Questrom: Retail Recovery Will Be Slow
NEW YORK-The nation's retail economy will emerge from the recession, but it will be a slow process, according to Allen Questrom, former chairman and chief executive officer of Federated Department Stores and J.C. Penney.
Speaking at yesterday's Issues & Solutions Conference hosted by Emanuel Weintraub Associates, Questrom, now a senior adviser of Lee Equity Partners, said restricted consumer spending habits will keep sales growth in the low single digits for perhaps as long as the next 15 years. Among the factors reducing consumers' ability to spend, Questrom said, are reduced values for housing and stocks, limited availability of credit, increased savings, the "enormous pressure" on consumers to pay their bills and likely tax increases to pay for the federal government's stimulus package, health-care reform and the cap-and-trade law to reduce greenhouse emissions. "You'll feel good about 2 percent sales increases," Questrom said.
In addition, Questrom, a member of Walmart's board of directors, predicted that the retailer will eventually be a $1 trillion company, using its international expansion as a means to further boost its sales growth. He also recommended that retailers adopt a focus on both consumers and products as a strategy for reviving their business. "This business is about getting out to stores, going through the floors, talking to people, talking to sales associates, talking to manufacturers," he said.