Bernard's Forecast: Tapped Out Americans, Hard Pressed Retailer
The first new year’s forecast from retail analyst Kurt Barnard, president of Montclair, N.J.-based Bernard’s Retail Trend Report, finds little to cheer about in the near-term future. “Americans are tapped out,” he says flatly. “They maintain their standard of living by going ever deeper into debt.” Total consumer debt, according to Bernard, is up 10 percent in just the past year, with credit-card debt up a staggering 11 percent, to $655 billion, over the same period. That means ever-more dollars are going out of consumers’ pockets just to finance that high-interest credit-card debt, instead of buying new products from retailers. Partly as a result, Americans’ savings rates have dropped in just eight years from 8.7 percent of disposal income in 1992 to a minus 2.0 percent in the third quarter of last year. What all this means for the retailer, says Bernard, is “more than the usual pressure on margins” as competition gets ever tougher.—Louis Chunovic
