We all know how challenging the retail landscape is right now, from inflation to labor shortages to supply chain issues. As a floral industry professional, what can you do to keep up with these challenges and continue to stay profitable? It comes down to knowing what customers are willing to spend their money on and providing it to them.
A Year of Continued Challenges
Financial services company Moody’s Analytics laid out the main challenges for retailers in 2023 as follows:
• Inflation. While lower than its peak in 2022, inflation still poses a problem for retailers. Higher prices mean lower consumer confidence and spending, and inflation is expected to continue to decline throughout the year.
• Worker shortages. As Baby Boomers continue to retire, the labor market is predicted to be tough for years to come. Plus, layoffs are low, as businesses hold onto their workers as a reaction to the pandemic’s hiring difficulties.
• Rising interest rates. The Federal Reserve raised interest rates seven times in 2022 and once so far in 2023, with more raises on the horizon. This rising rate of interest causes consumers to cut back on spending.
• Supply chain issues. Supply chain problems have decreased over the last year, yet they remain an issue. Random shortages of materials and deliveries can lead to a backlog of orders and less availability of products.
• A shift to service spending. During the pandemic, consumers spent more on goods. Now that they can leave their homes, they’re spending more on services, such as travel, hotels, and restaurants.
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