What are the Economic Factors that Affect Retail and Sales

Bobby Coles's image for:
"What are the Economic Factors that Affect Retail and Sales"
Image by: 

The stronger the economy, the more money being filtered back within a given community. There are many economic factors that affect retail sales, and these need to be scrutinized with a calculated eye.

Retail sales are affected by numerous factors, so it is wise to invest some interest in each manner, so as to glean a more appreciative understanding.

In times of economic prosperity, retail sales skyrocket, but in times of recession, money is distributed in a more cautious manner, negatively affecting retail sales. When debts swell, retail sales suffer. If no end is in sight, if there is no light at the end of the tunnel, then retail takes an impromptu hit.

There are many economic factors that affect retail sales, and they serve as a revolving door of trouble. Retail sales are also affected in a positive manner, even though the word affected tends to conjure up negative connotations. The state of the economy is consistently in a pendulum of influx, with time and other factors weighing heavily upon its growth and decline.

One of the biggest economic factors that affects retail sales is employment opportunities, which directly leads to the added discretionary income of people that find it hard to resist impulse buying, and who have no problem accruing massive credit card debt in order to maintain a certain lifestyle.

The interest rates of the local banks and financial institutions also figures in mightily. When interest rates rise, people tend to become a shade more cautious, but when times are good, people spend freely, which greatly affects retail sales.

The economy is in a constant state of growth and turmoil, where it seems as though one minute things are fine, and the next minute doom lurks around the corner. There are many mitigating factors that affect retail sales in one manner or another. Some of the major influences on retail sales include employment rates, population growth, technology, marketing strategies and tourism.

Many economic factors affect retail sales, and they can do so at any point in time. The nature of business is that many are unsuccessful, sometimes through no fault of their own. The economy creates certain situations that are not easily remedied, and therefore retail sales may plummet.

If a major retail chain locates in your area, the economy will boom with new jobs, and retail sales will swell. These swells can be short-term or long-term, depending on the financial proclivities of a certain community.

The economy fluctuates so frequently that it is hard for businesses to determine their retail sales projections for coming fiscal years. As the economy goes up and down, retail sales are affected in a similar fashion. The big retail chains tend to monopolize the market, and this has a lasting impression upon smaller stores.

The larger retail chains offer products at reduced rates, which is an economic factor that greatly contributes to impacting upon retail sales from other outlets.

Technology is beginning to be a major player in the retail sales industry. The current trend of shopping online has driven the local retail stores into a crisis. Online shopping is a more viable option for many companies because they can eliminate some middle men, rid themselves of marketing campaigns, and deliver a product in a manner that many people appreciate due to their hectic lives.

Most retail outlets offer added discount coupons and promotional codes on their products, driving sales through the roof.

The trends are shifting, and technology is starting to wreak havoc on the retail sector. As this shift continues to gain momentum, many retail stores will be adversely affected, ostensibly shutting many doors. This will drive the unemployment rate up, which will, in turn, affect the retail sales sector. Everything in business tends to be cyclical, and the impact felt in certain areas, such as retail, will be detrimental.

Advertising and marketing campaigns are economic factors that play a crucial role in the way that they affect retail sales. During times of economic hardship or strife, many businesses do not have the extra income to dole out in terms of marketing, which can lead to an influx of business going elsewhere. This will negatively impact smaller businesses that are simply trying to remain afloat.

Population growth needs to be considered when determining factors that affect retail sales. If the growth of the population continues to rise, it will depend on which demographics are largest. For example, many of the baby boomers are not in a financial situation to be freely spending at the retail outlets. Many baby boomers are older, and are entering the retirement portion of their lives.

The number of dependent people, which is those under the age of 14 and over the age of 65 is currently very high. The people in the middle years have to take care of these people, which leaves them with less discretionary income for themselves. This creates another demographic shift in purchasing power. All of this boils down to a negative affect on retail sales.

