the past few years. One forecasting after another has had to rewrite their predictions even on last year because many factors are changing to very different direction that analysts have originally predicted them to turn.
When economic recession hits from multiple directions the news of restructuring work and lay-offs in the end of the process become all too common. After hearing the news the concern among consumers has grown rapidly specially after this has hit their own wallets. The News always affect spending of an individual consumer and through that diminishing spending in total because even those who could afford to spend are not buying commodities like they used to.
All this has lead the retail business to regroup and to start looking for places to make cuts from. When small cuts are not enough you’ve got to take more drastic measures as a last resort, close individual stores or withdraw from a sector that is not considered as core business. We have already seen these in action.
A good thing is that retail business still employs around 300.000 even though in the past few years the business has lost around 4000 employees. Even now retailers have warned, among others, that the increase of the base VAT shouldn’t be an option to be considered nor should the government add further regulation. These actions would instantly endanger multiple jobs from the retailing sector. Among jobs it’s also about the individual entrepreneurs and the future of their stores. If the faith in future diminishes no one will want to invest in or create new business’ which has all too well known effects.
I do understand that a retailing sector, or any other major sector in that matter, can’t tell the government or the parliament what kind of decisions they should make. However, the retailing sector should be heard because trade and traders can evaluate and count what effects the decisions do have on the market.
Kehittyvä kauppa 5/2014, Arto Jaakkola, sivu 5
Kehittyvä kauppa 7/2014, Vähittäiskaupan tunnusluvut