In the long run, the only way the retail industry can restore profitability is to reduce the amount of competition for the consumers' dollar. This will mean continued consolidations, divestitures, and bankruptcies of smaller regional retail players. Consumer installment debt is high . Consumer installment debt is at an all-time high despite the booming economy. A growing economy has resulted in easier credit terms for consumers but also raises the possibility of defaults.
Bankruptcies are even high despite the good U.S. economy.
Nonetheless, new bankruptcy legislation in Washington could make it more difficult for consumers to file for bankruptcy. Retailers are directly impacted since consumers usually finance big ticket items such as washing machines , televisions, and furniture with installment debt. Retailers may be able to recover some debts if consumers file for bankruptcy. Consumers are more value conscious than they've been in the past. There shopping habits have shifted from department stores to discounters and mass merchandisers.