The strong and smart will survive

Bob Vereen, DIY in Europe, USA Retailers, wholesalers and their suppliers will face great challenges in America during 2008, according to most financial and business experts. It will not be an easy year for doing business. This simple observation will probably hold true for other countries as well over the months to come. Major chains have already announced a slowing of their pace of expansion, which will relieve the pressure on many companies as they face less new competition. Yet there is also strength to be gained in difficult times like these. Businesses can become leaner and stronger. This is the time for retailers to get rid of slow-moving items, and perhaps even whole categories. It is also the time to search for new products and categories that might appeal to budget-conscious consumers and businesses. Independent hardware dealers and DIY retailers who have survived to date are a pretty astute bunch. They have weathered the crisis at the start of the new century and stood their ground in the face of the rapid growth of Home Depot, Lowe's and Menards, America's three biggest DIY chains.They have also learnt to exist side by side with Wal-Mart, the world's largest retailer, which boasts some US $ 375 bn in sales. Unlike Target, Wal-Mart stocks an extensive array of basic hardware lines and competes with its formidable low pricing policies, instead of relying on just a limited product assortment. Consumers threatened by inflation will try to make do with what they have - which means repairing rather than replacing. This means that knowledgeable and helpful sales staff will be even more important. This is the strength of the independent local retailers. It will be up to them to market this knowledge aggressively and effectively to their customers. It is the timber and builders' merchants geared to the professional market who are confronting the most difficult challenge. Faced with declining prices and home building at a virtual standstill, these are the retailers who will be hardest hit in the coming year. But every retailer is by nature an optimist, otherwise he or she would not be in retailing.