Most of us would agree that it’s a trying time to be in retail right now.
On the consumer side of the equation, the rising cost of just about everything has made saving money a challenge.
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Almost all of us are seeing more of our paychecks go to everyday staples, leaving less money for diversions and discretionary spending, like vacations and luxury goods.
The evidence is in the Consumer Price Index. During February the CPI found the cost of consumer goods and services rose 0.2%. Annually, this puts our yearly inflation mark at a 2.8% increase.
Here’s how the prices of key products and services changed during February:
- Food: increase 0.2%
- Energy: increase 0.2%
- Electricity: increase 1%
- New vehicles: decrease 0.1%
- Used vehicles: increase 0.9%
- Apparel: increase 0.6%
- Shelter: increase 0.3%
- Transportation: decrease 0.8%
- Medical care services: increase 0.3%
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It’s hard to be a retailer, too
And while consumers are feeling the pinch as prices rise, plenty of retailers are also struggling with the changes.
Many of these retailers were located in indoor shopping malls.
While indoor shopping malls used to be a popular spot in which most Americans shopped or just hung out, tastes have changed.
We have more shopping options, and the plain truth is many of us would rather save money — at an outlet mall or discount retailer — or we’d rather just stay home and shop online.
This means that many legacy mall retailers, like JC Penney, Body Shop, Forever 21 and Express, have all met with challenges. All these retailers have struggled greatly in recent years, either closing stores or filing for bankruptcy protection.
Mall retailer Fossil makes a tough decision
It’s a similar case for Fossil (FOSL) , the mall retailer known primarily for watches and accessories.
Fossil has been trying a turnaround plan; as consumer tastes change, Fossil has been trying to shore up profits and stanch losses.
In Q4, sales were down in every region, and net sales decreased 19%.
So the watch brand has decided to close more stores this year. It says it plans to close about 50 stores and recently went through a round of layoffs in February.
Fossil closed a net 54 stores in 2024, leaving it 248 at year-end.
“Looking at our direct-to-consumer business, we believe there is a significant opportunity to strengthen our model, becoming smaller but much more profitable,” Chief Executive Franco Fogliato said during the earnings call in March.
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