Depending on the community, an economic boost could occur if the community hosts major events that draw tourists into the area. The Olympics, World Series, concerts, or a festival of some sort can bring many additional dollars into the area, and that money will all filter its way down to the retail sector.

The money generated by these sorts of events tends to sustain many businesses during some lean months of the year. The retail sales industry thrives on tourist dollars, and when times are tough, the money is just not present as it sometimes is during economic booms.

There are many economic factors that affect retail sales. In society, economy travels down many paths, each of which becomes related in some sense. The more money that flows out of the pockets of the members of a community, the more businesses that it reaches. These sales then lead to other influxes in the economy of the community, and the cycle continues.

When times are tough, and money needs to be stretched out, many retail stores will suffer as people will spend their money at discount chains, sacrificing quality for quantity. These stores will be affected adversely, and if they go under, then retail sales at other locations will flourish. There is a lot of money to go around, but sometimes it travels in limited circles.

In the tumultuous world of sales, economic factors play a vital role in the livelihood of retail employees. Retail sales is a tough enough racket to survive in, but when there are economic factors at play, the situation becomes critical. The economy plays such a key role in the retail sales sector that it is hard to keep afloat. The economy can either boost your sales or send you plummeting towards bankruptcy.

When the economy is thriving, there is lots of money to go around. People begin to spend frivolously, and much to the benefit of sales people, most notably those raking in commission. The economy has to be going well, though, for sales to peak. When there seems to be an economic lull, like a recession, the moment that forecasts predict the end, people flock to the stores to make up for lost time. This is a time when retail sales fluctuate wildly.

Today's society is filled with dual income households, and, as such, there is the perception that money is endless. This is great for those in retail sales. The average person is starting to rack up some serious credit card debt, something that was relatively unheard of a few scant decades ago.

As a result, the retail stores lap up the customers, and pad their own pocketbooks. However, these trends often come in fits and spurts, and it is hard to manage when you do not know whether your next paycheck will be adequate or insufficient. This is the enigma that is the retail sales job.

When the economy is struggling, there are no new housing developments being erected, which does not bring in new money to be spent in the retail sales sector. Many people also exit certain regions due to poor economic growth, limited employment opportunities, or poor housing options. As these factors all inter-mingle with one another, each plays its own key role in impacting retail sales.

If the unemployment rates begin to rise, people suddenly put on the brakes with regards to their spending, an economic factor that drastically affects retail sales. When the average person hears about a downturn on the stock market, they reluctantly close up their wallets tighter than a snare drum. Most people panic when mention of the economy arises. This is based out of ignorance.

Sometimes, when the market is down, some retailers and other businesses will attempt to lure the consumer out of hiding with large sales, and gimmicks. The auto industry is infamous for this tactic, when they come out with their employee pricing events, or zero percent auto financing. This is a time when economic factors affect retail sales, but in a paradoxical manner.

The sight of the dollar rising and falling against its counterparts also sends the retail sales jobs spiralling into a descent. If the dollar closes at a certain level, all is fine and dandy with the general population, but if there is a spike or a sharp decline, there is also a great affect on retail sales. If the evening news or the local newspaper report a pending spike in the economy, people will begin to dole out their savings readily once again.

Capitalism keeps the retail sales jobs in relatively high demand. People want to feel prosperous, and they equate goods and services accumulation as being successful. After people receive their refunds from the government during tax season, they invariably go out and splurge as opposed to saving. Society today is not living for tomorrow, or saving for a rainy day. And big business is well aware of this trend.

The clever marketing ploys of the business world thrive on the average person. The retail stores spend large quantities of money figuring out exactly how to take the money straight out of the general public's pocket. The better that they are at figuring this out quickly, the more affect it will have on the retail sales portion of a given social climate.

Retail is affecting regularly, either positively or negatively, but in the end, most retail businesses make out pretty well. The rich get richer, and the poor get poorer. This is the way of our society.

More about this author: Bobby Coles

From Around the Web