Economic Crisis in Europe and its Effect on Retailers
The European market has experienced multiple economic crisis in the past years since 2007. Greece and Ireland were among the first European countries to experience the economic crisis as early as 2007, which was later followed by another two years of recession. Although the whole of Europe is in crisis, the most affected market players are the retailers. Some of the major problems that retailers are facing include raised interest rates, and the reduction in sales of household goods, foodstuffs, and automobiles (Featherstone 195). Due to this decline, manufacturers have had to develop new strategies by offering their consumers less expensive products in a bid to limit them from straining their budgets. The main reasons that propagated this crisis were a significant decline in the European exports, economic shocks in America, increased oil prices, and the impact of the mortgage crisis, especially in Greece. For instance, in Romania, the country recorded very low consumption rates because of the currency depreciation between 2010 and 2011. The reason for this decline was because of an overall reduction in both revenues and salaries. Actually, during the first months of 2010, Romania’s retail market shares had declined by 4.9%, except for the motorcycle and the vehicle industry (Buzila et al. 382). Unfortunately, due to this crisis, the consumers have changed their preferred shopping outlets with hypermarkets and discount stores being more preferred than other retail outlets, especially the supermarkets. As a reaction to the crisis, consumers are expected to start relying more on budding online food retailers and other sustainable markets as well as other upcoming key trends. Nevertheless, Europe is steadily recovering with Turkey taking the lead. As Buzila indicates, the Gross Domestic Product of some European countries had increased by 5.6% in 2010, while others are yet to record any significant growth rates (383).
Plans for Saks and Lord & Taylor
David Moin’s article on the agenda towards reviving the Saks and Lord & Taylor by the parent company Hudson’s Bay Company should be considered as the proper and best way of maximizing the profitability of a corporation. Some of the strategies that they intend to apply may seem minute; however, their long-term effects are indeed beneficial to any company. A closer look at the HBC’s agenda proves that change is one of the principle steps towards achieving a company’s long-term goal. Some of the changes that a firm should begin on include changes in top management; in this case, HBC has appointed a new head Metrick from the previous one McKee. Besides, new brands and improving on service provision levels should also be considered. Also, HBC should be applauded for canceling the services of unproductive vendors, especially those who are recording minimal profits while they work on refurbishing more productive locations (Moin 10). Significantly, the company showed its confidence by announcing its satisfaction on the prices they are offering by terming them as reasonable. Moreover, the underway plans to select a new chief merchant officer are very encouraging and the faster they select one the better it is for the sales department. More importantly, the idea of diversifying their target market, especially in Canada proves to be a worthwhile investment that will increase their supply chain not only locally but also in neighboring economies. For reviving the company, HBC has worked on establishing its weaknesses and found the best way of tackling them. By determining their weaknesses, HBC is getting ready to differentiate its operations from its competitors by developing efficient strategies, especially in designing concepts. Apparently, the strategies that have been used before have recorded significant profit margins, specifically in the Canadian market. Notably, even the items that had a poor reception in the market also performed excellently in the quarter of the year. Whether it is a company or a whole economy that is facing challenges, the most important thing is to work on dynamic and newer ways of improving on their strongest points while they learn to counterattack their weaknesses. Otherwise, in the financial sector, the crises are meant to be an eye-opener to the affected parties.