In current economic times, there is a lot of insecurity. The average person doesn’t seem to know what is happening or how long their current situation is going to last. The other side of this equation, however, is the retail industry. The retail industry has been damaged by the current economic situation, and consumer’s response to it, as well. Certain types of retail are faring better than others, but no one can argue that operating a retail small business, such as a main street hardware store or shoe store, is more difficult than ever.

Most consumers are cutting back these days. With job security a very real problem and low consumer confidence, numerous people are learning to do without. In a shoe store, this means a reduction in sales because consumers aren’t spending as much money on extra Merrell sandals. When people cut out the thoughtless spending for items such as new Merrell sandals for a special occasion or even just getting new shoes for the fun of it, then retail profits can drop considerably.

In addition to cutting back on spending, consumers are also looking for ways to spend sensibly. Thrift shops are becoming more and more popular because of the value and price. Shoe stores suffer from this trend because of their incapacity to compete with the extremely low prices of second hand shoes. The bright side of this factor though is that while trying to spend conservatively, most consumers will “splurge” some and buy things new that are of better quality and that will last. This, coupled with the increased competition during the past decade from internet-based retailers, has forced the closure of countless small businesses across the country.

When a retail store like a shoe store is affected by consumers cutting back or shopping elsewhere, they are forced to make changes they don’t want to make. Keep in mind that we are talking about retail small business, where the owner has built their business themselves. When their income diminishes due to economic fall-outs, they may have to let some of their employees go. This can be difficult because usually the owners work directly with the employees. If the business has expanded to several locations, then they may have to shut down a store. What’s more, they are losing hard workers and friends and in turn, unwillingly adding to the fear consumers have over job stability. Unfortunately this is a hard cycle that most retail small businesses find themselves in today.