Navigating a changing economic environment is never easy. After years in which increasing prosperity fueled the dominant retail trend of moving upscale, we’ve spent the past two years dealing with a substantial downturn.
Yet even in the depth of a recession, the right path for a retailer is not necessarily clear. It may be easy to see that consumers trade down under particular circumstances, but how best to deal with that is a separate issue.
After all, if you operate a basic operation and customers from upscale operations come to shop when bad times hit, they may be unhappy with the offering, tolerating it while they must and leaving at the first sign of a rebound.
Alternatively, if you have an upscale operation, adding a “bargain alley’ may or may not help you keep customers or help you attract customers who are trading down from restaurants. Almost surely, though, it will confuse the market and make it harder to hold that upscale mantle when the economy does rebound.
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