The article offers that “retailers already are bracing for another meager holiday season” (Rugaber, 1). At the microeconomic level, less demand for credit can impact the retail industry significantly if there are wide scale changes in consumer behavior and attitude toward retail spending. Some consumers may be considering that the cost of a car would be too significant on their personal budgets and would rather keep their creditworthiness by paying down debt. Consumer attitudes might also be focused around small scale items, as cost savings, such as reducing grocery store volume per trip or changing their favorite brands.
The article offers that jobs are scarce currently which also changes the mindset of buyers, giving them more incentive to cut back on personal spending in the retail environment. The National Retail Federation believes that the retail holiday season will see a one percent drop in sales this year, due to consumers reducing their spending and their need for credit.
Speaking strictly from the microeconomics level, this makes sense how one aspect of consumer attitude can strongly impact the strength of a specific industry, such as retail. It would seem that the real question which should be asked is whether consumers would be cutting back on large purchases or small purchases and in what specific retail segment. Is it scattered throughout retail or does this concern only deal with high dollar purchases? Microeconomics has taught the importance of conducting research and gaining demographic information in order to support local business success and profitability. Consumer attitudes changing to reflect a new attitude regarding spending and credit is a microeconomic issue with potential real-life problems for certain retail marketplaces. It would be very important to conduct consumer research to find out why.
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