Predictions from the Desert
Economists have the luxury of being wrong—mostly because by the time we figure out what’s going on, no one remembers what they said.
At last month’s Pet Industry Leadership Conference in Tucson, Ariz., economist Brian Beaulieu gave a very interesting talk about the state of the American and world economies and how it is impacting the state of the pet industry.
Beaulieu predicts that the American economy will stay solid through 2018, and it will not run into any type of roadblock in terms of economic growth until 2019. At the same time, he said that retail sales were strong, though he pointed out that most of the growth is coming from online activities and little to no growth is coming from the likes of mass retailers, big-box pet specialty stores and independent pet retailers. For example, he boldly stated that Walmart’s best days are behind it, a point that many at company headquarters in Bentonville, Ark., would argue with.
He suggested that those traditional brick-and-mortar retailers that are most nimble and most aware of their consumers’ wants and needs will be in the best position to fight off the Amazon.com’s of this world.
Beaulieu also stressed that any significant inflation is not on the horizon for the American economy—a double-edged sword for retailers, which always count on rising prices to satisfy same-store sales growth despite their fears concerning the impact that high inflation can have on consumer psyches.
He went on to say that oil prices were headed for a rebound, probably within a year or so, as oil-producing countries fight for market share or fight—perhaps literally—amongst themselves. I got the sense that, like many economists, Beaulieu feels that higher oil prices will stabilize world stock markets and help the return to prosperity.
That has me scratching my head, since lower prices at the gas pump is putting billions of dollars more into consumer pockets. In time—and I am shocked it has not happened yet—these consumers are going to start spending those savings, and they will not be shy about putting some of those dollars into the care and treatment of their pets.
Of course, time will tell if Beaulieu is correct and, as mentioned above, not many of us will remember what he said in Tucson on a perfect winter day in the desert. What most of us will be focused on is what’s happening on Main Street at the moment and what retailers and suppliers are doing to keep consumers happy and spending, whether in good or bad times.